The kenaf plant is eco-friendly, renewable, low in cost and not meant to be a food source, owing to its potential\ncommercial value in Malaysia, the government has allocated millions of ringgit for research to develop a viable kenafbased\nindustry. This study is an attempt to assess the financial and technical performance of kenaf cultivation to produce\nfiber usage in automotive components. The financial data were collected through interviews with kenaf growers and\nfrom group discussions as well as production data collected from CMPC (Kenaf Processing and Marketing Centre)\nBachok-Kelantan. The financial data were analyzed using Microsoft Excel software while Eview8 was used to analyze\nthe production data. Three scenarios of kenaf production per hectare were assumed which were 15, 12 and 10 ton.\nAccording to the data analysis; the results revealed when kenaf production was 15 ton/ha, the farmer made a maximum\nprofit of 37% from the subsidy provided by the Lembaga Kenaf Dan Tembakau Negara (LKTN) or National Kenaf and\nTobacco Board, which was more than double the profit margin without subsidy. The financial analysis illustrated that all\nthe three scenarios were viable when using the Benefit Cost Ratio (BCR) as an indicator. However, the production of\n15 ton per hectare was the best of the three scenarios due to the five-year payback period, which was equal to half the\nperiod run on the model of the financial analysis. Additionally, the analysis of the production input (labor and chemicals)\nshowed a significant effect on kenaf production as indicated in the analysis of Ordinary Least Square (OLS).
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