Study of the types and feasibility of the rattan industry for the sustainability of non-timber forest products in North Sumatra

Rattan has significant value in the craft creative industry because of the various benefits associated with its use as a raw material for various handicraft products. This research was conducted to determine the types and sources of raw materials, the types of processed products produced, and the types of processed products, and to determine the business feasibility and income of the rattan industry. The results showed that five types of rattan were used, namely Calamus manau, Calamus scipionum, Calamus caesius, Daemonorops angustifolia, and baliong rattan. The results of the study show that the average income in 2022 obtained by Small and Medium Enterprises (UKM) Mulia Rattan, Sibayak Rattan, Pancur Simalem Rattan, Sejahtera Rattan, and Rattan Aat respectively was 197,990,800, IDR; 13,510,789, IDR; 141,029,989 IDR; 134,029,989 IDR and 228,294,200 IDR. Based on the feasibility analysis, the Internal Rate of Return (IRR) of each UKM was 78%, 47%, 69%, 84%, and 95%, respectively. All IRR values are greater than interest rates, which means that UKM activities are feasible to carry out. BCR for each business is 1.23; 1.29; 1.64; 1.31. All Small and Medium Enterprises are said to be feasible because of BCR>1.


Introduction
One of the Non-Timber Forest Products (HHBK) which is a superior product because it has great utilization potential and is also a renewable natural resource (renewable resources) is rattan.Indonesia is the third largest rattan producer in the world after China and Vietnam.Rattan is a forest product that has the potential to be developed as a trading material, both for domestic needs and for export [1].
Rattan is of great economic importance in the manufacture of handicrafts and furniture because it is rich in fiber, has suitable toughness, and is easy to work with [2].Indonesia is one of the most rattanproducing countries in the world.Almost every year around 80% of raw rattan used by industry in various parts of the world comes from Indonesia [3].Market rattan is superior to Indonesia with a cultivated area of 37,000 hectares followed by Malaysia with around 31,000 hectares.Rattan is easy to cultivate, harvest, transport, store, and market.Rattan as a non-timber forest product has several advantages compared to other forest industry raw materials, namely the product price is relatively cheaper, stiff, durable, beautiful, comfortable to use, lightweight, and has artistic value.[4].The potential and wealth of rattan above is a raw material that can be processed into an industrial product.Sales of furniture itself always run regularly in every region, never experiencing a stalemate in terms of innovation and consumer demand.Opportunities for the rattan-based industry can be seen, among others, from the increase in production and export volumes (for foreign markets).In a sluggish domestic economic condition where people's purchasing power is declining, the export market is an important choice.In addition, this rattan-based industry has very high local content, so it is not too dependent on imported raw materials.Many rattan raw materials are obtained from forests and partly from cultivation.This industry absorbs a lot of labor [5] The rattan handicraft industry there is Medan Petisah District, Medan City is one of the industries that processes rattan raw materials into various furniture products needed by the community.Industry Small and medium enterprises (UKM ) process rattan into various types of rattan crafts, such as baskets, tables, chairs, serving lids, lampshades, and other products.Thus, nationally the development of this business will have a positive impact on the optimal utilization of Indonesia's natural resources generate foreign exchange, and expand the workforce.Bearing in mind that the main objective of each business activity is to obtain the maximum possible income and incur the minimum possible costs so that the business activity can continue and is feasible to be cultivated.Therefore, it is very important to know the type and sources of raw materials, types of processed products generated as well as the level of income and feasibility of a rattan business activity.

Time and place
The research was conducted in February -May 2023 in the Rattan Handicraft Trading Business in the Small and Medium Enterprises Industry (UKM) in Medan Petisah District, North Sumatra Province, Indonesia.Medan Petisah District is bordered by Medan Helvetia to the west, Medan Barat to the north and east, and Medan Baru to the south.In 2022, Medan Petisah District had a population of 73,565 people, with an area of 6.82 km 2 [6].The location selection was carried out purposively, namely choosing the location deliberately with several considerations: (a) the location is a rattan handicraft industry that is still running; (b) The products of the handicraft industry have market access in marketing their products.

Data collection.
The data collection method is done by using several methods as follows: a. Observation is a data collection technique that is carried out by making direct observations of the business to be studied.b.Interview also called an oral questionnaire, is a dialogue conducted by the interviewer to obtain research information.The questionnaire is carried out by compiling a list of questions that must be answered by respondents.c.Documentation is taking pictures of rattan crafts found in trading businesses when conducting research [7].

