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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 invitamins like B.C, D, K and minerals like calcium, phosphorous, potassium, iron, copper and highfibre 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, heartailments, hypertension and anemia.The Product:Mushroom have been considered as a delicacy the world over. The oyster mushroom (pleurotus)which is mostly cultivated and marketed in the North East. Oyster mushrooms are easier to growand less cumbersome to process. The climatic conditions in the North East is favorable for itsgrowth. The product is available mainly in two forms i.e. fresh and dried. The proposed unit canwould sell 2000 kgs of fresh mushroom and 3000 kg as dried mushroom.Market Potential:The North Eastern Region including Sikkim has a good market for mushrooms. Apart from

domestic consumption, the hotels, resorts which are coming up in a big way in the region arepotential buyers of the product.Plant Capacity:

Working Days/Year : 300 Annual production : 2000 kg of fresh mushroom &

3000 kg of dry mushroomRaw Materials:

Qty. Amount (Rs)Paddy straw 150 qtls @ Rs 1000/qtl. 1,50,000Spawn 25,000 @ Rs 10/- 2,50,000Saw dust 40 qtl. @ Rs 100/- 4,000Wheat flour 25 qtl @ Rs 1200/- 30,000Quick lime 20 qtls. @ Rs 150/- 3,000Packing material L.S. 9,000

Rs. 4,46,000=======

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. Separation of mushroom for drying. Packing of fresh mushroom for marketing. Drying of mushrooms. Packing of dried mushrooms. Marketing.

Machinery:Sl.No. Items Value (Rs)1. Dryer - 1 No. @ Rs 30,000 30,0002. Big drum - 4 Nos. @ Rs 7,000/- 28,0003. Trays 50 Nos. @ Rs 500/- 25,0004. Shaft cutter 3 Nos. @ Rs 5000/- 15,0005. Poly sheet 3000 Mtrs. @ Rs 20/- 60,000

6. Sprayers, thermometer, boards 4 Nos. 8,000Total 1,75,000

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Location:Urban and semi-urban areas in NER including sikkim preferably near to the market area wherecultivation is possible and consumers are suitably located nearby so that fresh mushroom fromthe unit can be easily marketed.

Total Capital Requirement:The total capital requirement including fixed capital and working capital is estimated at Rs5,46,380 as follows. Of this, the project cost comprising fixed capital and margin money onworking capital is Rs 4,64,233 lakhs.

A. Fixed Capital: (Rs in lakh )Land OwnSite development 25,000Building (750 sq.ft.) 2,00,000Machinery 1,75,000Miscellaneous fixed assets 30,000Preliminary and pre-operative expenses _15,000

Total (A) 4,20,000=======

B. Workin g Capital:Raw materials & Packing material 15 days 22,300Finished goods 15 days 34,800Working expenses 1 month 10,280Receivables 15 days 59,000

Total (B) 1,26,380======

Total (A)+(B) 5,46,380Note: Working capital may be financed as:

Bank Finance (65%) .. Rs 82,147Margin Money (35%) .. Rs 44.233

Rs 1.26.380========

Capital Cost of Project:

Fixed capital : 4,20,000Margin Money for Working Capital : 44,233

4,64,233Means of Finance:

Promoters contribution (35%) Rs 1,62,482Term Loan (65%) Rs 3,01,751

Rs 4,64,233==========

Operating Expenses:The annual operating expenses are estimated at Rs 7,07,700 as given below:

(Rs in lakhs)1. Raw materials: 4,37,0002. Packing materials 9,0003. Utilities 15,3604. Wages & Salaries 1,08,0005. Other overheads 12,0006. Selling expenses @ 5% on annual sales 59,0007. Interest on term loan@ 13.25% 39,9828. Interest on Bank Finance for

Working Capital@12% 9,8589. Depreciation @10% __ 17,500

7,07,700=======

Operating pro fit 4,72,300

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Sales Realization :Sl.No. Particulars Qty. Rate (Rs) Value (Rs)1. Fresh Mushroom 2000 Kg. 140/- 2,80,000

2. Dry Mushroom 3000 Kg. 300/- 9,00,000

TOTAL 11,80,000

Profitability :Based on the sales realization of Rs 11.80,000 and the operating expenses, the profitwould be Rs 4,72,300 per year. This works out to a return on investment of 86%. The plant willbreak even at 19% of the rated capacity.Highlight:The major highlights of the project are as follows:

Total capital requirement : Rs 5,46,380Promoters contribution : Rs 1,62,482

Annual sales realization (70% cap.) : Rs 11,80,000 Annual operating expenses (70% cap.) : Rs 7,07,700 Annual profit (pre-tax) : Rs 4,72,300

Pre-tax Return on Sales : 40%Break Even Point : 19%No.of persons employed : 5

Suppliers of MachineryList of Machinery Suppliers: List of Raw Materials Suppliers:

1. M/s B. Sen & Berry & Co.65/11, Rothak Road,Karol Bagh,New Delhi 110 005

1. State Institute of Rural Development (SIRD)Jorabat, Guwahati

2. M/s Narag CorporationP-25 Connaught PlaceBelow Madrass Hotel,New Delhi 110 001

2. Shanti Sadhana AsharamBasistha, Guwahati

3. M/s Gardeners Corporations6, Doctor Lane,Post Box No. 229New Delhi 110 001

3. Regional Research Laboratory,Jorhat.

4. M/s K.S.J. Foods & Service (P) Ltd.7/87, Vishnu Prasad Mehant Road,Vile Parle,Mumbai 400 057