[page 108↓]

9.  Evaluation

9.1. With respect to the plan and to development expectations

In the Monitoring Section was shown that the project results were not as good as expected. In order to develop the project for the further future expected values of variables (see table 24) should be still achieved. To reach these values, following activities should be done:

If these conditions can be reached, the project in the next five years (until 2008) will show results as follows below:

Size of Farm

IRR

NPW

BCR

Larger size of farm

6.70%

-771.39

1.25

Middle size of farm

44.58%

2640.61

1.55

Small size of farm

7.88%

-303.07

1.38

With the assumptions:

25 kg fresh cocoons/box; 3 boxes/period; 10 periods/year; 2.35 USD/kg of fresh cocoons

25 kg fresh cocoons/box; 2 boxes/period; 10 periods/year; 2.35 USD/kg of fresh cocoons

25 kg fresh cocoons/box; 1 boxes/period; 10 periods/year; 2.35 USD/kg of fresh cocoons

Reference of interest = 13 %, before financing.
(The complete of calculation is shown in appendix 49)

The project still has IRR higher than reference interest of the bank. The middle land has the best results than the other two sizes land, because middle land had better results in the last years project in comparison with the small and larger land.


[page 109↓]

To increase values of IRR and NPW, farmers should develop their income. The income can be increased with developing higher yields of fresh cocoons per box, both quantity and quality of cocoons. The income can not be increased within periods of silkworm rearing.

The expected value of period of rearing of silkworms per year was at maximum value: 10 time periods per year. So the expected value of fresh cocoons yield per box is 25 kg, as one possibility which can be developed. Theoretically, fresh cocoons yields can be increased to above 25 kg per box. One box eggs contains 25,000 eggs. They hatch and develop to become mature silkworms ready to spin cocoons. The weight of one fresh cocoon is about 1.5 to 2.0 g (see table 28). If mortality rate of worms is 25 percent so still 30 kg of fresh cocoons per box is feasible.

The other possibility to increase income is through quality. The market value of fresh cocoons is depending on percentage of broken cocoons and contents of silk. The sell price was expected with Rp.20,000 (equals USD 2.38) in condition 6 percent of broken cocoons and 23 percent contents of silk (see Appendix 1). It is possible to reach a higher market value if farmers rear silkworms with more intensively, e.g. more feeding, better hygiene in rearing sheds etc. But it is definitely more difficult to get a percentage of silk of more than 23 percent because contents of silk also depend on the breeding of silkworms. So farmers have more possibilities to increase the market value of cocoons through decreasing percentage of broken cocoons. Broken cocoons can be reduced if the silkworms, at the cocoon processing phase, are handled carefully, e.g. the only collection of silkworm that are ready for cocooning; using optimum seriframes for processing of cocoons.

To increase income through setting up the aspect of quality is rather difficult. But it could be more feasible for the next future that farmers reach better experience of sericulture rearing in future.
If yields of fresh cocoons can be achieved up to 30 kg per box, results of investment analysis for the next five years (until 2008) is as below:

Size of Farm

IRR

NPW

BCR

Larger size of farm

25.99%

2,156.52

1.45

Middle size of farm

55.84%

4,592.54

1.79

Small size of farm

21.68%

672.90

1.59

(Reference of interest = 13 %)

With results as such the investment of analysis is more profitable.


[page 110↓]

To develop the ongoing sericulture project at BSA there should also be improvement done through rearing assistance of sericulture at the farmers' side, and BSA as nucleus of the project, should be enhanced as well.

9.2. SWOT-Analysis

SWOT-Analysis is a systematic identification and a strategic decision making operation.

The aim of SWOT is to develop a plan that takes into consideration many different internal and external factors and maximizes the potential of the strengths and opportunities while seeking minimize the impact of the weaknesses and threats. (http://erc.msh.org/quality/ittools/itswot.cfm)

The internal variables are composed of variables such as: management, structural organization, production and operation, finance and human resources. Internal data is found from inside the company itself, e.g.:

External variables are outside of company control and the company has no power to control these external variables such as:

A macro variable is a large social power and can influence all in the micro industry such as: economic, politic and government, culture, demography, environment and technology.

Micro variables are those involved in the environment that have a first hand job in influencing the market industry, through costumer bargaining power, supplier bargaining power, new comers threat, competition between similar companies, and substantial product.

However, external data can be collected from outside company resources such as: market analysis, competitor analysis, community analysis, supplier analysis, government analysis, and other important community group analysis.


[page 111↓]

The logical base idea from SWOT is to maximize strength and opportunity, beside it seeks to minimize weakness and threats. In other words, SWOT-Analysis a situation analysis because Business Practitioners must analyses factors in company strategy (Strength, Weakness, Opportunity, and Threat).

