Economic Feasibility of Investing a Turmeric Product Processing Plant in Surat Thani Province
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Abstract
The construction of a turmeric product processing factory will help elevate turmeric production to increase its value and meet international standards accepted by both domestic and international consumers. It can also help improve farmers' income and quality of life. This paper presents an economic feasibility study of establishing a turmeric processing plant in Surat Thani Province. The objective was to estimate costs and returns and study the economic feasibility of constructing a turmeric processing plant through participant observation and in-depth interviews with five turmeric product processors in the area using semi-structured interviews. The results were analyzed using economic project analysis. This project requires an investment of approximately 7.3 million baht with a project life of 20 years. The analysis found that the net present value (NPV) was 25,284,434.16 baht, the internal rate of return (IRR) was 40%, the benefit-cost ratio (BCR) was 1.76, and the payback period (PB) was 3.95 years. Therefore, it can be concluded that this project is feasible for investment. The sensitivity analysis showed that when considering changes in only one factor, the net present value remains positive even if the price of turmeric increases by 100%, production costs (excluding raw materials) increase by 30%, or revenue decreases by 30%. When both factors change simultaneously, the net present value remains positive in the case where revenue decreases by 30% and the price of turmeric increases by 100%. However, the net present value becomes negative only when revenue decreases by 30% and production costs (excluding raw materials) increase by 30%. These results provide important information for the government to consider supporting the establishment of farmer-owned turmeric processing factories to help sustainably improve farmers' living standards
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