Feasibility study on the financial aspect of green ship recycling yard business model

Sunaryo, Ananda Rizkytama Hanura, Fariz Hussein

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

According to the Hong Kong Convention, the ship's life cycle is limited to 25 years old due to its deteriorating of its effectiveness and uneconomical to be operated, so it needs to be recycled. This opens up the market for a ship recycling industry in Indonesia. Two business models can be implemented to a green ship recycling industry, one is as a service provider model and the other is a "3-in-1"model. Before opening up a new green ship recycling business, a feasibility study needs to be conducted to assess which model of green ship recycling business will be more profitable. Several aspects need to be considered in a feasibility study. This paper will be focusing on the financial aspect of the feasibility study. The results of this feasibility study for the service provider model are Payback Period of 3.74 years, Average Rate of Return of 0.36, Net Present Value of IDR228.322.021.477,00 Profitability Index of 3.82, and Internal Rate of Return of 17%. For the 3-in-1 model with a Payback Period of 11.7 years, yields Average of Return of 0.28, Net Present Value of IDR124.876.569.841,00 Profitability Index of 2.25, and Internal Rate of Return 12%. From those results, it can be concluded that the service provider model is more profitable.

Original languageEnglish
Title of host publicationRecent Progress on
Subtitle of host publicationMechanical, Infrastructure and Industrial Engineering - Proceedings of the International Symposium on Advances in Mechanical Engineering, ISAME 2019: Quality in Research 2019
Editors Nahry, Dwinanti Rika Marthanty
PublisherAmerican Institute of Physics Inc.
ISBN (Electronic)9780735419865
DOIs
Publication statusPublished - 6 May 2020
Event16th International Conference on Quality in Research, QiR 2019 - 2019 International Symposium on Advances in Mechanical Engineering, ISAME 2019 - Padang, Indonesia
Duration: 22 Jul 201924 Jul 2019

Publication series

NameAIP Conference Proceedings
Volume2227
ISSN (Print)0094-243X
ISSN (Electronic)1551-7616

Conference

Conference16th International Conference on Quality in Research, QiR 2019 - 2019 International Symposium on Advances in Mechanical Engineering, ISAME 2019
CountryIndonesia
CityPadang
Period22/07/1924/07/19

Keywords

  • 3-in-1
  • Financial aspects
  • Service provider
  • Ship recycling

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