Process of SWOT Analysis

SWOT-Analysis strategy considers four conditions:

  1. Strength & Opportunity (internal)
  2. Opportunity & Weakness (external vs. internal)
  3. Strength & Threat (internal vs. external)
  4. Weakness & Threat (external)

Figure 15: SWOT Analysis

Explanation:

Quadrant I

Company is in the current situation. The company has opportunities and strengths that can be used. Growth oriented strategy should be applied in this condition.


[page 112↓]

Quadrant II

Although facing some threats the company still has internal strengths. Diversification strategy (product or market) should be applied because the company has internal strengths that can be used on long period opportunities.

Quadrant III

The company is facing a great market opportunity, but on the other hand they also face some internal weaknesses. A business condition in Quadrant III is similar with a question mark in the BCG-Matrix. They must focus to minimize internal company problems in order to reach market opportunities.

Quadrant IV

The company is in a poor condition because they face some threats and deal with internal weaknesses.

SWOT-Analysis of BSA

The SWOT-Analysis of BSA was conducted in 2003. The data were collected from several activities: interviews with farmers and project staff, utilization of available reports, etc. The aim of this SWOT-Analysis for BSA is to develop a future plan that takes into consideration many different internal and external factors, and maximizes the potential of the strengths and opportunities while minimizing the impact of the weaknesses and threats from BSA itself. With this analysis and improvement of sericulture in the farmers, the project sericulture at BSA can be developed for the future.

The result of SWOT-Analysis of BSA is presented in table 30


[page 113↓]

Table 30: BSA SWOT-Matrix

Strengths

Although BSA is a relatively young NGO, nevertheless, the program of sericulture has involved a lot of farmers and women workers at cocoon processing. With this support it is still possible for BSA to develop furtheron sericultural area in the future.

The most of farmers has a family with 2 to 4 children. Therefore, family labour at the farmer level is available.

BSA has good cooperatives with Universities, Research Institutions and local Government in Central Java. Furthermore BSA also has good cooperatives with international NGOs: AusAID, CRS, DFID-British Embassy, Misereor-Germany, etc. This cooperation provides
chances for BSA to get support in technologies (through training, seminars, etc) and financing for developing of the project.

BSA has the complete machinery for silk processing. These machines have high capacity. BSA can buy cocoons from the farmers with high capacity.

The silk clothes are made with traditional machine (ATBM = Alat Tenun Bukan Mesin). These clothes are exclusive and of high value.

Weakness

The silkworms have fluctuation of quality. These are caused by quality of eggs, newly hatched silkworm rearing, distribution of silkworms - so that the production of cocoon can be influenced. The cocoons production are lower.

Most of the farmers do not have irrigation on their land. They can not rear silkworm in dry season, especially in time from August to September, because mulberry leaves are not available.

Ability of investment fund is very limited so that require long time to extend business.

Availability of expertise in marketing are still few. Increasing of the product's volume could present difficulties at product marketing.

Opportunities


[page 115↓]

It is still possible to expand the project to the farmers. Most of farmers want to join the project. It can be seen if Banyumas Sutera Alam offers the training, the number of participants will be high.

Government research institutions and Universities are doing research in sericulture every year. Banyumas Sutera Alam can provide information; know how; eggs from these researches.

BSA has training offers from all donors and government each year. This could give chances for BSA to improve its capability.

The market is still open with high capacity, especially for cocoons. So that BSA has still chance to market cocoons.

Threats

Because target group are small farmer in rural region the farmers are not well educated. BSA should give information through more practice and activity. The transfer of know how needs more time and patience than in cases of educated people.

The government has the monopoly of the egg production. Hence, it is difficult to get eggs from another source.

The world market price of cocoons is lower than Banyumas Sutera Alam, especially those from China. Therefore Banyumas Sutera Alam can market their cocoons if the price is lower or equal with the current price.

The price of synthetic fabrics that are silk-like is cheaper than pure silk. It is difficult to compete with the synthetically produced fabrics.


[page 116↓]

Most people know that silk means brightness, very soft texture and cheap product. The image of synthetic silk is stronger than pure silk. So that people want to buy only synthetic silk which fulfils their expectations as mentioned above.

Based on the aspects resulting from the SWOT-Analysis a TOWS-matrix was developed.
A combination of several external factors (threats and opportunities) and internal factors
(weaknesses and strengths) lead to the composition of certain strategy-elements. These are
classified in short- (combination of strengths and opportunities), middle- (combination of
strengths and threats as well as weaknesses and chances), and long-term (combination of

threats and weaknesses) elements. The TOWS-Matrix is presented in table 31.

