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. ..A BAI\TKABLE PROJECT REPORT ON COMMERCIAL CULTIVATION


OF OYSTER MUSHROOM''

'
.A Projed Rqort Prqued By;

I SproutConsultancy
Services,
Pune.
I S..No. 8l/lB, ClaihabanSciety, NewSangvi,Prma-4llf2lr'
I Web:www.sproutindiaia E-mait inf@spratrindiain,
I PH: (020) +91
2728r2s9.I\,t 96iR26l0l0l+919y/3$nrc

A Projed Rqoa Prqaredfor;

29fl, RadhikaNagar,
) Bhilai, Chhdisgarh.
t Proprietoc Deye$ Moge.
.-4t-

,)
Sprout Consultingthe prcjcct report under the scheme
3 of 'Nationsl Eorlislture MissionD(NEM) supported by
'g "Plantation Infrtstrtdue Deeloprcnt? component

0 Datez24NIay2012
3
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fGranAgro Pa*" Bhilel, Chhattisgafi
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ANNEXURE trl
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ii)
)
TITLE PAGE Nd.
)
. 1. ApplicationtoNHM. t
)
of projectbasedproposalby
sectorFormatfor submission
2 . Private
)
privateentrepreneursunderNHM . 2
)
of promoters.
) 3. Briefbackground
1

I q. Management. 4B
)
5 . D a t eo f i n c o r p o r a t i o na n d r e l a v a n tl a w . 49
)
1 6 . D e t a i lo f c o s t o f p l a n t & m a c h i n e r y/ e q u i p m e n t s u p p o r t e db y
- pluotErtion. 50
\J
l and costduly 55 certified.
of the Buildingconstruction
7. Details
t of raw materialnameof the clusteranddistrictto be
8. Availability
' 60
covered.
t
3 linkagewith farmers.
9. Background 6t
, 10.Forwardlinkage,tieup madefor sale. 62
.
i tt. swor Analysis 63
3
letterDPRassubmittedto
reportcopyof sanction
3 12.Bankappraisal
3;*rank. 64
r.U13.lmplementationschedule 47
t
)

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TABLE OF CONTENT

CHAPTERNO. TITLE PAGE NO.


fr
I EXECUTIVE SUMMARY )

l.l OBJECTIVE 6
B
;
2 PROJECTPROFILEOF KIRAN AGRO FARM 7

J INTRODUCTION I

4 BACKGROUND ll

NUTRITIVE VALUE OF MUSHROOM t4

6 MARKET ANALYSIS AND STRATEGY IB

6.1 Production& Market Status l8


I
A Global Scenario l8
I
'l
B National Scenario 22
I

6.2 Demandand Supply patterns 23

6.3 Trendsof Mushroom


Export/Import 24
I
\
6.4 AnalysisAnd FutureStratery 26
I
\
7 PRODUCTIONTECHNOLOGY 28
t,.
8 POSTHARVESTMANAGEMENT 3l
I

8.1 Storage 3l
t
8.2 Packaging& Transportation 3l
t
)
8.3 Marketing 3l

9 FORTECHNOLOGY
SOURCES 32
f)

l0 ECONOMICSOFTHE PROJECT JJ
l
t,
t
t

I
KiranAgro Park, Bhilai, Chhattisgarh
I
)
)
I

l
LIST OF TABLES
I

TABLE NO TITLE PAGENO.


)

)
I ProjectProfile of Kiran Agro park
j
)
) World Productionof Mushroom(Metric Tons)
l l9

)
3 Importercourfriesof Mushnoom 24
a

) 4 25
QuantityAnd ValueOf FreshMushrooms
Country-Wise
ExportedFromIndiaDuring2007-2010
)

)' ) 5 Country-wise quantity and value of preserved/dried


Mushrooms exported from India during 2007 -2010 25
t
t
t
LIST OFCHARTS:
)
:
CHART NO TITLE PAGE NO.
)

), I World Production of Mushroom (Metric Tons) 20


),

)
LIST OFFIGIJRES:
,,
FIGI'RE TITLE PAGENO.
t
J\

J'j I Spawn Production Process l3

))

t, 2 Nutritive Valueof Mushroom l5

t,
li
)

)
Kiran Agro Park, Bhilai, Chhattisgarh
't\
JJ

JJ
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al ANNEXURE:

rl I AI\NEXIJRE NO TITLE PAGENO.


)l I ESTIMATEDPROJECTCOST 34
)
2 INTERNAL RATE OF RETURN 36
)
3 BENEFIT COSTRATIO & NET PRESENTVALUE 36
t
j 4 PAY BACK PERIOD 37

3 5 BREAK EVEN ANALYSIS 37


a 6 DEBTSERVTCE RATrO(DSCR)
COVERAGE 38
I
7 PROJECTEDPROFIT& LOSSACCOI.JNT 39
!
I 8 SCIIEDULESTO PROFIT& LOSSACCOUNT 40

b'
i.
9 PROJECTEDBALANCE S}IEET 42

l l0 FD(ED ASSETS& DEPRECIATIONSCMDULE 43


I
t, ll TERM LOAN REPAYMENT SC}IEDI.JLE 44

?
* t2 CASHFLOW STATEMENT
PROJECTED 45
f')
P l3 FINA}{CIAL BENCHMARKS_ RATIO ANALYSIS 46

? l4 PROJECTIMPLEMENTATION SCTIEDULE 47

F
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# Kiran Agro Park, Bhilai, Chhattisgarh

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TrN NO. 22443304530 13 0788-2290179
d,i PH. 98269-44944
Kiram ro Park 93298-44944

29/7, Radhika Nagar,Towards Nehru Nagar to Kosa Nala Bridge, Bhilai {e.G.)

Ref. No. Date

I' To,
T TheDeputyDirector,
t NationalHorticultureMission
T Distt.- Durg(C.G.)
I

I
Sub.: To submittingprojectreportfor subsidyunderNHM.

I
DearSir,
l
I amgoingto starttheprojectfor OyesterMushroomCultivation,Spawn
I
& TrainingCentreat Shivpuri(JAMUL),Bhilai, Distt. - Durg.Wewill produce
I
theOyesterMushroom100kg-l25kgperday.Approx,givingtrainingto women
& farmersin our Districtsvillages& to makeavailablespawnin low cost.The
totalcostof ourprojectis Rs.50,59,482.00.
I am applyingfor subsidyasunder.NHMguidelineswhich is 50%of
t\ totalprojectcostor maximumRs.25,00,0001- for privatesector.
Sopleaseprovideme subsidyunderNHM.

Thanks

Enclose-
Yoursfaithfully,
I. DPR
2 . C ertificate of Registration
3. Plant& MachineryQuotation
Devesh Mogre
4. Estimatefor Building & Civil works
5. Bank appraisal& sanctionletter.
IflRAHAGRoFAltS.
L]

J PRIVATE
SECTOR
tt FORSUBMISSION
FORMAT OFPOJECTBASEDPROPOSALS
BY
ENTREPRENEURS
PRIVATE UNDERNHM
J

I 1. Nameof project - Oystermushroom cultivation


and
.
Processing
unit.
*
2. Typeof activities - Cultivation, packaging,
Processing, saleof
F
oystermushrooms,spawnmakingand
t
training
centre.
!

3. Objectives - Theprimeobjective of thereportisto present


I
a viablebankable modelOysterMushroom
F productionunitthroughadoption of appropri
a' atetechnology, utilization
of resourcesand
suitablemarketstrategy.
!:
F of the project
4. Location - Village- Shivpuri(Jamul),
Bhilai,Chhattisgarh.
I withaddress- (Thelocation of theprojectis at generalarea)
t 5. Dateof incorporation - firmnamedKIRANAGRO
Proprietorship
I andrelevantlaw PARK, Proprietor DeveshMogre,
no.22443304530,
Registration
3
Validfrom17-May-2012. PageNo.49
)?

6. Management - Pageno.48
)

)
of Promoters Pageno.7
7. Briefbackground
)"

) 8. Costof project--- in Rs.


