The financial feasibility of hazelnut husk and sewage sludge based vermicompost production

Abstract

Recycling the waste such as hazelnut husk, sewage sludge etc. has been one of the issues into the agenda of many countries. Therefore the purpose of the study was to examine the economic feasibility of the vermicompost production. Technical data about composting hazelnut husk and sewage sludge were gathered from past research. The time series data such as production, export, import and price of vermicompost collected from TURKSTAT, FAO and related institutions. Autoregressive integrating moving average model (ARIMA) and smoothing methods such as double exponential model and winter model were used in forecasting process. We followed net present value and internal rate of return procedures when evaluating the financial feasibility of the facility having one ton vermicompost production capacity per day. Research results showed that the profitability of vermicompost production facility was high, while the likelihood of loss was less. Vermicompost production facility with approximately 130 thousands of US dollars initial investment provided net present value of 1.28 million of US dollars during the economic life. The internal rate of vermicompost production facility was 23%. Research results also revealed that production cost of vermicompost was $0.2 per kilogram. Since vermicompost production facility investment with high profitability and low level of risk was good investment alternatives facing with low level of competitive in market, the study suggest to investors who has good back grounding about sector that they should pay attention to marketing system and market observation about organic input market.