Data analysis
Analysis of the data used to obtain information on the profile of SMEs and the resulting processed products uses qualitative analysis while determining the income and feasibility of a rattan handicraft business using quantitative analysis (Table 1).Total costs are all costs incurred to produce production [9].The total cost can be calculated by the following formula: TC = TFC + TVC (1) Notes : TC (Total Cost) = Total business costs TFC (Total Fixed Cost) = Total fixed costs TVC (Total Variable Cost) = Total variable costs Total receipts are all receipts obtained by the company within a certain period from selling their products [10].TR is the product price multiplication (P) and the quantity sold (Q) which can be written mathematically as follows: Notes : TR (Total Revenue) = Total revenue; P (Price) = Product price per unit; Q (Quantity) = Number of products sold According to [9] profit or profit is the total revenue value of the company minus the total costs incurred by the company.A business will be said to make a profit if the I value is positive (I > 0) where TR > TC.Net income can be calculated by the formula: I (Income) = Income or profit;TR (Total Revenue) = Total revenue;TC (Total Cost) = Total cost Capital as the main element of production activities experiences depreciation in one period.According to Maramis [11] to calculate the cost of depreciation of equipment use the following formula: Business efficiency analysis is calculated by the Return Cost Ratio (RCR) .To find out the calculation of the revenue-cost ratio, can be calculated using the following formula [12] : Notes: TR (Total Revenue) = Total revenue; TC (Total Cost) = Total cost of business NPV is an investment valuation method that uses discounted proceeds (net cash inflows) based on the desired cost of capital as a basis for valuation investment [13] NPV = -IO∑   (1+)   =1 (6) Notes : CFt = cash flow per year in period t; r = Interest rate/discount rate;t = Period;n = Number of periods IO = Initial investment in year 0 The internal rate of return can be identified as the interest rate that will make the total present value of the proceeds expected to be received equal to the total present value of capital expenditures.The IRR must be sought by trial and error [14] IRR = i1 + (i2 -i1)  1 ₁−₂ (7) Notes : NPV1 = positive Net Present Value; NPV2 = negative Net Present Value;i1 = interest rate 1 or discount rate which produces a positive NPV; i2 = interest rate 2 or the discount rate that results from negative NPV Assessment criteria: • If the IRR > the applied interest rate, the investment is received, or the business is declared feasible.
• If the IRR < the applied interest rate, the investment is rejected, or the business is declared unfit.
BCR can be calculated by the formula [13]: IO (8) Notes : IO = Initial investment; CFt = cash flow per year in period t; r = Interest rate/discount rate t = Period ; n = Number of periods An industrial project is said to have an economic advantage, feasible to implement if the BCR value is greater than one.If the BCR value is less than one, then the project industry will incur economic losses if implemented [12,13].

Profile of rattan industry
Rattan Craft UKM began to develop in Medan Petisah District in 1970 -2000 offering a variety of processed rattan products.Rattan craftsmen have an average productive age of 47-66 years.The average number of UKM employees is 7 people.SME owners not only produce visually beautiful products but also maintain the quality and sustainability of their productivity.Business owners use rattan that is harvested responsibly and prioritizes environmental sustainability.The rattan used for the industries of the five SMEs comes from rattan-producing regions in Indonesia, namely Aceh, Padang, and Kalimantan.The customers who are rattan SMEs come from within the city and also from outside the city, such as Nias, Aceh, and Pekanbaru.The profile of Rattan Craft UKM can be seen in Table 2.

