NITHYA MUSHROOM FARM

CHAPTER-1
EXECUTIVE SUMMARY:
Mushrooms are the fleshy, spore-bearing fruiting body of a fungus,
typically produced above ground on soil or on its food source. They
contain numerous spores, functionally similar to seeds of the higher
plants for propagation of fungi. The economic importance of
mushroom lies primarily in their use as food for human consumption.
The exotic flavour, taste and freshness of mushroom have made it an
important delicacy in human diet. Mushroom is considered to be a
complete, healthy food and suitable for all age groups. Though, the
nutritional value is determined by the type, stage of development and
other environmental conditions, mushrooms are rich in proteins,
dietary fibre, vitamins and minerals. They have insignificant lipid
level and high proportion of polyunsaturated fatty acids resulting in
low calorific value. The protein content, though varies greatly in
different mushrooms, is usually high.
Mushrooms are an excellent source of vitamins especially C and B
(Folic acid, Riboflavin, Niacin and Thiamine) and minerals like
potassium, sodium and phosphorus. It also contains other essential
minerals like Cu, Zn and Mg in traces.Mushrooms are also known to
have medicinal values as these have been shown to promote immune
function, boost health, lower risk of cancer inhibiting tumour growth
and support body's detoxification mechanism. Fresh mushrooms have
very limited life hence processing is recommended to enhance the
shelf life. Mushroom, thus has great potential for the production as
quality food. Considering the potential market opportunity of such
units, the present detail project report has been developed. The main
objective of such initiative is to productively utilize the abundantly
available resources of the local area and to enable uninterrupted
supply of the products to market throughout the year.
Name of project - Oyster mushroom cultivation and Processing unit
Type of activities. Cultivation Processing, packaging, sale of oyster
mushrooms, spawn making and training centre.

Objectives-The prime objective of the report is to present a viable

bankable model Oyster Mushroom production unit through adoption
of appropriate technology utilization offer sources and suitable market
strategy,

Location of the project -

ESTIMATED COST OF THE PROJECT

PARTICULAR AMOUNT{RS
.LACS}
Land & site devlopment OWN LAND
ON LEASE
Building & civil work 5.25

Plant & machinery 5.63

Misc.Fixed Assets 2.22

Preliminary & Pre- 1.63

Operation expanses

Contingencies%
Escalation@5% 0.66

Working Capital 1.11

TOTAL 16.50
 CHAPTER 2

VISION & MISSION STATEMENT

VISION:
"To make Mushrooms a necessity in the Fruits and vegetable basket
of every house hold in the region"

Our vision is to continuously improve our operations in order to

increase value to our customers, enhance the lives of our employees
and their families, contribute to our community, create new business
opportunities, lead our industries and, as a result, change our world.

My farm vision focuses on large scale production of different

varieties of mushroom which have high demand in market.( local
market, wholesale)

Secondly, continuously improving our operations to enhance the

livelihood of employees and the community. Furthermore, creating
new business opportunities.
MISSION:
Mushrooms is committed to providing the freshest, safest, highest-
quality mushrooms and mushroom products to our Customers and, in
turn, the consumers.
We are committed to providing our Employees with a stable and safe
workplace, as well as, benefits and opportunities that support the
employees and their families.

We support our Community by hiring employees that are good

citizens, along with supporting our local schools and community
events, clubs, and associations.

The nature of mushroom cultivation is inherently good for the

Environment. We are committed to conserving energy in our
operations and using sustainable and recyclable material methods
whenever possible
Increase the level of awareness about the Product attributes & benefit
Increase frequency of purchase.
Promote health consciousness using Mushrooms as flag association.
My farm mission will be providing fresh, safe and highest quality of
mushrooms to the market.
We support community by creating new jobs and hiring new peoples
that are good citizens and hardworking with their teamwork will lead
the farm to achieve its goal.
We will provide the employees the safest workplace.
We will be working on the awareness of maximizing the utilization of
perishable goods.
 CHAPTER 3
EMPLOYEES, MANAGEMENT TEAM & ADVISORS

Company name, they are following the two types of recruitment

process.

• Supervisors
• Employees

Recruitment process for supervisors

A candidate can enter into the company by the reference of the
existed employees. A candidate should be a degree holder and having
the knowledge.
Recruitment process for employees
A candidate should have the capacity understanding capacity to do the
work.
Training
Company name gives the training to the freshers for 10 days. During
the training period employee's won't take a leave that is they are not
permitted to take leave. The supervisor monitors the employees every
time that hoe they are working. If any issues in training period or
working time the supervisor should solve the problem.
Leave for employees
Employees can take leave with the knowledge of their supervisors. A
supervisor controls the absenteeism of employees. A management
will terminate the employees, if he/she comes under the absenteeism
list. And also the management will reduce the salary to the employees
who are take continuous leave.