(a) Land 998179.00
(b) Buitding 1525000.00
)
(c) PlantandMachinerY 1114000.00
)
(d) Contingencies nil
,
(e) Miscellaneousfixedassets 183830.00
)
(f) Workingcapitalmargin 479000.00
Ji
(g) PreoperativeexP. 727807.5
\
GrandTotal 5027816.5
\

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) 10, Meansof finance in Rs.


)
(a) PromoterShare 2552000.00
I
(b) Banktermloan 2473000.00
)
(c) Subsidy 2500000.00
(d) Quasiequity nit
) (e) Unsecuredloan nil
)
Total 7525000.00

) 11. Detailof costof PlantandMachinery/equipment by quotations.Page50-54


supported
)
andthecostdulycertified.
construction
12. Detailof theBuilding Page55-59
)
of rawmaterial,nameof theclusterand Districtalongwith.
19. Availability Page60
)

) 14. Backwardlinkages to eitherproviding


withfarmerswithreference servicesor
)
of rowmateria.
purchase Page 61

) linkage- Analysisof domesticandexportmarkets,tie up made


1 5 . Fonrvard
)
forsaleof Produceand brandingaspect. Page 62

) - morethan25 farmers.
1 6 . No.of farmersto be benefited
)
1 7 . SWOTAnalysis. Page63
r)
- IRR,NPVBenefitcostratio,BEP,DSCR,Projected
Analysis
1 8 . Financial
)
balancesheetetc . Page36-42
)
1 9 . Nameof the sponsoring bankalongwiththe detailof Techno- economical report
appraisal
)
(DPR)
,copyof sanctiontetterand DetailProjectReport as to
submitted bank.
) Page64-85
)
20. Socialbenefitswithreferenceto employment generation.
) (a) DirectemploYment :- 7 workers
(b) employment
Indirect :- morethan20 .
)
(c) Women:- 4 .
)
to itscapacityto generate
of the projectwithspecialreference
2 1 . Detailof the sustainability
, Page 43.45
incomesinceonlyonetimegrantis admissible.
)
schedule.
22. Implementation Page 47

) sought.Rs.2500000.
23. Amountof subsidy

)
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) CHAPTER 1: EXECUTM SUMMARY

) The global food and nutritional security of growing population is a great challenge,which looks
for new crop as sourceof food and nutrition. In this context, mushroomsfind a favor which can
) be grown even by landless people, that too on waste material and could be a source for
) proteineousfood. Use of mushroomsas food and neutraceuticalhave been known since time
immemorial,as is evident from the descriptionin old epicsVedasand Bible.
t
Earlier civilizations had also valuedmushroomsfor delicacyand therapeuticvalue. In the present
) time, it is well recognizedthat mushroomis not only rich in protein, but also containsvitamins
) and minerals,whereas,it lacks cholesteroland has low calories. Furthermore,it also has high
medicinal athibutes like immunomodulating, antiviral, antitumor, antioxidants and
) hepatoprotective properties. With the growing awareness for nutritive and quality food by
growing heahh conscious population, the demand for food including mushrooms is quickly
)
rising and will continue to rise with increasein global population which will be 8.3 million by
, 2025 andexpandableincome. The mushroomcultivation has grown up in almost all the parts of
3 the world and during last three decades,the world mushroomproduction achievedthe growth
rateof about l0ol0.
3
Globally, China is the leading producer of mushroomswith more than 70% of the iotal global
) productiou which is attributed to community, based farming as well as diversification of
3 mushrooms.In Indi4 owing to varied agro-climateand abundanceof farm waste, different types
of temperate,tropical and subtropical mushroomsare cuhivated throughout the country. It is
) estimatedthat India is generating 600 million MT of agricuhural waste besides, fruit and
3 vegetableresidue, coir dust, husk, dried leaves,prunnings, coffee husk, tea waste which has
potentialto be recycled as substratefor mushroomprodtrctionleadingto nutritious food as well
a asorganicmanurefor crops.
) Mushroomproduction being an indoor activity, labour intensiveand high profit venture provides
) ample opportunities for gainful employment of small, farmers, landlesslaborers, women and
unemployed youth. Therefore, promotion of mushroom cultivation shall a step to meet
3 nutritional needsto reducemalnutritionand providing livelihood to landlesspoor.
J Mushroom cultivation in India is of recent origin and it was in the 196l when ICAR funded a
J schemeon button mushroomcultivation technology at Solan which led to the establishmentof a
LJNDP project with FAO experts. The pioneering research work of the FIPKVV at their
) Agriculture College campusat Chambaghat,Solan laid a firm foundationfor mushroomresearch
nt in the country. National Centre for Mushroom Research& Training was establishedin 1983 at
the sameplace under the aegis of ICAR that was later renamedas National ResearchCentre in
t
1997 and upgradedto Directorateof Mushroom Researchin December2008. Number of other
) institutions and StateAgricuhural Universities have since undertakenR&D activities in button

l KiranAgro Park, Bhilai, Chhattisgarh

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and various other mushroomsand the mushroomproduction in the Country has progressedfrom
t mere5000tons in 1990to morethan I lakh ton in 2010.
,
The presentreport is an effort to pool the information of cultivation, marketingand utilization of
t commerciallygrown mushrooms.The report encompasses all the aspectsof various commercial
mushroomsfrom culture maintenance to processingand marketing. The aspectof diversification
t in mushroom production, so important for India, has been adequatelyaddressed.Engineering
t aspectsof farm-design,machinery,etc in mushroomproduction, economics,cooking have also
found due importance.This also provides insights about button mushroomindustry to client and
t otherpeopleto get going in the field and servenation giving quality.
,
We really appreciate the efforts and enterprise selection by our client Kiran Agro Park, Bhilai,
"t
Chhattisgarh in bninging out commercialcultivation of Oyster mushroom,which is one of the
i
fastestgrowing enterprisesin the agricultureindustry.
,
Mushroomproduction being an indoor activity, labour intensiveand high profit ventureprovides,
I
ample opportunities for gainful employment of small, farmers, landless laborers, women and
'Therefore,
I unemployed youth. promotion of mushroom cultivation shall a step to meet
nutritional needs to reduce malnutrition and providing livelihood to landless poor. By
t understandingthe processand mechanismtoday Kiran Agro Park quoting a very good example
I in fiont of nation which helps many families to earn their livelihood and creating next
: I
generationsmore heafthy.
I
To conclude,as a livelihood diversificationoption, mushroomcultivation hasenormouspotential
{ to improve food security and income generation,which in turn can help boost rural and peri-
I urban economic growth and enhancean individual's and a community's capacity to act upon

s othereconomicopportunities.

s, Kiran Agro Psk hasproposedto establishMushroom Cultivation & ProcessingUnit at Bhilai.


This unit would not only facilitate the unemployed youth in earning their livelihood, but the
a populaceof "steel city''would also get mushroomsof good quality.

,g The activities of Kiran Agro Park will contribute greatly to the overall development of the
a locality in terms of employment generation, improved standardof living, eco-friendly waste
disposal,nutritional & medicinalvalue addition and equitablelivelihood opportunities.
P
fl
'F OBJECTTVE

The Prime objectiveof the report is to presenta viable bankablemodel OysterMushroom


3 technology,utilizationof resources
productionunit throughadoptionof appropriate andsuitable
e marketstrategy.

*
g
KiranAgro Park, Bhilai, Chhattisgarh
t
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) CHAPTER2: PROJECTPROFILE OF KIRAN AGRO PARK

) A
I Name& Address Kiran Agro Park,
)
2917,RadhrkaNagar,Supel4
) Bhilai-490023(Chhattisgarh)

t 2 ProprietorName Mr. DeveshMogre


I 3 Education M.Corq LLB, MBA
l 4 Experience 7 yearsexperienceas life and generalinsuranceagent
I vear experienceof ovster mushroomcultivation
)
A
litri
T I MushroomCuhivation& Processing
Name ofthe Project Oya5l117. Unit
I 2 Location of the Project Bhilai,Chhattisgarh
. Villqc -fifu'rpari CJanuI )
t J StrategicAdvantagesof
ProjectLocation
l. RoadLinkage:-ThePlantis locatedabout25
kilometersfromthecapitalof Chhattisgarh - Raipur,on
) themainHowrah-Mumbai rail line,andNational
I
Highway6
)') 2 . Population:- 625,697in 201I
l 3 . Effectiveliteracyrater 87Yoin 201I
II 4. Climate:-
a. Mild in thewinter(minimumtemperature l0 "C)
t b. Mediumrainsin the monsoonseason
) c. Thesummers areveryhot anddry, with maximum
'":; tempefature
45 oCandmaximumhumidity
) 4 Land Area 7000 Sq. Ft. (ProjectArea: 4400 Sq. Ft.)
1._
)I ) ProposedEconomic Cuhivatioq Processing,Packaging& Saleof Oyster
) Activities of the Project Mushrooms-,Spo*-r. H<h'*d. * Tzre.;ru.\
)
6 ProductionCapacity Dry Oyster Mushroom- 12 Kgs per day (from FreshOyster
Mushroom- 120Kgs per day)
)
7 OperationalPeriod per year 7 Mushroomlife cycles(i.e. 315 days)
a
J
l is t(^ Qenuz.Lflr*
)
)
)

)
KiranAgroPark,Bhilai,Chhattisgarh
).

