A Feasibility Study of Investment on Concentrated Latex Facturing in Amphoe Mueang Bueng Kan Changwat Bueng Kan

Abstract

This study aimed to (1) explore general  marketing environment of concentrated latex  Changwat Bueng Kan (2) study technical aspects of concentrated latex factory (3) perform  financial feasibility and (4) test the ability to sustain change of  investment on concentrated latex factory in Amphoe Mueang Bueng Karn Changwat Bueng Karn. The study used primary data obtained from participated observation and  in-depth interviews and secondary data obtained from books, research papers, and academic papers of various sources including the internet. Financial tools were weighted average cost of capital (WACC), net present value (NPV), profitability index (PI), internal rate of return (IRR), modified IRR (MIRR), and switching value test (SVT).

                The study result revealed that in 2014 Thailand had 111 concentrated  latex  factory with  the  total capacity of  700,000 tons per year  the eastern region  produced  only 104,060 tons per year  while there was  downstream industries which required  200,000  tons  of concentrated  latex  as  raw material.The region relied on northeastern region of  72,250 toms per year which was not enough. Thus there was opportunity for Changwat Bueng Kan which  had no concentrated  latex factory  while there were over 131,210 tons of field  latex  in 2014. The factory  aimed  to produce 15,000 tons per year. The factory required area  of  10 rais.  Production  technology  of  factory  based on  the Band Mill saw  with centrifuging  Chemical Treatment  and  Vacuum  Pressure  Impregnation  Process  and  the final process  is drying  in  the  stove  in order to get rid of  humidity. The financial  result  with non-BOI  case  under  project  life  of  10 years  and WACC  as  discounted  rate of  11.56, the  project  was  worth  the  investment   since  NPV  was  7,194,646 baht, PI was 1.07, IRR was 12.93 percent  and  MIRR was 12.29 percent. The SVT showed  that the benefit could  be down 2.39  percent , the operating cost could  be up 7.27 percent, the investment cost could  be up 3.69  percent and the total cost could be up 2.45  percent hence the project risk was quite low. In BOI case with  the  same  project  life, WACC  as  discounted  rate  of  11.31, NPV  was  21,355,344 baht, PI was 1.22, IRR  was  15.30 percent. And  MIRR was 13.34 percent. The SVT showed that the benefit could be down 7.00  percent , the operating cost could be up 21.58 percent,  the  investment  cost  could  be  up 11.55 percent and the total cost could be up 7.52 percent  hence  the  project risk  was less than  non-BOI case significantly.