Abstract
Today, citronella essential oil business in Indonesia is fronting two major problems: a diverse range of product quality and fluctuated price. Meanwhile, the global market demand keeps increasing until 3–5% per year. This fact indicated that the citronella essential oil business was having a high chance of participating in the global market. This study aimed to analyze the citronella essential oil business feasibility as a “people-oriented-economy” activity and determine variables that affected the feasibility in implementing this business. Citronella essential oil is produced by a steam distillation process with a production capacity of 2,400 kg/year. The number of citronella essential oil international product sales was reaching 76% with the selling price of IDR 360,000/kg and reaching 24% on the local market with the selling price of IDR 180,000/kg, therefore the total of sales in 300 days/year was IDR 7,360,320,000. Based on this calculation the total of profit obtained in a year was IDR 99,463,383. An effort through managing the material and selling price sensitivity already done to maintain the BEP and B/C values. The increasing price was anticipated by managing the product selling price fraction, while the decreasing of the selling price anticipated by managing the market fraction.
Highlights
The citronella essential oil was widely known as Java Citronella oil
This study aimed to analyze the citronella essential oil business feasibility as a “people-oriented-economy” activity and determine variables that affected the feasibility in implementing this business
In 2018 the citronella essential oil price increased significantly, it reached IDR 215,000– 225,000/kg and the price of its raw material was reaching IDR 1,000/kg. These facts indicated that citronella essential oil business was highly potential to be developed in a wider range
Summary
The citronella essential oil was widely known as Java Citronella oil. Its price fluctuated in each year. The export volume was increasing slowly and reached the highest export volume in 2007 with a total of 2,663 tons with a total price of US$69.5 million. The export volume decrease significantly until it reached 992 tons with a total price of US$37,4 million (General Directory of Estate, 2013). The global market demand for the citronella essential oil was increasing 3– 5%/year. In 2018 the citronella essential oil price increased significantly, it reached IDR 215,000– 225,000/kg and the price of its raw material was reaching IDR 1,000/kg. These facts indicated that citronella essential oil business was highly potential to be developed in a wider range
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