PROJECT REPORT

OYSTER MUSHROOM
CULTIVATION & MARKETING

Submitted by
Akhila Abheesh
Mullamangalam, Chelacode
Pathanapuram, Kollam, Kerala
Mobile: 75 10 70 52 09 / 96 33 91 99 03
 PROJECT REPORT

MUSHROOM CULTIVATION AND PROCESSING

Introduction:
Mushroom is a simple form of fungus with high nutritive and medicinal value.
Mushrooms are rich in high quality protein having around 60 – 70 percent digestible
amino acids. It is also rich in vitamins like B.C, D, K and minerals like calcium,
phosphorous, potassium, iron, copper and high Fiber content. Mushrooms have a low
quantity of carbohydrate and fats high quantity of water. Research studies have shown
that it is an ideal food for people suffering from diabetics, heart ailments, hypertension
and anemia.

The Product:
Mushroom has been considered as a delicacy the world over. The oyster mushroom
(pleurotus) which is widely cultivated and marketed. Oyster mushrooms are easier to
grow and less cumbersome to process. The product is available mainly in two forms i.e.
fresh and dried.

MARKET POTENTIAL
Marketing of mushrooms in Kerala is very minimal and no major players are in the
market yet due to very less production of Mushrooms in the state, comparing to other
states like Tamilnadu and North Indian States, Branding is the key for an effective
marketing the Produce & educating the consumers with the benefits of consuming
Mushrooms and providing the Recipes of Mushrooms for those who are not yet cooked
the delicacy with the packets of Mushrooms can attract more demand from the Market.

HORTICROP (Marketing wing of Kerala State Horticultural Products Development

Corporation) outlets are the major scope for retailing the Mushrooms. They are having 14
outlets all over the state. Other major consumers are the Hotels and supermarkets.

Value Addition
Scope of converting the raw mushroom into value added products like Pickle; Ready to
Eat Curry Packets also gets high demands due to the fast life style. Currently no products
are available in the market and competition in that segment is nil or minimal. So excess
production if any can be converted to value added product and no produce wastage will
be happened.

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PRODUCTION TECHNOLOGY

Technology Provider
Kerala Agricultural University, Vellyani, Trivandrum

THE PROCESS
The major process steps are –
Cultivation of mushroom:
• Substrate preparation,
• Steam pasteurization/hot water treatment of substrate.
• Spawning of substrate.
• Filling of spawned substrate in trays and polythene sheet enclosures.
• Incubation of spawned substrate in trays & enclosures.
• Harvesting and storage of fruit bodies.

PROCESSING
• Cleaning and grading.
• Packing of fresh mushroom for marketing

In case of Excess production

• Separation of mushroom for drying.
• Drying of mushrooms.
• Converting to Value added products.
• Marketing under a Brand Name
.
PRODUCTION ESTIMATE
Per yield cultivation of Oyster Mushroom expected to be about 8 to 12 kg per bag which
requires 10 square foot. In the market, oyster mushroom price per kg is about 150 Rupees
currently. Expecting an approximate yield of 10Kg/sq.ft and average of Rupees 1500/-
can be generated per bag in one fruiting section and same bag can be used twice in 30
days without any additional expenses and additional income of Rupees 3000 can be
generated in that period. Considering an area of 1500 sq.ft 150 bags can be placed
.
From a single bag can have three yields in 45 days approximate and total approximate
weight of yield in one cycle will be 30 kg and the income expected is 4500/- per bag in
45 days

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Yearly Production Estimate in short:
Working Days/Year : 300
Fruiting Cycles : 8 in a Year
Estimated Fruiting per section in every 15 days : 1500 Kg
Estimated 3 Fruiting section per 45 days cycle : 4500 Kg
Annual production Estimate of Fresh Mushrooms : 36000kg
360 Days / 45 Days = : 8 Months
8 Months x 4500 Kg = : 36,000.00 Kgs. /Annum

FINANCIAL ASPECTS
Project Details of 36000 Kg Per Annum Production Target

PROJECT COST

1. Land & Building

Sr Item Total Cost
1 Land Lease ` 150,000.00
2 Shed (2000 sq.ft) ` 400,000.00
Total ` 550,000.00

2. Equipments & Machinery

Sr Description Qty Rate Value
1 Sprayer with Pump 6 1750 ` 10500.00
2 Semiautomatic humidifier or cooler 2 4,500 ` 9000.00
3 Room heater/blower 3 6 2,000 ` 12,000.00
4 Other equipment (thermometers, fans etc.) ` 10,000.00
5 Misc. tools ` 6000.00
6 Weighing Machine 4 ` 4000.00
7 Shrink Wrapping Machine ` 45,000.00
Total ` 96,500.00

3. Total Fixed Assets

Sr Description Value
1 Land & Building ` 5,50,000
2 Equipments ` 96,500.00
Total ` 6,46,500.00

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WORKING CAPITAL

4. Utilities Per Month

Sr Particulars Amount
1 Power ` 3000,00
2 Water ` 500.00
Total ` 3500.00

5. Raw material requirement (including consumable in 45 days)

Sr Items / Annum Qty. Rate Value
1 Paddy Straw 2.25 Mts ` 15,000 ` 33,750.00
2 Spawn 22.5 Kg ` 160.00 ` 3,600.00
3 Chemicals (Formalin, Pesticide, L. S ` 1000.00
insecticide etc.)
4 Packing Materials L. S ` 60000.00
Total ` 98,350.00