These elements of strategy were combined to three complete strategies:

  1. The strategy for breeding of eggs;
  2. The strategy for sericulture cultivation at the farmers;
  3. The strategy for marketing.


[page 117↓]

Table 31: BSA TOWS-Matrix


[page 118↓]

The strategy for breeding of eggs

The problem of the eggs' quality can be handled with following strategies:

SO- Strategy:

-Invent innovations by applying silkworm techniques.

WO- Strategy:

-Seek and apply new egg strains with a better quality through government and Universities research

ST- Strategy:

-Establishment of breeding research with institutions and founders.

WT- Strategy:

-Providing with other sources of silkworm eggs

The strategy for sericulture cultivation at the farmers

SO-Strategy:

-Improvement of better sericulture activities with farming sample

WO-Strategy:

-Utilizing the training program to produce expertise

-Increase the farmers' awareness for the importance of silkworm farm operations.

ST-Strategy:

-Skills improvement of farmers through a training program which

is held by BSA.

WT-Strategy:

-Forming of groups of silk farmers to assist the increase the farmers' ability.

-Study comparison and cooperation with other institutions.

-Propose of long-term loan for the expansion of the effort.

The strategy for marketing.


[page 119↓]

SO-Strategy:

-Conservancy quality product and quality service to form the positive image for company.

-Make silk material to become silk textile.

-Cooperation with government institution or school for making of batik uniforms.

-Expand market compartment to improve marketing.

WO-Strategy:

-Optimizing the production volume by increasing employees' skills.

-Improve marketing promotion effectively and efficiently.

ST-Strategy:

-Maintaining quality product to face the competitor.

-Increasing the cocoon production volume.

-Determination of market goals (sale position outside area of product sale of non-pure silk).

-Socialization of pure silk product

-Existence made in non-machine-weaving-tools (ATBM).

WT-Strategy

-Recruit expertise in marketing area to increase the company's

performance

9.3. With respect to the theorem of project cycle analysis

To develop the ongoing project at Banyumas Sutera Alam for the future some of the plans should be revised. Three categories of main problems should be worked out, namely:

9.3.1. Breeding of silkworms.

Breeding of silkworms needs research and laboratory facilities. Banyumas Sutera Alam can not reach these without the support from other institutions. Banyumas Sutera Alam should work together with them. The research of silkworm breeding needs a long time but Banyumas Sutera Alam’s farmers have an immediate need of higher quality of silkworms. To give this solution besides the researches are done, Banyumas Sutera Alam should request a permit to import silkworm eggs from abroad. Many countries like Japan, China and South Korea have good strains of silkworms and these are sold as commercially. Banyumas Sutera Alam can import and try those at the project location. To avoid dependence for egg supply from Government Banyumas Sutera Alam should provide research as well. The costs of eggs should be calculated according to demand, for they could be higher than before. For the short time Banyumas Sutera Alam can give subsidy to the farmers. Subsidy could be removed if future yields of fresh cocoons are higher than before.

9.3.2. Cultivation of silkworms at farmer’s field.

The rearing of sericulture at farmers sheds should be developed. The farmers should be trained and kept up to date. The framer groups should meet regularly. The small area Pilot Project should be provided and optimum cultivated. This could serve also as a small training centre for the farmers. The newly hatched silkworms should be reared directly at farmers
[page 120↓]rearing sheds. The leader of the farmer group can organize the rearing and distribution of newly hatched silkworms.

9.3.3. Marketing.

Banyumas Sutera Alam can market silk products as silk clothes, silk yarn and cocoons. The market for clothes is smaller than silk yarn or cocoons but the profit of clothes is higher. Banyumas Sutera Alam should offer and get a contract for the marketing of silk clothes to government- and private institutions, e.g. as uniforms. Silk yarn and cocoons could be sold easier because the market is open. The problem is the price of cocoons that is higher at Banyumas Sutera Alam project than local market price. Banyumas Sutera Alam can redefine the price of cocoons from the farmers. The criticality of expectation values of the project
(see table 25) show that the limit of cocoon price is USD 1.65. The current market price is USD 2.00, so that Banyumas Sutera Alam can buy within this price level.

No matter how well a project has been identified, prepared and appraised, its objectives can
only be realised when it has been properly executed. All projects face implementation problems, some of which cannot be foreseen. Adequate supervision is therefore of high priority. The project, a detailed implementation plan/schedule should be prepared again. This plan outlines actions to be taken by the respective parties responsible for the next implementation. This plan should be prepared in sufficient detail to ensure that the project is implemented more efficiently.

Monitoring and Evaluation should be reported again. Results and recommendations drawn from these reports are to be fed back into the design and implementation for future, so the project will be further developed. The project cycle starts again and continues.


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