Normally, an organization give the leave on festival time to the

limited employees such as Diwali, pongal, etc.
Bonus
Employees getting the bonus amount at the time of festival such as,
diwali and pongal. At the time the management adding rs. 1000 to
salary per employees working time.
Working timing
The working time to supervisor is timing 9 am to 6pm. And the
working time to employees 9.30 am to 5 pm. A supervisor should
choose the finance records and get the signature from the director of
karthika alayam then he/she can leave from the company

food facility for employees Tea and snacks provided to the employees
for free of cost twice a day
 CHAPTER-4
Company Category Private Company
Business Contents Manufacturing and delivering
mushroom
 CHAPTER-5
PRODUCTS & SERVICES

PRODUCTION TECHNOLOGY

❖ Agro-climatic Requirements

Oyster mushroom can grow at moderate temperature ranging from 20

to 30º C and humidity 55-70% for a period of 6 to 8 months in a year.
It can also be cultivated in summer months by providing the extra
humidity required for its growth. In hilly areas above 900m. (m.s.l.),
the best growing season is during March/April to September/October
and in the lower regions from September/October to March/April.
 ❖ Growing and Potential Belts

The major states in India producing this mushroom are Orissa,

Karnataka, Maharashtra, Andhra Pradesh, Madhya Pradesh, West
Bengal and most of the North Eastern hill states.

❖ Varieties Cultivated

Among all the cultivated mushrooms Pleurotus has maximum number

of commercially cultivated species suitable for round the year
cultivation. All the varieties or species of oyster mushroom are edible
except P. olearius and P. nidiformis which are poisonous. Species
commercially cultivated all over the world during summer months
includes P. flabelltus, P. sajor cajo, P. sapidus, P.membranaceous,
P.citrinopileatus. P.eous etc. and those produced during winter are
P.ostreatus, P.florida. P.cornucopice. P.fossulatus. P.eryngii etc.

Cultivation Technology
The procedure for oyster mushroom cultivation can be divided into
following four steps:
(i) Preparation or procurement
(ii) Substrate preparation
(iii) Spawning of substrate
(iv) Crop management
 ❖ Spawn preparation

A pure culture of Pleurotus sp. is needed for inoculation on sterilized

substrate. It takes 10-15 days for mycelial growth on cereal grains. It
has been reported that jowar and bajra grains are superior over wheat
grains.

❖ Substrate Preparation

Oyster mushroom can be cultivated on a large number of agro-wastes

having cellulose and lignin which helps in more enzyme production
of cellulose that is correlated with more yield. These include straw of
paddy, wheat and ragi, stalk and leaves of maize. millets and cotton,
used citronella leaf, sugarcane bagasse, saw dust, jute and cotton
waste. dehulled corncobs, pea nut shells, dried grasses, sunflower
stalks, used tea leaf waste, discarded waste paper and synthetic
compost of button mushrooms etc. It can also be cultivated by using
industrial wastes like paper mill sludges, coffee byproducts, tobacco
waste, apple pomace etc.

The popular methods of substrate preparation are:

➢ Steam Pasteurization

➢ Hot Water Treatment

 ➢ Sterile Technique (Till method)

➢ Fermentation or Composting

➢ Chemical Sterilization

❖ Spawning of Substrate

Freshly prepared (20-30 days old) grain spawn is best for spawning.
Old spawn (3-6 months) stored at room temperature (at 20-30º C)
forms a very thick mat like structure due to mycelium aggregation and
sometimes young pinheads and fruit bodies start developing in the
spawn bottle itself. The spawning should be done in a pre-fumigated
room (48hrs.with 2% formaldehyde).

Crop Management

(A) Incubation

Spawned bags, trays or boxes are arranged in a dark cropping room

on raised platforms or shelves for mycelium colonization of the
substrate. Although mycelium can grow from 10 to 33° C, but the
optimum temperature for spawn running lies between 22 to 26°C.

(B) Fruiting
B) Fruiting

When the mycelium has fully colonized the substrate, the fungus is
ready for fruiting. Contaminated bags with moulds may be discarded
while bags with patchy mycelial growth may be left for few more
days to complete mycelial growth.

While various species require different temperature regimes all

require high humidity (70-85%) during fruiting. Frequent spraying of
water is required in the cropping room depending upon the
atmospheric humidity. Fruit body produced under humid conditions
(8590%) is bigger with less dry matter while those developed at 65-
70% relative humidity are small with high dry matter.

CO2 concentration during cropping should be less than 600 ppm. or

0.6%. Sufficient ventilation has to be provided during fruiting.
Plant Protection Measures

The crop is suspect to attacks from flics (sciarid, cecid) spring tails
and mites. Tinely spraying with insect specific insecticides is needed.

