lautnusantara.com The economic feasibility of processing pelagic fish meat (such as tuna, skipjack tuna, or mackerel) into export products is generally very high, but it is highly dependent on operational efficiency, quality management, and global market access.

1. Economic Feasibility Analysis of a Pelagic Fish Export Business
Main Cost Structure (Investment & Operational)
Economic feasibility will be highly sensitive to the following cost management:

A. Initial Investment Costs (Capital Expenditure / CAPEX)
This is the largest initial cost, but is essential for export quality.

• Factory and Facilities: Construction of a factory that meets HACCP and GMP (Good Manufacturing Practices) standards.
• Colding Equipment: Investment in freezers (especially plate freezers or blast freezers for frozen products) and cold storage.
• Processing Equipment: Filling and slicing machines, vacuum packaging machines, and retorting equipment (if canned products).
• Certification: Costs to obtain international quality certification (HACCP, BRC, FSSC 22000) and traceability.

B. Operating Expenditure (OPEX)
Daily costs are the most important determinants of margin efficiency.

• Raw Materials: The cost of purchasing fresh pelagic fish. This is the largest cost component (generally 60-70% of total costs).
• Labor: Wages for skilled labor for the intensive filleting and loining processes.
• Energy: Electricity costs to run the refrigeration and processing machinery (very significant).
• Export Logistics: Freight and insurance costs (frozen shipments are very expensive).

2. Financial Feasibility Analysis (Key Metrics)
To be considered economically viable, a project must meet the following criteria:

• Net Present Value (NPV): The NPV must be positive. This means the present value of future cash inflows is greater than the initial investment.
• Internal Rate of Return (IRR): The IRR must be greater than the cost of capital used. The export food processing industry often targets an IRR above 15-20%.
• Payback Period (PP): The time required to recoup the initial investment should be short (ideally 3–5 years) considering market risks.

3. Key Risks Affecting Feasibility
Economic feasibility is highly vulnerable to external risks:

• Exchange Rate Fluctuations: Since revenues are denominated in US Dollars/Euros, Rupiah depreciation is actually beneficial (gain). However, exchange rate volatility can impact long-term planning.
• Fish Availability and Prices: A lean season or poor fishing practices can reduce supply and significantly increase raw material prices, squeezing profit margins.
• Export Regulations and Tariffs: Sudden changes in import regulations in destination countries (e.g., increased antibiotic residue standards or new tariffs) can halt exports.
• Food Quality and Safety Issues: Cold chain failures or contamination can lead to rejected shipments, resulting in significant financial losses and long-term reputational damage.

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