CHAPTERI INTRODUCTION 1.1BackgroundResearch Theworld'spopulationismorethanthreetimeslargerthanitwasinthemid-twentieth century.AccordingtotheUnitedNations,thispopulationisexpectedtoincreasebynearly2 billionpersonsinthenext30years,fromthecurrent8billionto9.7billionin2050andcould peakatnearly10.4billioninthemid-2080s.It'salsoimpactedonthemedicaldevicesmarket thatshowssignificantgrowth.In2022,MedicalDevicesMarketsizewasvaluedatUSD 455.50BillionandispoisedtogrowfromUSD481.92Billionin2023toUSD756.59 Billionby2031,growingataCAGRof5.8%intheforecastperiod(2024-2031).This significantgrowthisdrivenbyseveralfactors,includingchronicdiseasescausedbychanging lifestyles,apreferencetowardshomehealthcare,andariseinthegeriatricpopulation.The datashowsfromtheUnitedNations,thenumberofagingpopulationisprojectedrisingfrom 761millionsin2021to1.6billionin2050.Thisnumbergrewevenfasterandbecamea globaltrend. It’sbeen5yearssincetheCOVID-19pandemichappened,thispandemichasdramatically increasedglobalawarenessaboutinfectionprevention,notjustforCOVID-19butforall communicablediseases.Healthcareprofessionalsandthegeneralpublicalikehavebecome moreconsciousoftheimportanceofproperhygienepractices.Thisincreasedawarenesshas ledtomorerigorousimplementationofexistinginfectioncontrolmeasuresandthe developmentofnewstrategiestopreventdiseasetransmissioninhealthcaresettings. Healthcarefacilitiesworldwidealsohaveimplementedstricterhygieneprotocolsinresponse tothepandemic.Theseprotocolsaredesignedtopreventthespreadofinfections,protect healthcareworkersandpatients,andimproveoverallsafetystandards. AccordingtotheDataBridgeMarketResearchanalyses,theAsia-Pacificmedicalclothing marketwhichwasUSD2694.58millionin2021,wouldrocketuptoUSD4584.98million by2029,andisexpectedtoundergoaCAGRof6.87%duringtheforecastperiod2022to 2029.Thesemedicalclothingherereferstotheclothingthatiswornbyhealthcare professionalsduringsurgerytoprotectboththepatientandthehealthcareworkersfromthe spreadofinfection.Surgicalwearcanincludegowns,masks,caps,andgloves.Themarketis mainlydrivenbythegrowingdemandforprotectionagainsthazards.Also,thetechnological 1 advancementinthemedicalfieldisconsiderablefortherisingnumberofsurgerieswhich alsoincreasetheuseofsurgicalwear. Oneoftheproductthatbecameapartofsurgicalwearisagloves.Glovesareacrucial componentofpersonalprotectiveequipment(PPE)usedinmedicalsettings,especially duringsurgicalprocedures.Thepurposeofthisequipmentaretoreducetheriskof contaminationandinfection,helpingtomaintainacleansurgicalfieldandprotectthe healthcareprovider.Surgicalglovesaretypicallymadeofmaterialslikelatex,nitrile,or neoprene,andaredesignedtobehighlydurableandprovideexcellenttactilesensitivity. AccordingtoDataBridgeMarketResearch,Asia-Pacificglovesmarketisexpectedtogain marketgrowthintheforecastperiodof2022to2029.DataBridgeMarketResearchanalyzes thatthemarketisgrowingwithaCAGRof11.1%intheforecastperiodof2022to2029and isexpectedtoreachUSD9,817.60millionby2029fromUSD4,207.42millionin2021. InIndonesia,themedicalglovemarketpresentsaparticularlycompellingopportunityfor investmentandexpansion.Themarket,valuedatUSD40.951millionin2022,isexpectedto growtoUSD70.100millionby2029,ataCAGRof7.98%.IfwelookattheIndonesia’s overallmedicaldevicesmarket,itvaluedapproximately$3.6billionin2021,reliesheavily onimports,witharound70%ofmedicalproducts,especiallyhigh-techequipmentlike diagnostictools,beingsourcedfromabroad.Thisreliancepresentsasubstantialopportunity forforeignanddomesticinvestorstofillthegap,particularlyastheIndonesiangovernment seekstoexpandandupgradethecountry'shealthcareinfrastructure. AcriticalaspectofIndonesia'shealthcarestrategyisthegovernment'sTKDN(Tingkat