• The crop is prone to fungal diseases. Several competitor moulds

e.g. Aspergillus sp., Cladosporium sp. have been and Fusarium
sp., Rhizopus sp. reported to occur in the substrate used for
 cultivation. Spraying with Bavistin or Benomyl is a
recommended control measure.

• The crop is also subject to diseases like yellow blotch, brown

spot and bacterial rot. control measures which are needed
include:

✓ Proper management of temperature and humidity during

growing period.

✓ Regular application of chlorinated water containing

100- a150 ppm of free available chlorine at an interval
of 3 - 5

✓ Application of oxytetracycline and streptocycline

Harvesting and Yield

The right shape for picking can be judged by the shape and size of the
fruit body. The fruit bodies should be harvested before spore release,
by twisting so that the stubs are not left on the beds (straw). It is
advisable to pick all the mushrooms at one time from a cube and the
next flush will appear at one time.

More than 500 kg. of fresh mushrooms per ton of dry wheat or straw
can be obtained in case of crop produced in 45-60 days.
Supply the reader with more detail about your products and services.
After reading this section the reader must have a very clear idea of
what products and services your business offers.

CHAPTER 6
MARKETING & SALES PLAN

Marketing is getting the right product to the right people, at the right
price, at the right time and in the right way. Marketing of fresh
mushrooms all over the world is not very organized except the auction
system in Netherlands. Producers make direct efforts to bring the
produce to the super markets and 'wholesale distributor' element is
mostly missing. However, trade in the processed (canned and dried) is
sizeable and organized.

Demand and Supply Patterns

White button mushrooms are grown all over the world and account
for 35-45 % of the total mushroom production. In India, large units
with production capacities between 2000 - 3000 tones / annum have
been set up mainly as export oriented units in the southern, western
and northern regions. A large number of small units without climatic
control equipment exist throughout India and function during the
autumn and winter months only. A big gap exists between the demand
and supply position of quality Oyster mushrooms in the United States
and European market. India exports the highest quantity of the
mushroom produced in the country to USA. Netherlands and China
account for 60%o of the export of mushrooms. Germany is the largest
importer and France and UK are large producers as well as
consumers. The demand for fresh mushroom is increasing in the

international market while that of preserved or canned mushrooms is

decreasing.

Analysis and Future Strategy

The industry has a comprehensive marketing and promotions

program, based on five year plans. Part time co-coordinators are
employed in each state to facilitate this program and to involve
members in promotional activities. Regular consumer surveys guide
the direction of promotion with a wide range of media being included
in The program. Advertisements are placed on TV and radio and in all
forms of print Time media. The industry has a well developed
network of food and cookery writers who support promotional efforts.

As well direct marketing has been used extensively, with

cooking demonstrations and instore activities featuring strongly in the
program. The Association's marketing program has been very
successful. This success can be attributed to careful planning and
monitoring of activities, as well as a commitment to fund the profit at
a level which will impact on consumers Value Added Commodities
As yet, growers are not particularly active in this market segment.
There are some products well established on the market, including
canned mushrooms in sauces or in brine. Some growers are packing
into 200gm pre-packs, and these are proving popular with consumers.
There have been some attempts to market a sliced mushroom pack
and this may become more common.

Market Opportunities Mushrooms are very popular in most of the

developed countries and they are becoming popular in many
developing countries like India. Applications and market for
mushrooms is growing rapidly in India because of their nice aroma
nutritious values, subtle favour and special taste. Many exotic food
preparations like soup, vegetables, pickles etc. are made from them.
They are also used for garnishing, to prepare many varieties of gravy
and for stuffing several food preparations. But they are still
considered as up-market product and their consumption is limited to
urban and semi urban areas.

Fresh mushrooms have very limited shelf life but processed and
canned mushrooms have fairly long shelf life and can be sold even at
far off places. Star hotels, exclusive restaurants, certain caterers are
the bulk consumers and a firm tie-up for regular supply with some of
them is advisable. The product can be sold even through departmental
store, super market.
 CHAPTER-7

BUSINESS OPERATIONS PLAN

POST HARVEST MANAGEMENT

Storage
(A) Short-term Storage

Fresh mushrooms are packed in perforated polythenc bags

which are directly sent to the local market situated nearby.
Freshly harvested mushrooms can be stored at low temperature
(0-5° C) for 1-2 weeks without loss in quality in case it is to be
sent to the distant markets.
(B) Long-term Storage

Dried mushroom with 2-4% moisture, can be stored for 3-4

months in scaled pouches without any change in taste. The dried
produce can be dehydrated in like warm water (4050° C) within
20-30 min giving 80-90% of original weight.

