In accordance to PT. Bakrie Building Industries mission to be a manufacturer in various building products and to grow more aggresively, PT. BBI plans to diversify its products into various non-asbestos based building products in addition to its existing asbestos based products,



To support this plan PT. BBI has commissioned Business Advisory Indonesia to conduct a market survey for the Asbestos Free Building Product (AFBP). The result of the survey indicates that the demand projection is very low. Based on the feasibility analysis using this demand projection, Strategic Alternative 1, to maintain the asbestos pipe line, produce asbestos building product for three years then start produce the AFBP, is the only alternative that results in a positive NPV under 24% cost of capital. With cost of capital above 24%, this project is not feasible.



The major problem faced by PT. BBI is caused by the excess capacity due to low sales volume.



Research location: PT Bakrie Building Industry

Supervisor: Prof. Donald A. Lecraw

Accepted: December 1991