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3 CIIAPTER 3: INTRODUCTION

) Indian agricuhure will continue to be a main strengthof Indian economy. With the variety of
agricufturalcrops grown today, we have achievedfood securityby producingover 200 million
I tons of food grain. However, our struggleto achievenutritional security is still on. Though we
I have significant achievementsin milk, vegetablesand fruit production still we have to do more.
In future, the eyer-increasing population" depleting agricultural land, changes in environment,
t water shortageand need for quality food productsat competitiverates are going to be important
issues.To meet thesechallengesand to provide food and nutritional security to our people,it is
,
important to diversifr the agricultural activities in areaslike horticuhure.
I
Diversification in any farming system imparts sustainability. Mushrooms are one such
I component that not only impart diversification but also help in addressingthe problems of
qualrty food, health and environment related issues. One of the major areas that can confiibute
t towardsgoal of conservationof naturalresourcesas well as increasedproductivity is recycling of
t agro-wastesincluding agro-industrial waste. Utilizing these wastes for growing mushrooms can
enhanceincome and impart higher level of sustainability.
,

t Commercial production of edible mushrooms bio converts the agricultural, industrial, forestry
and household wastes into nutritious food (mushrooms). Indoor cuhivation of mushrooms
) utilizes the vertical spaceand is regardedas the highest protein producer per unit area and time-
almost 100 times more than the conventional agriculture and animal husbandry.This hi-tech
)
horticulturp venture has a promising scopeto meet the food shortageswithout undue pressureon
) land.

) Mushroom farming today is being practiced in more than 100 countries and its production is
)
) increasingat an annual rate of 6-70/o.In some developedcountries of Europe and Americ4
mushroom farming has attained the stdus of a high-iech industry with very high levels of
I mechanizationand automation. Presentworld production of mushroomsis around 3.5 million
n tones as per FAO Stat and is over 25 million tonnes (estimated) as per claims of Chinese
) AssociationofEdible Fungi. The wide variation in world productiondata in FAO Stat and CAEF
) is partly due to the fact that in FAO Stat, mushroommeansbutton mushroom(Agaricus spp.)
along with the boletes,morels and tuber, whereasCAEF data covers all types of mushrooms.
) China alone is reportedto grow more than 20 different tlpes of mushroomat commercialscale
), and mushroomcultivation hasbecomeChina's sixth largestindustry.

) Presently, three geographical regions- Europe, America and East Asia contribute to about 960lo
of world mushroomproduction.With the rise in the income level, the demandfor mushroomsis
)
-) bound to increase in other parts of the world as well. China has been producing mushrooms at
very low costs with the help of seasonalgrowing, state subsidiesand capturing the potential
;
markets in the world with processedmushrooms at costs not remunerativeto the growers in other
mushroomproducingcountries.

Kiran Agro Parlg Bhilai, Chhattisgarh


India producesabout 600 million tonnesof agriculturalwaste per annumand a major part of it is
left out to decomposenaturally or burnt in situ. This can effectively be utilized to producehighly
nutritive food such as mushroomsand spent mushroomsubstratecan be convertedinto organic
manure/vermi-compost.Mushroomsare grown seasonallyas well as in state-of-artenvironm.gnt
controlled cropping rooms all the year round in the commercial units. Mushroom growing ii a
highly labour-orientedventure and labour availability is no constraint in the country and two
factors,that is, availabilities of raw materialsand labour make mushroomgrowing economically
profitable in India. Moreover, scope for intense diversification by cultivation of other edible
mushroomslike oyster, shiitake, milky and medicinal mushroomsare additional opportunities
for Indian growers.

In spite of predominantly tropical and subtropical climates in India, it is the temperatebutton


mushroom that has ruled and is still dominant in the mushroom scenario of the c.ountry.Taking a
clue from China" it is the tropical and sub-tropical mushrooms,which should be promoted in a
big way, both with the producersand consumers.A beginning has already been made with the
popularization of the oyster and milky mushrooms in South India. People do develop the taste as
per the available commodity it is a universal phenomenon.At times, we take th_esheherof no
demandto justifr almost negligible diversification in the mushroom production in India.

However,the challengesand opportunitiesthrown by this unconventionalcrop are a bit different


particularly with reference to India. Today India is not only self-sufficient in the production of
food grains,but is also in a position to export severalagricuhural oommodities.But mushroom
scenario in India is not that rosy. The cuhivation of white button mushroom - Agaricus bisporus
has come a long way of evolution and advancementin technolory. Still all stagesof evolution of
cuhivation technology can be seen. There are farmers still growing mushroom on compost
prepared by long method and there are commercial units that have shifted to bunkers or almost
indoor compostingtechnology.

In younger mushrooms the pileus and stipe are connectedby a membranousstructure known as
veil or veilum. It is broken at maturity. In younger stages,the fruiting body of Agaricus
resemblesa button. Hence this stage is refened as Button stage. Usually its basidiocarpsare
t harvestedat this button stage. The other fleshy fungus of Ascomycotina known as Morchella
t producessporesinside a sac like structure.

) In spite of some articles that say mushroomscan be grown in any dark hole or building,
successfulcommercial mushroom growing requires special houses equipped with ventilation
) systems. While mushrooms are usually grown in the absence of light, darkness is not a
) requirement.Mushroomshave been grown in unusedcoal and limestone mines, old breweries,
basementsof apartment houses, natural and man-made caves, rhubarb sheds, and many other
t unusual structures. Mushrooms were reportedly grown in an old dairy barn, which was so damp
t that cows living in it haddied of pneumonia.

t
t
KiranAgroPark,Bhilai,Chhattisgarh
1

J
10

In 1894,the fnst structurespecifically designedto grow mushroomswas built in ChesterCounty,


Pennsylvania"which is usually referred to as the mushroom capital of the world. Growing
mushroomsis a waste recycling activity. Mushroom farms benefit the environment by using
many tons of mulch hay, straw beddedhorse manure,and poultry manure.These productsare
consideredagricufturalwaste products and would not have a home if it were not for mushroom
): production.Mushroom production is both an art and a sciencewith many complex and distinct
stages.
|:

ft Mushroom cultivation is a labor intensivejob and in the recent past many large farms had to
abandon their operations in Europe and America due to very high labour cost. Comptete
E mechanizationof a farm where labour requirementwill be less is a very high capital investment
tl proposition making this activity uneconomical and uncompetitive. In India where labour is
cheap,coupledwith plentiful supply of agro wastesand requisitetemperaturemake this activity
! more attractive and most economical.In view of this many big units have come up in India
cultivating white button mushroom,most of their produceis exported to America and European
b
countriesearningpreciousforeign exchange.
li
In order this effort going commercial mushroom cuhivation, Oyster Mushroom is great
! movement for Kiran Agro Park to grow along with existing mushroom facility and contribute
! towards the growth ofthe Indian economy.