KomponenDalamNegeri)policy,whichmandatesaminimumpercentageoflocalcontentin medicaldevices.Thispolicy,enforcedbytheMinistryofIndustry(Kementerian Perindustrian),identifies79prioritymedicalproductsthathaveachievedaTKDNvalueof morethan40%.Amongthesepriorityproductsaresurgicalwearandapparel,including surgicalgloves,whicharenowmandatedtobesourcedlocallyandareprohibitedfrombeing imported.Thisregulationnotonlypromoteslocalmanufacturingbutalsoaimstoenhance self-sufficiencyandreducedependencyonforeignproducts.Businessesthatcomplywiththe TKDNpolicybenefitfromgovernmentincentivesandacompetitiveadvantageinsecuring governmentcontracts,crucialforaccessingthepublichealthcaremarket. viii Despitechallengessuchasregulatorycompliance,infrastructurelimitations,andtheneedfor high-qualityrawmaterials,theIndonesianmedicaldevicemarketispoisedforrobustgrowth. ProjectionsfromBMICountryRisk&IndustryResearchsuggestthatthemarketwillgrowat aCAGRof10.8%from2021to2026,potentiallyreachingamarketvalueofUSD1.9 billion.Themedicalglovessector,inparticular,offerssignificantgrowthpotentialduetothe increasingdemanddrivenbyheightenedhygienestandardsandthegrowingnumberof surgicalprocedures. Amidstthesepromisingtrends,PT.CrownTeknologiIndonesia(CTI),establishedin2022in Padang,WestSumatra,hasemergedasakeyplayerintheIndonesianmedicaldevice industry.Specializinginthemanufactureofmedicaldevicesandinvitrodiagnostictools, CTIbeganproductionin2023,focusingondevelopinginvitrodiagnostickits.Theseinclude NucleicAcidAmplificationTests(NAAT)andRapidDiagnosticTests(RDT),marketed underthebrandname"CRown_Lab."Bycollaboratingwithrenownedresearchersand prestigiousuniversities,CTIensureshighstandardsandinnovativesolutions,solidifyingits positioninthemarket. Recognizingthevastpotentialinthemedicaldevicesector,CTIplanstoexpandbyopeninga newbranchinPadangalongByPassStreet,strategicallylocatedforlogisticaladvantages. Thenewbranchisscheduledtocommenceoperationsinearly2028,reflectingCTI'sgrowth trajectoryandmarketconfidence.CTIhasearmarkedaninitialinvestmentofIDR40billion forthisexpansion.Thisinvestmentwillcoverrentingthenewfacility,purchasing state-of-the-artequipment,andotheressentialbusinessactivities.Fundingforthisproject willcomefromvariousinvestors,underscoringtheconfidenceandinterestCTIhasgarnered. Byincreasingtheirfootprint,CTIaimstosignificantlycontributetoadvancingmedical diagnosticsandhealthcaresolutionsinIndonesiaandbeyond,positioningthecompanyatthe forefrontofmedicaltechnologyinnovation. Inconclusion,theglobaltrendsinpopulationgrowthandincreasedhealthcareneeds, combinedwithspecificmarketdynamicsinIndonesia,presentacompellingcasefor investinginthemedicalglovessector.TheIndonesiangovernment'ssupportivepoliciesand thegrowingdemandforhigh-qualitymedicaldevices,includinggloves,createafertile groundfornewbusinessventuresandexpansionsinthisfield.Asthecountrycontinuesto developitshealthcareinfrastructureandreduceitsrelianceonimports,businessesfocusing onlocalproductionandcompliancewithTKDNpoliciesarewell-positionedtocapitalizeon 3 thegrowingmarketopportunities.CTI'sstrategicexpansionandcommitmenttoinnovation exemplifytheopportunitiesandgrowthpotentialwithinIndonesia'shealthcaresector, particularlyinthemedicalglovesanddiagnostictoolsmarkets. 