Types of Rattan
Observations at the study site obtained 8 types of rattan used for the production of rattan crafts, 2 of which were processed rattan, namely fitrit rattan and leping rattan (Table 3).Fitrite rattan is processed from fresh rattan core while leping rattan is processed from fresh rattan skin.The highest rattan price is Manau rattan, which is IDR 41,000/stem, while the lowest rattan price is Gum rattan (Daemonorops angustifolia) which is IDR 5,700/stick.Each rattan has different uses.Sap rattan is one of the producers of raw materials used as materials for rigging, baskets because it is strong and difficult to break.Sap rattan grows in the lowlands to the mountains with an altitude of 300-600 meters above sea level, which has a wet climate.This rattan is one of the large rattan.It grows in clumps and sometimes propagates on other plants.Sap rattan has a solitary stem with a diameter of 20-25 mm and a segment length of 30-35 cm.The color is yellowish when young and when dry the color is yellowish brown.[16].Sega rattan (Calamus caesius) is found in Kalimantan and Sumatra on dry land in the lowlands to the hills.Fresh rattan is grassy and grows upright with 30-104 stems per clump.The stems are yellowish green and after being traced and dry they become egg yellow in color and shiny.The surface of the rattan is golden, shiny, and unique [17].The length of the stem can reach 200 meters and the length of the stem segment is 20-60 cm.Stems without leaf sheaths are 7-12 mm in diameter with leaf sheaths being about 20 mm.Sega rattan that has gone through the smoking process, the stems become yellowish white.Sega rattan is used to make baskets, handicrafts, and rigging Semambu rattan is spread in Sumatra, Kalimantan, and Java.This species grows in clumps, climbing until it reaches a length of 100 m or more.This species grows in the lowlands to the mountains and is widespread up to an altitude of more than 200 m above sea level.The diameter of the stem with the leaf sheath is 50 mm.While the diameter of the stem without a midrib is 25-35 mm.This rattan is light brown or light brown to blackish brown.This rattan is classified as durable class III or moderate [15].
Manau rattan (Calamus manau) is found in Kalimantan and Sumatra.The climatic conditions favored by rattan are wet climates and live well at an altitude of 50-600 m above sea level.This rattan grows singly and vines between the trunks and branches of trees.Manau rattan generally has an olive color.The diameter of the stem without leaf sheaths is up to 80 mm, with leaf midribs up to 110 mm and a node length of 40 cm.The total length of the stem, when it propagates and has matured, can reach 100 m.The diameter of the trunk is quite large, strong, and sturdy.Rattan is widely used for chair frames, tables, and other furniture frames.17]Fitrite rattan comes from the inside of the rattan plantsega which is shaped like a stick used for woven material.Utilization of the outer part of the raw material of fitrit rattan, namely as a strap which is usually used in making frames.Fitrit is a rattan material that comes from the inside or core of a small rattan plant, resembling a stick with a length of up to 6 meters which is generally used in the weaving process, namely to give a covering layer to furniture.Fitrit is usually divided into different diameter sizes ranging from 1 mm to 5 mm [18].The total cost of rattan craft in Medan Petisah District can be calculated by adding up the fixed costs and variable costs.The total cost is the sum of the total variable costs (variable costs) plus the total fixed costs [15,19].There are 5 UKM with each total cost reflecting the total expenditure of each UKM during the 2019-2022 period (Figure 1).There has been a decrease in total costs from 2019 to 2020.This was due to the presence of Covid-19 which caused a lockdown, thus hampering the sale of goods.Therefore, there is a decrease in the production of goods so the costs incurred also decrease.The total cost of each UKM is different, this is due to differences in variable costs and fixed costs incurred by each UKM.These costs include raw material costs, labor wages, land and building rent, electricity, and other costs.To be able to obtain maximum profit, each company must be able to increase its production activities/volume.On the other hand, if production volume increases, it will affect production costs, which means the production costs required to make the product will be greater.Production costs required always increase from year to year caused to rising raw material prices, increases in basic electricity rates, and so on [16,20].

Total Revenue.
Total revenue is the total income earned by a business.Total revenue can be calculated by multiplying the amount of production by the selling price per unit of production.The amount of this receipt is a key factor in determining the net income to be earned.
Figure 2. shows the total acceptance of 5 Rattan Craft SMEs in Medan Petisah District for a period of four years, namely 2019 to 2022.From 2019 to 2020 there was a decrease in total revenue from each UKM and rose again in 2021.This was due to the Covid pandemic -19.The Covid-19 pandemic made it difficult for rattan craftsmen to improve their marketing performance and coupled with the government's policy to implement PSBB (Large-Scale Social Restrictions) and the implementation of the New Normal which made consumers less interested in buying products made from rattan [21].
Based on Figure 2, the highest total revenue ( IDR 1,020,000,000 ) was obtained by Rattan Aat in 2022 and the lowest one (IDR 266,640,000) was obtained by Pancur Simalem Rattan in 2020.The discussion table above shows the trend of total revenue from each Rattan Handicraft UKM for the last four years.There are variations in revenue from year to year for each UKM, which reflects changes in market conditions, consumer demand, and the business strategy adopted by the UKM.In general, total revenues have fluctuated, with some UKM experiencing a decline while others experiencing an increase.