t A model schemefor cultivation of Oyster mushroom(Pleurotusspp.) with commercial viability


and bankabilrtyhas been preparedkeepingin view the agro-climatic conditionsand other related
!
aspectsfor successfulcultivation of the mushroom and its subsequentmarketing. Cultivation of
I mushroom can be taken up on a large scale by individual entrepreneurs.The agro-climatic
! conditions as well as local availability of raw material make mushroom cultivation an
economicallyviable proposition.
)
'white vegetables'or 'bonelessvegetarianmeat' containample amounts
Mushrooms,also called
I
of proteins, vitamins and fiber apart from having certain medicinal properties. Mushroom
t contains20-35o/oprotein (dry weight) which is higher than those of vegetablesand fruits'and is
of superior qualiry. Mushrooms are now getting significant importancedue to their nutritional
'
and medicinal value and today their cuhivation is being done in about 100 countries.At present
t world production is estimatedto be around 5 million tonnesand is ever increasing.Though 20
t mushroomvarieties are domesticatedabout half a dozen varieties viz; button, shitake, oyster,
wood ear and paddy straw mushroomscontribute99Yo ofthe total world production.
l
Mushroom offers prospects for converting lignocelluloses residues from agricultural fields,
t forestsinto protein rich biomass.Suchprocessingof agro waste not only reducesenvironmental
l. pollution but the byproduct of musluoom cultivation is also a good sourceof manure, animal
feedand soil conditioner.
,

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KiranAgroPark,Bhilai,Chhattisgarh
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11

CHAPTER 4: BACKGROUND

1. Origin:

Mushroomsare the plant of immortality - that's what ancientEgyptiansbelievedaccordingto the


Hieroglyphicsof 4600 BC. The delicious flavor of mushroomsintrigued the pharaohsof Egypt
so much that they decreed mushrooms as food for royalty. In various other civilizations
throughoutthe world, including Russia,China Greece,Mexico and Latin America, mushroom
rituals were practiced.Many believed that mushroomshad propertiesthat could producesuper-
human strength; help in fmding lost objects and lead the soul to the realm of the gods. The oldest
representation, which suggeststhe possibility that mushroomsmay have been usedritualistically
are the Tasili Cave paintings in Northern Algeria where zoomorphic figures whose bodies are
adorned with drawings of.what macroscopicallyappear to be mushrooms are found. These
drawingshavebeendatedfrom at least9000 BP.

The Chinesewere the fnst to artificially cuhivate the tropical and subtropicalmushroomsabout
thousandsyear back (Auricularia polytrbha in 600 AD; Flammulina velutips in 800 AD; and
Lentinula edodes in 1000 AD) but real commerciat venttires started when Europeansstarted
cuhivation of button mushroomin cavesduring 16ft and lTth centuries.In the late lgth century,
mushroom production made its way acrossthe Atlantic to the United Stateswhere curious home
gardenersin the East tried their luck at growing this new and unknown crop. Th" f",$ producer
of pure culture virgin spawn was the American SpawnCompany of St. Paul Minnesota,headed
by louis F. Lambert, a French mycologist at the beginningof 2fth Century.By 1914,mushroom
marketing began to play a much greater role in the industry. In the beginning button mushroom
dominated the world scenario and even upto 1979 it contributed 70 percent of the world
muslnoom production. Since then number of other mushroomshave been commercializedand
by 1997 the share of button mushroom fell down to 32 percent and mushroomslike shiitake,
oyster mushroorn,paddy straw mushroorn"wood ear muihroom, etc started gaining popularity.

Mushroom cuftivation in India is of recent origin and it was in the 1961 when ICAR funded a
schemeon button mushroomcultivation technologyat Solanwhich led to the establishmentof a
LJNDP project with FAO experts. The pioneering research work of the HPKVV at th'eir
Agricufture College campusat Chambaghat,Solan laid a firm foundation for mushroomresearch
in the country. National Centre for Mushroom Research& Training was establishedin 1983 at
the sameplace under the aegis of ICAR that was later renamedas National ResearchCentre in
1997 andupgradedto Directorate of Mushroom Researchin December2008. Number of other
institutions and State Agricultural Universities have since undertaken R&D activities in button
and various other mushroomsand the mushroomproduction in the Country has progressedfrom
mere 5000 tons in 1990 to more than I lakh ton in 2010. Diversification in any farming system
imparts sustainability.Mushrooms are one such componentthat not only impart diversification
but also help in addressingthe problemsof quality foo4 health and environmentalrelatedissues.
Commercial production of edible mushroomsrepresentsunique exploitation of the microbial

Kiran Agro Park, Bhilai, Chhattisgarh


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technology for the bioconversion of the agricultural, industrial, forestry and householdwastes
into nutritious food (mushrooms).Indoor cultivation of mushrooms,utilizing the vertical space,
) is regarded as the highest protein producer per unit area and time. This hi-tech horticulture
venturehas a promising scopeto meet the food shortages,without undue pressureon land. For
)
the people of a developing country like India, the two main issues are the quality food and
) unemploymentbesidesthe environmentalissuesandtheseissuescan be resolvedby popularizing
mushroomcultivation amongst the rural Inassesand the young generation.
,
2. Botanical Description:
t
) Mushrooms are primitive organisms known as fungi. The organism lack chlorophyll which
I synthesizefood in higher plants in presenceof sunlight. They do not possessthis greencolour
substanceso they cannot preparetheir own food. They grow saprophytically on dead organic
t matters or other living organisms. Mushrooms ane fruit bodies or reproductive structures
emanatingfrom the myceliunq which under natural conditions lie buried in the soil or in the
'
substratewhere conditions are favorable for their growth. Recently Chang & Miles (1989) has
t defined mushrooms as, a micro fungus with a distinctive fruiting body which can be either
epigeousor h)?ogenous and large enough to be seenby naked eye and to be picked by hand.
I
Mushroomsbelong to classfungi of the plant kingdom. They are often defined as plantswithout
)
chlorophyll, that lack differentiation into stem, leaves,flowers and have distinct fruiting , which
? may be above or below the soil. Mushroom is derived from mousseron(French), atermtlat
includesedible & poisonousmushrooms.
)
The vegetative mycelium is composed of many inter-woven sepatatehlphae. The reproductive
I phaseis initiated by the formation of small knob like swellings at different points of interwoven
)
mycelial strands. These swellings increase in size and break through the surface of the
I
substratum as small balls constituting the button stage. A matured basidiocarp (fruit body) is

I whitish in colour and consistsof thick short stipe with an annulus.The stipe supportsthe pileus
which appearsas a hat like expansion.On the undersideof the pileus, a numberof radiatinggills
,
or lamellaare presentwhich are pink when young but purple-brownwhen mature'
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3. Seed(SpawnProduction):
Spawn,i.e. seedrequired for growing mushroon; is the vegetativemycelium from a selected
mushroomcultured on a convenientmedium like wheat, pearl millet, sorghumgrains, etc. In
simple words spawn is grains covered with musbroom mycelium. It essentially involves
preparationof pure culture of mushroomfiom tissue/spores,evaluationof selectedcukuresfor
yield, quality and other desirable traits, maintenanceof selected cultures on suitable agar
mediunr,followed by culturing on sterilizedgrains and firther muhiplication on grains.From
1652to 1894A.D. spawn was gatheredfrom the wild rather than made and was referred as
Naturalor Virgin spawn(from pastures& meadows)andFlake spawn(breakingofbeds through
which mushroommycelium has run), Mill-tack spawn(bricks dried and madefrom mixture of
horsedung cow dung and loam soil). In the beginningof 20th century pure mycelial culture
were madeandusedfor makingmanurespawnon sterilizedhorsemanureor compostmanure.

The processofmaking grain spawnwas first introducd by the PennsylvaniaStateUniversity in


1932. Grain spawri had an advantageover manure spawn as it could be mixed easity and
provided rnany inoculum points. The grain spawn was firther perfected by Stoller n 1962.
Today most of the traditbnal spawn laboratoriesworld over are using wheat, rye and millet
grains as substratefor spawn production and are following the standardtechniqueof rnother
spawnfrom pureculturemycelium grown on syntheticmedium.

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Ffure: I Spawn Production Pmcess

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CHAPTER 5: IYUTRITM VALUE OF MUSHROOM

Mushrooms are a rich source of nutrients, particularly proteins, minerals and vitamins such as
Vitamin B, C and D. The content of the anti-pellagravitamin, niacin is comparableto its levels
found in pork or beet, which are the richest known sources of this vitamin. Mushroom
cultivation is the only major fermentation industry, which involves the bio-conversion of
cellulosewastesinto edible biomass.

