Abstract

Author:
Mohamad Firdza Shukery, Wan Nurfatihahtul Syifa’ Zulkipli, Hasfalina Che Man

Doi: 10.26480/jwbm.02.2025.62.69

This is an open access article distributed under the Creative Commons Attribution License CC BY 4.0, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

In Malaysia, the rice industry produces a significant amount of byproducts like rice husk and rice straw. However, finding efficient ways to dispose of and utilize these byproducts poses challenges. The paddy biomass has economic potential, but there is a lack of information on the most profitable technology to use in the local rice industry. This limited knowledge hinders the effective utilization of paddy biomass and the ability to maximize its economic value. Therefore, this study focuses on optimizing the profitability of converting paddy biomass into ruminant feed pellets using the General Algebraic Modeling System (GAMS). The research includes stages such as identifying challenges and requirements, constructing simplified models, developing a profit-maximizing model, and conducting sensitivity analysis. The analysis revealed the successful revenue generation and profitability achieved through the production of paddy biomass and the sale of livestock meat. The profit of livestock industry was measured based on the amount of livestock produce and the sale of livestock meat. The annual profit of RM 5,999,900.00 highlights the ability to generate significant returns. Notably, the substantial output of paddy biomass greatly contributed to revenue generation, underscoring the importance and demand for paddy biomass in ruminant feed pellet production. The estimated return on investment (ROI) of approximately 3.14% signifies a positive return on the initial investment, indicating profitability. Additionally, the estimated payback period of approximately 0.24 years suggests a short duration for recovering the initial investment. This case study provides valuable insights into the factors influencing profitability and offers guidance for maintaining and improving financial success in the industry.