Packing and Transportation

Fresh mushrooms are packed in perforated polythene bags. Poly

pouches containing crushed ice and overwrapped in paper are
put in trays/baskets which are then covered with thin polythene
sheet with sufficient perforation for proper aeration. The pre-
packed pouches (250 or 500 g.) can be transported by roadways
in trucks, buses depending upon the quantity to be transported.

Marketing

Domestic marketing does not pose a problem at present because

only small quantities are being traded. As production develops,
marketing promotion measures will need to be undertaken to
bolster the demand.

Export potential exists and needs to be taken advantage of by

organizing cooperatives of producers linked to commercial units
for processing fresh mushroom into dehydrated powder for
export.

SWOT ANALYSIS

STRENGTHS :
• Use available resources
 • Trend in demand is upward
• Most sales are local
• Restaurant, farmer markets and on-farm outlets (venues to
market oyster mushroom

WEAKNEES:

• Limited mushroom marketing networks

• Limited brand name recognition
• Limited pre-existing speciality mushroom farms

OPPORTUNITIES:

• Ability to develop a specific marketing strategy

• Growing market for value added products
• Growing pharmaceuticals market

.COMPETITIONS:

• Consolidation in produce retail

• Loyalties to existing distribution channels
 CHAPTER 8
FINANCIAL PLANS & STATEMENTS FINANCIAL
ANALYSIS
COST OF PRODUCTION

The cost of production has been estimated annually for the first five
years of operation. The various cost components taken into account
are cost of administrative expenses, consumable stores, utilities,
wages and salaries, repairs and maintenance, insurance, interest rates,
taxes etc. depreciation.
REPAIR & MAINTENANCE

Cost under Repair and Maintenance expenses have been assessed by

charging 1% on Land & Building, 2% on Machinaries and 1.5% on
Fixed Assets on first year with increase of 2% on subsequent years.

ADMINISTRATIVE EXPENSES

This has been considered in the cost and profitability statement

under other expenses.

SELLING EXPENSES
This has been considered in the cost and profitability statement
under other expenses, etc
DEPRECIATION:
In calculating the cost of operation, depreciation has been
calculated under straight line method after absorbing the pre-operative
and contingencies expenses.
FINANCIAL CHARES:
The interest on proposed term loan amount of Rs. 9.90 Lakh has been
calculated 8% being the rate of interest. The interest calculation for
various years after considering the repayments due in respective
years.

SALES REALISATION

Based on 70% capacity utilization, total turnover is estimated at Rs.

54.60 Lakh on third year, the sale for other years are estimated at
different capacity utilization.

NET PROFIT

The proposed project is expected to generate profit from the first year
of operation itself and will gradually increase with increase in
capacity utilization.

INTERNAL ACCRUALS
The net profit after tax with depreciation added back would make up
sufficient internal accruals to meet the term loan, working capital loan
repayment obligations without any liquidity problems.

FINANCIAL ANALYSIS
The break-even point of the proposed project is 48.67%at 70%
operating capacity on third year. The DSCR of the project has been
worked out with an average of 1:2.18, which is considered quite
satisfactory to meet the repayment and interest obligations in respect
of the term loan. The internal rate of return of the project works Jout
to 21.00 %, which is satisfactory. Counter
Projected income statement :
1stqtr 2nd qtr 3rd qtr 4th qtr 5th qtr
Gross sales 40000 50000 80000 75000 245000

Less: cost 13000 28000 53000 37000 131000

of goods
sold
Gross 7000 22000 37000 28000 94000
profit

Expenses
Advertising 600 1800 2400 1200 6000
Credit card 150 400 700 450 1700
service
charges

Depreciation 450 450 450 450 1800

Dues & 250 250 250 250 1000
Subscriptions
Insurance 200 200 200 200 800
Interest 1800 1800 1800 1800 7200
Maintenance 125 125 125 125 500
And repair
Postage and 500 500 500 500 2000
suppliers
Professional 300 800 600 300 2000
Services
Rent 4050 4050 4050 4050 16200
Salaries/wages 1100 5500 6600
Employees
Taxes 120 730 850
Telephone 300 300 300 300 1200
Travel and 2500 500 500 500 4000
Entertainment
Utilities 225 240 255 225 945
Other 350 350 350 350 1400
Operating
expenses

BALANCE SHEET:
Assets Amount Liabilities Amount
Current assets Current
Liabilities
cash 237890 Accounts 26540
payable
Inventory 28617 Current 2000
borrowing
Other current Other current 2000
Asset liabilities
Total current 266507
assets
Long term 0 Subtotal 28540
assets Current
liabilities
Accumulated 0 Long term 6800
liabilities
Depreciation 0 Total liabilities 35340
Total long term 0 Paid in capital 5100
assets

Retained 115455
earning
Earnings 110612
Total capital 231167
Total assets 266507 Total liabilities 266507
And capital