Meeting the food demand for the increasingpopulation from the limited land resourceis a big
challenge for our Indian democracy in this vulnerable climatb change era. In addition to this,
wide spreadmalnutrition and associateddiseasesare more common among the economically
poor populatiori.This compels us to searchfor cheapahernative quality nutritional sourcesfor
our huge population. Non green revolution otherwise refered as mushroom farming is one
amongthe apt ways to meet this challengebecausemushroomsgrow on wasteswithout requiring
additionalland besidesits exceptionalnutritional and medicinalproperties.

Accordingto an estimate,yield of mushroomper unit area,as such or in terms of proteinsis 100-


1000 times more than conventional agricufture like production of paddy, wheat, pulses and
cereals etc.,.hence, mushrooms are considered to be the best ahernative to supply the masses
with vegetableprotein rich food. Mushroomsare also good sourceof minerals.They are rich in
phosphorus,potassiumand iron but are low in sodium. About one third of the total iron in
mushroomsis in the available form. Mushroomsare good sourcesof severalvitamini and excel
many fruits and vegetables on this account. They are particularly rich in thiamine (81),
riboflavin (82), niacin, biotin, ascorbic acid, vitamin K and vitamin E. In addition to these,some
other interesting features in the nutritional quantities of mushrooms are (i) lack of starch (ii) low
fat content(iii) low calorific value (iv) presenceof a variety of sugarsand their derivativesand
(v) high frber content.Hence,they are said to be the 'delight of diabetics'.

Indian diet is primarily basedon cereals(wheat, rice and maize), which is deficient in protein.
Supplementation of mushroom recipe in Indian diet will bridge protein gap and improve the
general health of socio-economically backward communities. Earlier mushnooms were
consideredas an expensive vegetable and were preferred by affluent peoples for culinary
purposes.Currently common populace also considersmushroom as a quality food due to its
health benefits.Mushroom is consideredto be a complete,health food and suitable for all age
groups,child to agedpeople.The nutritional value of mushroomis affectedby numerousfactors
such as species,stage of development and environmentalconditions. Mushrooms are rich in
protein, dietary fiber, vitamins and minerals. The digestiblecarbohydrateprofile of mushroom
includes starches, pentoses, hexoses, disaccharides, amino sugars, sugar alcohols and sugar
acids.The total carbohydratecontent in mushroomvaried fiom 26-82%oon dry weight basis in
different mushrooms. The crude fiber composition of the mushroom consists of partially
digestiblepo$saccharidesand chitin.

KiranAgroPark,Bhilai,Orhattisgarh
15

A. Nutritive value of Oyster Mushroom:


Figure No: 2: Nutritive value of OysterMushroom (Pleurotussajor-caju)

B. MedicinalValues:

Sfurcethousandsof yeary edible fungi have beenreveredfor their immenseheahhbenefitsand


extensively used in folk medicine. Specific biochemical compounds in mushrooms are
responsiblefor improving human heahh in many ways. These bioactive compoundsihclude
polysacchaideg tri+erpenoids, low molecular weiglrt proteins, glycoproteins and
immunomodulatingcompounds.Hence mushnoomsfuve been shown to promote immune
function; boost health; lower the risk of cancer; inhibit tumor glowth; help balancingblood
sugar; wmd offviruses, bactcriq and firngi; reduce inflammation; and zupport.the body's
detoxification mechanisms. Increasing recognition of mushrooms in complementing
conventionalmedicinesis alsowell known for fighting manydiseases.

1. Good for heart

The edible mushroomshave little fat \ilith higher proportion of unsaturatedfttfy acids and
absenceofcholesterol and consequentlyit is the relevantchoice for heart patientsandtreating
cardiovasculardiseas€s.Minimal sodium with rich potassium in mushroom enhancessalt
balanceand maintainingblood circulation in humanbeing. Hencg mushroomsare suitablefor
peopb suffering from high blood pressure.Regularconsumptionof mushroomslike Lentinula"
Pleurotusspp.decreases cholesterollevels.The lovastatinobtainedfrom Pleurotusosheatusand
eritadeirineobtainedfiom shiitakehasthe abiliry to reduceblood cholesterollevels.

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2,Low calorie food

The diabeticpatientschoosemushroomas an ideal food due to its low calorific value, no starch,
little fat and sugars.The leanproteins presentin mushroomshelp to burn cholesterolin the body.
Thus it is most preferablefood for peoplestriving to shedtheir extra weight.

3. Prevents cancer

Compoundsrestricting tumor activities are found in some mushroomsbut only limited number
have undergoneclinical trials. All forms of edible mushrooms,and white button mushroomsin
particular, can prevent prostate and bneastcancer. Fresh mushrooms are capable of arresting the
action of 5-alpha-reductaseand aromatase,chemicals responsible for growth of cancerous
tumors. The drug known as Polysaccharide-K(Kresin), is isolated from Trametesversicolor
(Coriolusversicolor), which is used as a leading cancer drug. Some mushroom-derived
polysaccharideshave ability to reduce the side effects of radiotherapy and chemotherapytoo.
Such effects have been clinically validated in mushrooms like Lentinula edodes,
Trametesversicolor,Agaricus bisporus and.others.Seleniumin the form of seleo proteinsfound
in mushroomshas anticancerproperties.According to the InternationalCopper Association,the
mushnoom'shigh copper levels help to reducecolon cancerbesidesosteoporosis.

4. Regulatesdigestive system

The fermentablefiber as well as oligosaccharidefiom mushroomsacts as a prebiotics in intestine


and thereforethey anchor useful bacteria in the colon. This dietary frber assiststhe digestion
processand healthy functioning of bowel system.

5. Strcnglhens inmunity

Mushrooms are capable of strengthening the immgne system. A diverse collection of


polysaccharides(beta-glucans)and minerals, isolated from mushroom is responsiblefor up-
regulatingthe immune system.Thesecompoundspotentiatethe host's innate (non-specific)and
acquired(specific) immune responsesand activateall kinds of immune cells.

Mushrooms, akin to plants, have a great potential for the production of quality food. Theseare
the source of bioactive metabolites and are a prolific resource for drugs. Knowledge
advancementin biochemistry, biotechnology and molecular biology boosts application of
mushroomsin medical sciences.From a holistic consideration,the edible mushroomsand its by-
products may offer highly palatable, nutritious and healthy food besides its pharmacological
benefits.

Still there are enoughchallengesahead.Until now, how theseproductswork is elusive and vast
numberof potentialwild mushroomsis not explored.The utility of mycelia is paid little attention
but it has tremendous potential, as it can be produced year around with defined standards.
Knowledge on dose requirement,nouteand timing of administration,mechanismof action and

KiranAgroPark,Bhilai,Chhattisgarh
17

site of activity is also lacking. Work is under progressin various laboratoriesacrossthe world to
validatethesemedicinalpropertiesand to isolatenew compounds.If thesechallengesare met out
in the coming days, mushroom industries will play a lead role in neutraceutical and
pharmaceuticalindustries.The increasing awarenessabout high nutritional value accompanied
by medicinal propertiesmeansthat mushroomsare going to be important food item in coming
days and at placesmay emerge as a substituteto non-vegetarianfoods. Growing mushroomis
economicallyand ecologically beneficial. Consumingmushroom is beneficial in every respect.
Thus mushroomsaretruly health food, a promisingneutraceutical.

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CIIAPTER 6: MARKET ANALYSIS A}ID STRATEGY

1. Production & Market Status:

Large scale white button mushroom production is centered in Europe (mainly western part),
North America (USA, Canada)and S.E. Asia (China Kore4 Indonesia"Taiwan and India). The
nationalannualproductionof mushroomsis estimatedto be around 50,000 toneswith 85 percent
of this productionbeing of button mushrooms.
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 mushroomsall over the world is not very organizedexcept
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(cannedand dried) is sizeable and organized

a. Global Scenario:
)
About the mushroom marketing, Stan Hughes said 'Mushroom growers have mystified me for
) years.They put so much effort into growing and so little into selling". For effective and efficient
), marketing, especially exporg it is necessaryto understandthe global trade vis-i-vis the sources
of supply, potential regions of demand and consumption patterns. The global'mushroom
\J)
productionas per FAO Statisticswas estimatedat about2.18 to 3.41 million tons over period of
) last ten years(1997-2010).Mushrooms in FAO databasehave been classified as FAOStat code
0449 and have beendefined as those inter alia: Boletus edulis; Agaricus campestris,Morchella
)i
spp. and Tuber magatum.Sincethere was an increaseof about 56% world mushroomproduction
in last decadesand guesstimatescan be put on current production to be around 3.5 million tons.
China, USA, Netherlands,Poland, Spain,France,Italy,Ireland, Canadaand UK are the leading
a
producers.