1.2ProblemIdentification PT.CrownTeknologiIndonesia(CTI)isembarkingonamarketexpansionstrategy, leveragingitsestablishedcollaborationswithvariousinstitutionstoopennewopportunities andexpandintobroadermarkets.Thecompanyhasdecidedtoestablishanewbranchin Padang,whereitisalreadylocated,todeepenitspenetrationintotheIndonesianmarket.This strategicmoveaimstocapitalizeonCTI'sexistinginfrastructureandmarketpresencewhile enhancingitscapacitytomeetthegrowingdemandformedicaldevicesinIndonesia. However,thisexpansionplaninvolvessubstantialcapitalinvestment.Toachieveitsgoals, CTIneedstoinvestinadvancedproductionmachinery,high-qualityrawmaterials,andother criticalresources.Theseinvestmentsarenecessarytomaintainthecompany'scommitmentto producingtop-tiermedicaldevicesandadheringtostringenthygieneandqualitystandards, whicharevitalinthehealthcareindustry.Thesignificantfinancialoutlayrequiredforthese initiativesnecessitatesacomprehensivefeasibilityanalysis. So,byconductingafinancialfeasibilitystudyincludingmarketanalysisandfinancialrisk analysisisessentialforCTI.Thiscompanycanensurethatitsexpansionstrategyisgrounded insoliddataandwell-informedprojections.Thisapproachwillhelpminimizerisksand maximizethepotentialforsuccess,positioningCTItothriveinthecompetitiveIndonesian medicaldevicemarket. 1.3ResearchQuestion Basedonthebackgroundandproblemstatement,thisresearchseekstoanswerthefollowing questions: 1.Istheexpansionplanfeasibletobeimplemented. 2.Whatkindoffinancialrisksshouldbeconsiderbythecompanyiftheproject implemented. 1.4ResearchObjectives Fromtheresearchquestions,theobjectivesofthisresearchare: viii 1.ToevaluatethefinancialfeasibilitystudyofthePT.CrownTeknologiIndonesia expansionplanandtodeterminewhetherPT.CrownTeknologiIndonesiawilltake theprojectornot. 2.Todeterminethefinancialriskfortheprojectiftheprojectimplemented. 1.5ScopeandLimitations Thescopeofthisresearchencompassesseveralkeyareascriticaltothesuccessfulexpansion ofPT.CrownTeknologiIndonesia(CTI)intotheIndonesianmedicaldevicemarket.The researchwillfocusonthefollowingaspects: 1.MarketAnalysis:AnalysisofthecompetitiveenvironmentintheIndonesianmedical devicemarket,includingkeyplayers,andmarketshare. 2.FinancialFeasibilityStudy:Analysisofthenecessarycapitalinvestment,including costsforadvancedproductionmachinery,high-qualityrawmaterials,andfacility upgrades.Alsoestimationofpotentialrevenue,operatingcosts,andprofitability. 3.FinancialRiskAnalysis:Thisassessmentaimstoidentify,quantify,andpropose mitigationstrategiesforrisksthatcouldimpacttheproject'sfinancialviabilityandthe company'soverallfinancialhealth. Limitation: 1.DataAvailability:Thestudyreliesontheavailabilityandaccuracyofmarketand financialdata,whichmaybesubjecttolimitationsincompletenessandtimeliness. 2.MarketDynamics:Changesinthemarketenvironment,suchaseconomic fluctuations,regulatorychanges,orshiftsincustomerpreferences,mayimpactthe study'sconclusionsandprojections. 3.AssumptionsandEstimates:Thefeasibilitystudyincludesvariousassumptionsand estimates,whichcarryinherentuncertaintiesandmayaffecttheaccuracyofthe projectionsandriskassessments. 1.6WritingStructure Thisresearchfollowsastructuredwritingformatbasedontheoutlinedchaptersbelow: ChapterI:Introduction Thischapterprovidesanintroductiontotheresearch,includingthebackgroundofthe project.ItdiscussescurrentmarketconditionsandoffersabriefoverviewofPT.Crown TeknologiIndonesia'splantoestablishanewbranch.Additionally,itpresentstheproblem 5 statement,whichincludestwokeyresearchquestions,aswellastheresearchobjectives, scope,andlimitationsoftheproject. ChapterII:TheoreticalFoundation Thetheoreticalfoundationchaptercoversthetheoriesrelevanttosupportingthisresearchin conductingafinancialfeasibilitystudy.Itbeginswithadefinitionofafeasibilitystudy, followedbyananalysisofbothexternalandinternalfactors.Thisincludesmarketanalysis, financialstatementreview,capitalbudgetingtechniques,andfinancialriskanalysis.