Feasibility Study of Establishing A Three-Hectare Aromatic Green Dwarf (AROD) Coconut Plantation in Barangay Buboy, Pagsanjan, Laguna

Date

4-2010

Degree

Bachelor of Science in Agribusiness Management

College

College of Economics and Management (CEM)

Adviser/Committee Chair

Jimmy B. Williams

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Abstract

Aromatic Green Dwarf (AROD) coconut is a dwarf variety of coconut that is popular for its sweet meat and water. This variety also produces an average 80 nuts per palm per year with a potential production of 166. The development of this dwarf variety presents tremendous economic opportunities for farmers whose farms are close to urban centers, transit spots and resort. In August 2000, Aromatic coconut was registered for buko as its major use with National Seed Industry Council of the department of Agriculture.

The study was conducted to determine the feasibility of establishing Aromatic Green Dwarf (AROD) coconut plantation in Pagsanjan, Laguna. Specifically, it aimed to present the AROD coconut plantation and its planned area of operation; determine the market, production, organizational and financial viability of operating the plantation and processing plant in Pagsanjan, Laguna; identify possible risks and potential problems to the implementation of the project; and recommend specific courses of action based on the findings of the study.

The project life is twenty years and operating as sole proprietorship. The plantation will be established in Brgy. Buboy, Pagsanjan, Laguna. There is 3.25 hectares of land that is available for the project. The three hectares of the idle land will be for AROD plantation.

The AROD plantation will produce fresh buko as its product. During the first productive year of the AROD coconut, the annual yield per tree would be 20 nuts while in the second year, it will be 40 nuts, and in the third productive year it will be 80 nuts. Starting on the fourth productive year up to the end of its productive life, it will be 100 nuts. A 3% rejects was allotted for every AROD trees. AROD coconuts will be harvested monthly during the first and second year of its productive life. In the third year, the trees will be harvested twice a month while in the fourth year onwards; it will be harvested weekly in a rotational manner. The fresh buko will be distributed to six fresh buko vendors in Sta. Cruz, Laguna.

The study was generally found to be a feasible investment option. A total of P589, 760.40 is needed as the initial investment which will be sourced from the owner’s equity. Financial projections showed that the payback is expected at 5.98 years with an NPV value of P 287,494 and an IRR of 19.26%.

A sensitivity analysis was also conducted to test the project’s viability given varying circumstances. The project is feasible in the two scenarios because these scenarios give positive value of NPV and an IRR greater than cost of capital. However, the NPV and IRR became lower as the decrease in production yield increases in each scenario. While in third scenario, the project is infeasible due to the assumption of 15% decrease in production yield.

Language

English

LC Subject

Coconut industry--Philippines, Tree farms

Location

UPLB College of Economics and Management (CEM)

Call Number

LG 993 2010 M17 M46

Notes

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Document Type

Thesis

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