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Table:2 World Production of Mushroom (Metric Tonnes)


J

; Countries 1997 2010


China 562194 I 568523
) USA 366810 359630
Netherland 240000 240000
) Poland 100000 160000
Japan 74782 67000
)
UnitedKinedom 107359 72000
t Canada 68020 73257
Ireland s7800 75000
) Italy s7646 E5900
\ France 173000 125000
Spain 81304 140000
) Germany 60000 55000
Indonesia 19000 48247
) India 9000 48000
Belsium NA 43000
) Australia 35485 42739
Iran 0000 28764
!
Korea 3559 28000
) Hungary 3l8l 2t200
Vietnam 0000 I 8000
) Denmark 8766 I 1000
)
Thailand 9000 9500
Israel 1260 939s
) SouthAfiica 7406 8500
New Zealand 7500 8500
Switzerland 7239 7440
Othercountries 8591
I 59297
Total World Production 2186222 3414s92
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I China
E USA
E Netherland
I Poland
I Japan
r united K:ngdom
I Canada
I lreland
I ltaly
I France
I Spain
r Germany
I lndonesia
r lndia
r Belgium
r Australia
I lran
I Korea
r Hungary
I Vietnam
I Denmark
r Thailand
r lsrael
r SouthAfiica
I NewZealand
g Suritzerland
€ Other countries

Charft 1: World Production of Mushroom (Metric Tonnes)

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The three major mushroomproducing countriesas FAO data viz., Chinq USA, and Netherland
)
accountfor more than 60%oof the world production;howevershareof China itself is 46% which
) is about half of the world mushroom production. According to current Indian estimates,
mushroom production of India is about I lakh mehic tons, which is about 3Yo of the world
t mushroomproduction.In USA and Europe major contributiontowards mushroomproductionis
, by white button mushroom. In Asian countries the scenariois different and other speciesare also
cuhivatedfor commercialproduction
)
Consideringttra;t95yo of mushroom production in China is consumedlocally, the consumption
t per capita is likely to be over l0 kg/person/year. This is drastically higher than in US and many
) Europeancountrieswhere it is around 3 kg/person/year.In India the consumptionis miserably
low. Consideringthat we produce over 1 lakh tons and export about 60-70Voof it, our per capita
) consumption is around 30-40 g/personlyeat
,
World mushroomproduction (FAOSIaQ is continuously increasingfiom 0.30 to 3.41 million
l tons over period of about last 50 yearsfrom 1961to 2010. Also the export and import fiend lines
shows that the mushnoom export/import has continuously increased in last 40 years, but
) marginally up io 1985 and beyond it there is tremendous increase in mushroom export/import
I upto 2010. Poland, Netherland, Ireland, China, Belgium, Lithuania, Canda and USA are the
major mushroomexporting countrieswhile countrieslike UK Germany,and France.
l
World processed(canned and dried) mushroom export is continuously increasing from 0.049 to
) 0.683 million tons over the period of last four decades(1970-2010) as comparedto the fresh
)
) mushroomexport (0.014 to 0.482 million tons) but fluctuationsin export is higher in caseof the
processedmushroom. In USA" five decades ago,75o/oof the mushroom consumption was in the
) form of cannedmushroom.Today, cannedmushroomcontributesonly 15% of total mushroom
) consumption
I

Largest importerof preservedmushrooms(canned) is Germany with about 1,05,186 tons in


2007 (FAO) followed by RussianFederation(69,726 metric tons), USA (67,058 metric tons) and
t Japan(32,757metric tons). Most of thesesuppliesare madeby China (4,05,112metric tons),
Netherland(1,15,349meffic tons), Spain (20,623 metric tons), France(18,496 metric tors) and
? Indonesia(18,392metric tons).
?
It is clear from the abovethat EuropeanUnion and USA are the biggest marketsand Polandand
i China are the biggestcompetitors,for mushroomsfrom India.

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b. National Scenario
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There is no denying the fact that production of mushrooms,especially of the white button
Mushroom & Oyster Mushroom, in India has gone up in the last few years but it has also
) exacerbatedits marketing problems. There have been frequent reports of gluts in north Indian
Statesduring the winter months forcing the distresssaleof the mushrooms.It should be borne in
)
mind that efforts to increasethe production without solving its marketing problems, would be
) counter-productive.The marketing of fresh mushroomswould determinethe future of mushroom
industry in India.
l
Despitethe changing currents,there is not yet much market for the processedfoods and basically
)
fresh vegetablesand fruits are preferred in this country. Freshmushroomshave very short shelf-
) life, cannot be transportedto long distanceswithout refrigeratedtransportfacility and are sold in
localized markets in and around production areas.The cultivation of white button mushrooms
I
throughoutthe year under controlled condition is restrictedto few commercial units and 30-40%
'
I ofthe production is being done under natural conditionsduring the winters. All the problemsof
marketing is experiencedin 2- 3 wintermonths (Dec-Feb)when more than75%oof the annual
) production comes in market for sale in limited duration and market area. Farmers face the
) consequencesof over-saturated market and are forced to sell their produce at highly un
remunerativeprices.Private processors,ratherthan coming for rescue,get temptedto avail of the
t situation for their benefrt.
,
Marketing of muslrooms in India is not yet organised.It is the simple system of producers
I selling directly to retailer or even to consumer,which has its own limitations. Unlike the other
countrieswhere l0% of the total cost is earmarkedfor marketing,we have not given marketing
t sufficient thought and investment.Per capitaconsumptionof mushroomsin
I
India is less than 50 g as against over a kg in various countries.There has not been any serious
) effort to promote the product, to strengthen and expand the market in order to increase its
consumption. Mushroom is a novel food item for this country and what to ask of its flavour,
)
texturg nutritive value, many are not aware of 'what is mushroom and whether vegetarianor
) non-vegetarianitem?'

t In the coming years,there is going to be good demandfor processedand fast foods. Mushrooms
may be canned to meet the demand in the off-seasonand in the nonproducing areas.Product
)
diversifieation shouldalso be tried. Regardingthe problemsof sale/exportof cannedmushrooms,
) serious thought has to be given to bring down the cost of production of mushroomsand its
processingin orderto competein the internationalmarket.
)

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Kiran Agro Park,Bhilai, Chhattisgarh
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,
2. Demand and Supply Patterns
)
White button mushroomsare grown all over the world and account for 35-45 % of the total
I
mushroom production. In India, large units with production capacities between 2000 - 3000
I 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
, throughoutIndia and function during the autumnand winter months only.
,
A big gap exists betweenthe demand and supply position of quality Oyster mushroomsin the
t 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%oof the export of
)
mushrooms.Germany is the largest importer and Franceand UK are large producersas well as
I
consumers.

, The demandfor fresh mushroomis increasingin the internationalmarket while that of preserved
or cannedmushroomsis decreasing.
,

) Nigerian having vast demand to market their mushrooms in their domestic market by having
commercial and qualrty production and then they can go for further exports of the same. There is
t huge demandand supply gap for samemarket and they have potential to cater various market.

t The possibilitiesof exporting fresh mushroomsto the marketsin Middle East, Europe and USA
) need to be explored.Europe is a very large producer of fresh button mushroomsas such only
someexotic varietiesof mushroomswhich are high priced can be exported to thesecountries.
I However, some inhibiting factors are high cost of transportationand absenceof proper pre-
cooling techniquesand storagefacilities.
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t 3. Export/Import Trends of Mushroom
t
World Production
,
The major varieties of mushrooms produced in the world are European or white-button
t mushroom(Agaricus bisporus),Oyster mushroomor Dhingri (Pleurotus spp), Chineseor paddy-
straw mushroom (Volvariella volvacea), shitake mushroom (Lentinus edodes)
t andAuriculana spp. Among thesethe most widely cultivated speciesis the Agaricus bisporus,
which accounts for almost 38%oof the total mushroom production. About 2,000 varieties of
t mushroomsgrown in the world are edible. Thesevarieties.aregrown in diverse regions of the
I world. The white-buttonmushroomis grown in the U.S.A, Franceand China.

