Economic feasibility analysis of a Seed Processing Unit

Ana Paula Cunha and Ricardo Harbs

Revista IPecege, 2015, vol. 1, issue 3/4

Abstract: The objective of this work is to determine the economic viability of installing a Seed Processing Unit (SPU) on a rural property located in the municipality of Brasília/DF. Before the project (scenario A), soybeans produced with seed quality were delivered to a large company in the sector, which handled the processing and marketing stages, remunerating the producer with a 9% bonus on the price of the soybeans. In a second phase (scenario B), it is considered that the producer will invest in the construction of a SPU on their property, carrying out the processing of the soybeans and being remunerated with a 40% bonus on the price of the product delivered to the company. Knowing the results generated in each scenario, it is possible to verify the variation in net operating revenue provided by the investment and calculate financial viability indicators such as Net Present Value (NPV), Internal Rate of Return (IRR), Discounted Payback Period (DPP), and Profitability Index (PI). In addition to these indicators, calculated under the assumption of using own resources, the work includes an analysis of the project's financing conditions. When considering obtaining credit, which has a negative real interest rate, it is observed that the NPV increases significantly, rising from R$ 11,082,279.19 (in the case of investment with own resources) to R$ 14,716,511.27.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Date: 2015
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