PT Micro Oasis Agritama

Not all agricultural land in Indonesia can be cultivated by farmers throughout the year to meet their needs. Most of the land consists of dry land that can only be planted and harvested one or two times a year; a well rainfed land can be planted three to four times a year. This condition leads to the poor economic condition of most dry land farmers in Indonesia. Micro Oasis Agritama Limited (PT MOA) is a social venture that offers the Micro Oasis System (MOS); an integrated solution using Pitcher Fertigation System which are efficient, effective and affordable. Micro Oasis System is also equipped with a variety of holistic services to help dry land farmers improve their quality of life. In the implementation of all its business activities, PT MOA uses Focus Cost generic strategies considering the narrowed target market (niche market), that is, the dry land farmers. PT MOA offers an integrated solution which is divided into two stages: the pre-project and on-project stage. The Pre-Project phase consists of land analysis, well drilling, land layout, and MOS installation. The On-Project phase consists of farming and financial consultation, cultivation control, and harvest monitoring. Gunungkidul, Wonosari District in Yogyakarta, will be the initial market with 67.000 acres of dry land. The target market are dry land owners and dry land farmers in which the land has the harvest intensity of once a year, who have low social status, but have a strong desire to change and improve their quality of life. To reach its target market, PT MOA uses socio-cultural approach by adjusting all marketing activities to the core values of farmers’ community in Gunungkidul in order to increase awareness and public acceptance of the system offered by PT MOA. There are two operating activities at PT MOA. The main operation provides the whole integrated service of MOS. The second operation is supporting operation that is related to the pitcher production. PT MOA requires 9.2 billion rupiahs for the initial investment. The founder of the company will provide 3.5 billion rupiahs as initial capital. The shortage of 5.7 billion rupiahs is expected to be obtained from venture capital funding. The overall initial capital will be used to finance the initial working capital and operating expenses. In the eight year, the company will repay the venture capital funding and seek long-term loan with the interest of 11%. Of the 10 year financial projections, PT MOA needs 6 years and 7 months to reach the payback period and recorded a value of 5.6 billion rupiahs as the NPV and the IRR of 23%, with an average cost of capital (WACC) of 16%.