I'.-- The Oyster mushroomis concentratedin China, which accountsfor over 80% of the production.
It is also grown in South Korea and ltaly. India is not a major producer of any of the mushroom
I varieties, but it doescuftivate mushrooms.The variety gaining maximum importance in India has
beenthe white-buttonmushroom,which registeredthe highestgrowth rate in production.
I
t World Trade

I Only about 45% of mushroomsproducedare consumedin the fresh form. The rest of the 55% is
processedwrth 5Yoin the dehydrated form and 50o/oin the canned form. This is becausetheir
I shelf life in the fiesh form is very short. Hence mushroomsare traded in the world market mostly
in the processedform.
I
I Netherlands is the largest exporter of canned button mushrooms with a market share of about
38.5%.China is anothersignificant exporterof the processedform of this variety, accountingfor
t almost 30% of world trade. France is anotherimportantexporter,contributing to about 135% of
the world exports.
I
Table 3: Importer countries of Mushroom
,

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t I Germany i
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As far as the import market is concerned,the most significant buyer of canned white button
) mushroom is Germany.This country alone accountsfor almost 40Yoof the world imports.USA
also imports cannedmushroom,accountingfor about l9% of the world imports.
t
) Netherlands is the leading exporter of button mushrooms (40% share) followed by Chin4
France, Spain, Hong Kong, Taiwarq Indonesiaand South Korea. USA is the largest consumer
t accounting for one third of World production. Other important consumersare Germany, UI!
France,Italy and Canada. The quantity of mushroomsexported by India in comparisonto the
t world export is ahnostnegligible. The following tables l& 2 gives the export statusof fresh and
, dried mushrooms.

I Table 4: Country-Wise Quantity and Value of Fresh Mushrooms Exported From India
during 2007 -2010
i_
t FreshMushrooms
Country
t Quantity Value (USD) ($)
Ireland 80.80 149100
,
Sineapore 1.5 2400
t U.A.E 0.0s 600
U.S.A 2575 l 6l 800
t Total 2657.35 313900
)
Table 5: Country-wise quantity and value of preserved/dried Mushrooms exported from
t India during2007 -2010
l
Presened/dried mushrooms
Country
) Ouantitv ValueruSD)
* France 60.00 I 03280
Japan 2.00 30720
t- Nigeria 7.58 12000
Russia 17.00 38660
t
Switzerland 5.00 12760
! U.A.E 13.01 16000
a U.S.A 6029.66 6l140
Total 6134.25 274560
)

3 The most important importersof white button mushroomare Germany,USA, France,U.K. and
Sweden. Cannedbutton mushroomsare imported by UK, Germany,France,USA, Swedenetc.
3 Asian countries like China, Taiwan, and Korea export their produce to the American and
1 Europeancountriesin the form of cannedmushrooms.

J KiranAgroPark,Bhilai,Chhattisgarh
t
;

)
)

) 26
l
4. Analysis And Future Strategy:
)
The industry has a comprehensivemarketing and promotionsprogram,basedon five year plans.
)
Part time co-coordinatorsare employed in each state to facilitate this program and to involve
) membersin promotional activities. Regular consumersurveysguide the direction of promotion
with a wide rangeof media being included in the program.Advertisementsare placedon TV and
)
radio and in all forms ofprint media.
)
The industry has a well developednetwork of food and cookery writers who supportpromotional
t efforts. As well direct marketinghas beenusedextensively,with cooking demonstrationsand in-
store activities featuringstrongly in the program.The Association's marketing program hasbeen
)
very successful.This successcan be attributed to careful planning and monitoring of activities,
as well as a commitmentto fund the progftlm at a level which will impact on consumers.Annual
per capita consumptionhas increasedfrom 0.65 kg n 197+to an estimated2.82 kg in 1995196.
)
This comparesvery favorably wrth 1.72 kg in the USA. This increasehas resulted from greater
) consumer awarenessof the nutritional value of muslrooms, as well as their great value for
money. The industry is developing a national grade standardsscheme,which will also enable
)
bettertargeting of consumerneeds.Whilst some grading now takes place, this varies from state
) to state and firm to farm.

, This national scheme will enable product to be described consistently across the country.
Consumershave expresseda demand for more choice in size of mushrooms and more grade
)
categorieswill meet this need. To date, there has been little activity in the export market:
) domesticdemandexceedsproduction, so there has been little incentiveto venture further afield.
The perishablenature of the product makes it costly to transport and to maintain the quality
\
necessaryto achieve good retums on overseas markets. As well, labour costs in Australia are
) higher than many competitor countries and this makes it difficuh to compete. In the near future,
this situation is unlikely to change, as there are mahy other countries better situated than
Australia to serviceoverseasmarkets.There is increasinginterestin specialty mushrooms(ones
) part from the common Agaricus). This is a relatively new segmentof the industry in Australia
and as yet there are only a few growers producing these.differentspecies.In time, this market
) will expandto provideconsumerswith a greaterrangeof choice.
l

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KiranAgro Park,Bhilai,Chhattisgarh
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4.1 Value Added Commodities
l
As yet, growers are not particularly active in this market segment.There are someproductswell
I
establishedon the market, including cannedmushroomsin saucesor in brine. Somegrowers are
I packing into 200gm pre-packs,and theseare proving popular with consumers.There have been
someattemptsto market a sliced mushroompack and this may becomemore common.
I
Overseastrends indicate that it is likely this market segmentwill expand, with pre-packaged
l productsincluding salad packs and things like mushroomswith microwaveablesaucescornmon
I in the US. Most vafue adding for mushrooms in Australia is done outside the mushroom
industry, by other food producers.Mushroomsare important ingredients rnphzas, pasta sauces
I and many pre-packagedmeals.
t"v j
4.2 Market Opportunities
I
Mushroomsare very popular in most of the developedcountriesand they are becomingpopular
I in many developing countries like India. Applications and market for mushrooms is growing
rapidly in India becauseof their nice arom4 nutritious values, subtle flavor and specialtaste.
I Many exotic food preparationslike soup, vegetables,pickles etc. are made from them. They are
I also used for garnishing, to prepare many varieties of gravy and for stuffing several food
preparations.But they are still consideredas up-marketproduct and their consumptionis limited
I to urban and semi urban areas.Fresh mushroomshave very limited shelf life but processedand
I cannedmushroomshave fairly long shelf life and can be sold even at far offplaces. Star hotels,
exclusive restaurants,certain caterersare the bulk consumersand a firm tie-up for regular supply
a with someofthem is advisable.The product can be sold even through departmentalstores,super
I markets

