Feasibility study of processing wood twig waste into liquid smoke at the integrated waste management facility Diponegoro University

Abstract The pruning of trees along the road which is carried out every day by Diponegoro University causes piles of wood twig waste. There is no processing system for this waste. On the other hand, wood-waste can be processed into liquid smoke. Liquid smoke produced from processed wood-waste will not leave a coconut taste like liquid smoke in general and has a more distinctive and smokier aroma when it is used. This research aims to assess the market, technical and financial feasibility of processing wood twig waste into liquid smoke at the integrated waste management facility of Diponegoro University. Market feasibility was considered through Segmenting, Targeting and Positioning (STP) framework and marketing mix-4P. Technical feasibility was considered through calculating the availability of raw materials, production capacity and facility requirements. Financial feasibility was considered using the Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period (PP), and Profitability Index (PI) methods. The results indicate that, provided at least 80% of the produced output is successfully sold at a price of IDR 35,000 per liter, the investment in processing wood twig waste into liquid smoke is considered feasible from market, technical, and financial perspectives.