6. Manpower requirement
S.No Category Nos Salary/Month Total
1 Skilled 2 ` 10,000 ` 20,000.00
2 Unskilled 2 ` 7,500 ` 15,000.00
3 Sales Staff 2 ` 15,000 ` 30,000.00
4 Driver 1 ` 15,000 ` 15,000.00
5 Accounts 1 ` 15,000 ` 15,000.00
Total ` 95,000.00

Total Working Capital Required /month ` 1,96,850.00

7. Printing & Promotion (Only once in a Year subject to requirement)

S.No Category Qty Rate Total
1 Brand Sticker / Packet 15000 ` 2.5 ` 37,500.00
2 Leaflets 50000 ` 1.00 ` 50,000.00
3 Invoice / DO 1000 ` 20.00 ` 20,000.00
4 Danglers 500 ` 2.00 ` 10,000.00
Total ` 1,17,500.00

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8. Project Economics (In 45 Days)
Sr Item Total
1 Sales realization:
Total Beds 150
Approx. Production 30 kg / bed on 3 cycle in 15 days
interval.
Current Price of Oyster Mushroom @ ` 150/ kg.
Total production in one cycle Approx. 30 Kg
150 Beds x 30 Kg = Total Production of 4500 Kg
Sale of 4500 kg @ ` 150 = ` 6,75000.00

9. Cost of Production Estimate

Cost of production for 45 days
1 Utilities (power, fuel, water etc.) ` 3500.00
2 Raw material for 3 Cycles in 45 days ` 98,350.00
3 Manpower (For 45 Days) ` 1,42,500.00
4 Rent (Rs.5000/,Month) For 45 Days ` 7500.00
5 Transportation/freight ` 15,000.00
6 Conveyance & Traveling ` 15,000.00
7 Administrative overheads (Telephone, postage, stationery ` 5,000.00
etc.)
8 Selling expenses (Distribution cost, Commissions & ` 50,000.00
Rebates)
9 Insurance & misc. ` 9000.00
10 Repair & maintenance ` 2,000.00
11 Interest @ 9% for ` 10,83,640.00 ` 1,08,364.00
12 Wastage @ 5% ` 33,750.00
Total ` 4,89,964.00
Total Expected Sales ` 6,75,000.00
Net Profit / in 45 Days ` 1,85,036.00

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10. Annual Estimate
Estimated cost of Production / Annum
Total recurring cost per year( i.e Working Capital ` 3,94,394 x 8 = ` 31,55,152.00
for 8 months as it calculated on 45 days basis)
Depreciation of Building & Equipment @ 5% ` 6,46,500.00 x 5% = ` 32,325.00
Interest for the Loan @ 10% ` 1,08,364.00
Printing & Promotion ` 1,17,500.00
Grand Total ` 34,13,341.00

11. Total Project Cost

S.No Category Total
1 Land & Building ` 5,50,000
2 Machinery & Equipments ` 96,500.00
3 Working Capital for 3 Months ` 5,90,550.00
4 Printing & Promotion ` 1,17,500.00
Total ` 13,54,550.00

SALES & PROFIT ESTIMATE

12. Sales / Annum

Qty in Kg Value in Sales
4500 Kg in 45 days x 8 Months 36,000 Kg
Wastage @ 5% 1800Kg – 36000 Kg ` 51,30,000.00
34,200.00 x ` 150

13. Profit Analysis

Net Profit = {Sales – ` 51,30,000.00 – ` 34,13,341.00 ` 17,16,659.00
Cost of Production}
Income Tax @ 25% ` 4,29,164.00
Profit after Tax ` 12,87,495.00
Annualized Return on Investment (ROI)= 37.877% on second year

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14. MEANS OF FINANCE
1 Promoters Contribution 20% ` 2,70910.00
2 Bank Finance ` 10,83,640.00
Total ` 13,54,550.00

Notes:

1. Mushroom rate shown 150/per kg is the bottom and it’s the rate of wholesale in
bulk. But as per the planned sales method the Mushroom will be packed in 250gms
packet and each packed will be sold @ Rs 70 to the wholesaler. Expected sale per
Kg is Rs 280.

2. Packing cost will not be more than Rs 4 Per packet.

3. After completing 3 cycles of harvesting the paddy staw will be discarded and it can
be used as effective organic compost. The revenue from the sale of compost is not
added in this report.

BASIS & PRESUMPTION

♦ Unit will work 6 days a week (8 hours)
♦ Calculations have been carried out on present data available.
♦ Wastage has been considered at a rate of 5%

IMPLEMENTATION SCHEDULE:
1. Loan Sanction -2 Months
2. NOC-Pollution Control Board -1 Month (If required)
3. Installation of facility -1 Month
4. Power connection -1 Month
5. Training & Trial Run -2 Months
6. Production – 7 Month onwards

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15. Raw Material & Equipment Suppliers
Spawn
Vegetable & Fruits Promotion Council Keralam Mythri Bhavan,
Near DoordarshanKendra,
Kakkanad, Kochi-37
Phone No: 0484-2881333
e-mail: [email protected]
Paddy Straw
Daksh Farm Coyalmannam, Palakkad,
Kerala – 678702
Phone +91-9496252872
[email protected]

Mushroom Grow Bags

Mushroom Training Center Mr. Milind
Savedi Naka Savedi
Ahmednagae
Maharashtra,
Phone: 08046060014
Packing Trays
Bluefin Industries Private Limited No. 412, 4th Street,
Saibaba Colony
Kuppakonam Pudur
Coimbatore – 641038
Tamil Nadu, India
Phone: 9842211918
[email protected]
Shrink Wrapping Machine  
SR Automation 5b Thannasi Kovil Thottam,
ITI Backside, Gnanambika
Mills, Coimbatore - 641029,
Phone: 9843266602

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