Net income.
The success of a business can be measured by the income earned from the sale of the products it produces.Revenue can be calculated by subtracting production costs from the amount of production produced.Total revenue can be obtained by subtracting the total cost of production from the total revenue during the production process.Figure 3 shows the net income of 5 Rattan Handicraft UKM in Medan Petisah District during the four years.Net income is income after deducting operational costs and other expenses.In this table, it can be seen that the net income of each UKM has fluctuated from year to year.This shows that there are variations in the financial performance of these UKMs.Some UKM may experience an increase in net income from year to year, while others may experience a decrease or change insignificantly.This change in net income can be influenced by factors such as an increase or decrease in market demand, changes in raw material prices, and the business strategy adopted by these UKMs.
Based on Figure 3 it is known that the highest income ( IDR 228,294,200 ) was obtained by Rattan Aat in 2022 and the lowest one was obtained by Sibayak Rattan in 2020.These numbers clearly showed that the income of each UKM decreased from 2019 to 2020 and then rose again from 2020 to 2021.This decrease and increase in income is related to the Covid-19 pandemic.The increasing COVID-19 in Indonesia will prolong the nightmare for Micro, Small, and Medium Enterprises (UKM), especially in Indonesia, not to mention the various policies that have been made by the government such as Social Distancing (maintaining social distance), Physical distancing (maintaining physical distance) [22].

Tool Shrinkage.
Equipment depreciation is the amount of economic sacrifice that must be calculated every year from the production equipment during the production process (IDR per production process) [23].This depreciation value is obtained from calculating the number of equipment units minus the residual value (residual value) multiplied by the price and then divided by the economic life.So that the depreciation value of the equipment is obtained per year.In Figure 4 there is data regarding the tools used in the Rattan Craft UKM in Medan Petisah District.The data includes the purchase value of the equipment, the residual value of the equipment, and the calculation of equipment depreciation.The total purchase value of all the tools is IDR 6619000, while the residual value is IDR 66190001,323,800.Equipment depreciation is the process of reducing the value of an asset over its lifetime.The total depreciation of the equipment in the table is IDR 769,211.This data provides information about the depreciation value of tools at Rattan Craft SMEs in Medan Petisah District.This depreciation is important for calculating operational costs associated with the use and maintenance of these tools, as well as for estimating the value of assets remaining after being used for a certain period.

Business Efficiency.
Business efficiency means that the costs incurred to generate profits are smaller than the profits derived from using these assets [20].UKM business efficiency can be calculated by dividing the total income earned from 2019-2022 by the total costs from 2019-2022, which can be seen in Figure 5.
Business efficiency serves to measure the extent to which a business can generate optimal income by minimizing costs incurred [24].The higher the value of business efficiency, the better the business is at generating income relative to the costs incurred.The research results show that Pancur Simalem Rattan UKM has the highest business efficiency with a value of 1.64.This value is > 1, which indicates that this business is capable of generating high income at relatively low costs.Meanwhile, Mulia Rattan UKM has the lowest business efficiency with a value of 1.23 which also means that the business is efficient.However, it should be noted that business efficiency is not the only factor that determines the success of a business.There are other factors such as product quality, and marketing strategy.Feasibility analysis is an analysis that compares costs and benefits to determine whether a business will be profitable, expressed in present value to determine the eligibility criteria or benefits of a business [15].A financial feasibility analysis is performed to evaluate whether a business generates sufficient added value to compensate for the costs and risks involved.Several parameters were used in this analysis, such as NPV, IRR, and BCR.Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows.All SMEs in the table have a positive NPV, indicating that the business generates added value.The Internal Rate of Return (IRR) is the rate of return that produces an NPV of zero.All SMEs in the table have an IRR that is higher than the discount rate (interest rate), which is 5.70%, so the business is considered profitable (Figure 6).Benefit-Cost Ratio (BCR) is the ratio between the benefits generated from a project or business and the costs incurred [19].All SMEs in the table have a BCR higher than 1, indicating that the benefits are greater than the costs incurred
The highest income was obtained by Rattan Aat in 2022 and the lowest income was obtained by Sibayak Rattan in 2020, clearly showing that the income of each UKM decreased from 2019 to 2020 and then rose again from 2020 to 2021.Rattan craft SMEs in Medan Petisah can be said to be feasible to run.This is because the NPV value for each business is > 0, IRR > interest rate, and BCR > 1.So it can be concluded that the five rattan handicraft industry businesses are financially feasible.This demonstrates that these businesses can generate sufficient profits to compensate for the costs and risks involved cost (Rp); HA = initial price or purchase value of the equipment (Rp); HB = Final price or salvage value (20% of the equipment purchase price (Rp); T = Economic life of the tool (capital)

Figure 1 .
Figure 1.Total cost of Rattan Craft in Medan Petisah District for 2019-2022

Figure 4 .
Figure 4. Depreciation of Tools in Rattan Craft in Medan Petisah District

Figure 5 .
Figure 5.The efficiency of Rattan Handicraft Business in Medan Petisah District

Figure 6 .
Parameters NPV (a), IRR (b), and BCR (c) for feasibility analysis of financial

Table 2 .
Profile of Rattan Craft UKM in Medan Petisah District

Table 3 .
Types of rattan and their prices