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, 28

,
CIIAPTER 7: PRODUCTION TECIINOLOGY
)
The cuhivation of Oyster mushroomor Dhingri mushroomor Pleurotusspp is relatively simple
) and can be a homesteadproject. The agro- climatic conditions in our country especially in the
) North Indian Statesare conducive for mushroom cultivation when the temperatureis l5-30oC
and relative humidity is 70-80%. The productiondecreasesduring peak periods of winter.
t
7.1 Climate & other conditions:
I
Pleurotusspp. is one of the choice edible mushroomswhich can be cultivated in the tropics. It
I has gained importanceonly in the last decadeand is now being cuhivated in many countries in
) the subtropicaland temperatezones.Different speciesof Pleurotusare suited for growing within
a temperature range of 15 to 30oC. P.sajor-caju can tolerate temperaturesupto 28-30oC,
t,
althoughit fruits hster and produceslarger mushroomsat 25oC during the cooler monthsof the
, year or in the highlandsof the tropics. This is the speciesnow popularly grown in the tropical
SoutheastAsian countries, including India. P.abalonusprefers lower temperaturesof 22-24oC
, and is most popular among the Chinese.P.ostreatusis the so-called low-temperaturePleurotus,
fruiting mostly at l2-20oC. This speciesis more suitedto the temperateclimates of Europe and
I the United States,ahhoughmany growers in the USA are also producingP.sajor-caju.
'
In Europe it'is known as the oyster mushroom(P.ostreatus)while in China it is called the balone
I mushroom(P.abalonusor P. cystidiosus).Severalother speciesare now availableforcultivation.
These are P.sajor-caju,P.florida (probably a variant of P.ostreatus),P.sapidus,P.eryngii, P.
I columbinus,P.cornucopiae,and P.abellatus.
I
7.2 Substrate:
I
Like other mushrooms,Pleurofus spp. can be grown on various agricultural waste materials
,,
using different technologies.They grow well on different types of lignocellulosesmaterials,
l' convertingthem into digestible and protein-rich substancessuitable for animal feeds.Pleurotus
spp. may be produced in the tropics on a mixture of sawdustand rice bran, rice straw and rice
)
bran, saw dust and ipil-ipil leavesand other combinationsof tropical wastes.Other wastessuch
, as corncobs,cotton waste, sugarcanebagasseand leaves,corn leaves,grasses,rice hulls and
water hyacinth leavesare also good substratesfor growing this mushroom(Quimio, 1986).The
'
substratesusedin eachregion dependupon the availability of agriculturalwastes.
l
7.3 Preparation of substrate - Sterilization / Pasteurization:
)
The use of a pressure cooker to sterilize Pleurotus substrate is not recommended since
) sterilization kills beneficial micro organismswhich are present in the substrate,as well as the
harmful ones. In addition, nutrients in the compost are broken down by sterilization into forms
)
more favorable for the growth and developmentof competing micro organisms(FAO, 1983).
), Thus, substratesthat are sterilized are easily contaminatedunless spawnedunder very aseptic

)r

) KiranAgroPark,Bhilai,Chhattisgarh

)'
I

I 29
)
conditions, as in media and spawn prep4lation steaming at l00oC (pasteurization) is more
I acceptablebecausethe cost is lower (ttrpfsteamer may only be an ordinary large-capacity
) casseroleor a drum) and substratesthus,bteamedare less susceptibleto contamination.The
substrateis steamedfor 2-3 hours, depenffne on the volume and the size of the bags. When
) using a lower temperature(60-70oC) as in tlfe caseof room or bulk pasteurization,the substrates,
) whetherin bulk or alreadypackedin bags,are steamedfor at least6 to 8 hours.

) 7.4 Inoculation / Spawning:

) Spawning is canied out aseptically, preferably using the same transfer chamber or the same
inoculationroom asiis used in spawnspreparation.Grain or sawdustspawn is commonly usedto
I
inoculate the substrate in bags. With grain spawrL the bottle is shaken to separatethe seeds
t colonizedwith the white mycelium. After lifting the plug and flaming the mouth of the bottle, a
few spawn grains (about I to 2 tsp.) are porned into the substratebag. Both the plug of the spawn
) and the plug of the compost bag are replaced and the next bags are then inoculated. The newly
I inoculatedbags are slightly tilted to distribute the grains evenly in the shoulderareaof the bag
around the neck.
)
For sawdust spawn, the spawn is broken up with an aseptic needle. A piece of the spawn may
) then be transferred,using a long flat-spoonedneedle especially designedto scoopthe spawn.
) One bottle of grain or sawdust spawn in a 500 ml dextrose bottle is sufficient to inoculate 40 to
50 bags.
)
The highly industrialized method involves bulk-pasteurization and bulk-spawning before the
) substratesarEdistributed in beds.similarto those usedfor Agaricus. The systemis labour-saving
) but requires more complex equipment.Bulk material processingand handling are highly risky
for tropical mushroomcuhivation due to the risk of contamination.
)
T.5Incubation:

\ The spawnedcompost bags are kept in a dark room until the mycelium has fully penetratedto
the bottom of the substrate. ln 20 to 30 days, depending upon the substrate/substrate
) combination,the substrateappearswhite, due to the growth of the mycelium. The bags are kept
for an additional week before they are openedto check that the mycelium is mature enoughto
)
fruit. Most strainsof the mushroomform primordia after 3 to 4 weeks of mycelial growth. The
) bagsare opened,to initiate fruiting, insidea mushroomhouse.

) 7.6 Fruiting:

The size of the mushroomhousewill dependon the number of bags preparedat any one time.
The house may be built of nip4 sawali, wood or concrete.Air vents on the upper walls will
provide the ventilation requiredfor the developmentof the sporocarps.At the sametime a small
) amount of light should be provided inside the house. The walls may be covered with plastic or

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foam sheetsto increasethe relative humidity (80-95%) in the production house.Shelves,made
)
from bambooor wood, line both sidesof the house.The shelvesare on bamboofiames, one shelf
) abovethe other, with about 40-50 cm spacebetweenthem. They should be strongenoughto hold
the bagsor blockscontainingthe compost.
)
The bags are opened by removing the plug and then rolling down the mouth of the bag.
)
Alternatively, the mouth portion may be cut off with the help of a sharp instrumentor the bag
) may be slit either criss-crossat four to six placesor simply slashedlengthwise.When following
the latter technique,the bags may be suspendedwith a rope or string. When using blocks instead
)
of bags, the blocks are opened either completely or with only the surface or upper portions
) exposed.

) Fruiting requires an appropriate temperaturerange (20-28oC), ventilation, light moisture and


humidity (80-95%). To provide moisture, daily watering of the substrate is required but
)
excessivewatering should be avoided. If the temperatureinside the house rises to more than
) 30oC, a light water mist should be used to lower the temperature and hastenfruiting. Doors and
windows may also be opened,especiallyat night to keepthe areacool.
l
Approximately 3 to 4 days after openingthe bags,mushroomprimordia will begin to form and
)
maturemushroomswould be ready for harvestingin the following 2 to 3 days.If the substrateis
) not fully colonized,the onsetof fruiting is likely to be delayed.

) To harvest the mushrooms,they are to be graspedby the stalk and gently twisted and pulled. A
knife should not be used.If kept in a refrigeratoror in a cool place, the mushroomscan remain
I
fresh for up to 3 to 6 days. After harvesting from the top end of the bag, the other end may be

I openedto allow fruiting. The two ends are sometimesopenedand allowed to fruit at the same
time. After harvestingfrom the end portions,slits may be made on the centralportion of the bag
)
so that more mushroomscan develop. When a sawdustsubstrateis used,the harvestedsurface
)- may be scraped lightly to expose a new surface for fruiting. As long as the substrate appcars
white, mushroomswill continue to form under adequateenvironmental conditions. When it
)-'
appearscolorlessand soft, it is time to removethe bagsfrom the house.
)
7.7 Yield:
)
Yield ranges from about 100-200% of the dry weight of the substrateand dependson the
) substratecombination as well as the way in which the substratehas been managedduring the
fruiting season.The richer the combinationand the whiter and denserthe mycelium, the greater
)
will be the mushroomyield. To increaseyield, the most common supplementused is urea or
) organic fertilizer dissolvedin water (100 gm in 100 liters water). Using a plastic mist sprayer,the
solution is sprayedon the surfaceimmediatelybefore fruiting.
)

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CIIAPTER 8: POST HARVEST MANAGEMENT
)
8.1 Storage:
t
(A) Short-terrr Storages
)
Fresh mushroomsare packed in perforatedpolythene bags which are directly sent to the local
l
market situatednearby.Freshly harvestedmushroomscan be stored at low temperature(0-50 C)
l for l-2 weeks without loss in quality in caseit is to be sent to the distant markets.
t @) Long-term Storage:
I Dried mushroomwith 2-4%omoisture can be stored for 3-4 months in sealedpoucheswithout
: any change in taste. The dried produce can be rehydrated in luke warm water (40-500 C) within
20-30 minutesgiving 8&90% of original weight.
I
8.2 Packing and Transportation
I
Fresh mushroomsare packed in perforated polythene bags. Poly pouches containing crushedice
I
and overwrapped in paper are put in trayVbaskets which are then covered with thin polyhene
I sheetwith sufftcient perforation for proper aeration.The pre-packedpouches(250 or 500 g.) can
be transported by roadways in trucks, busesdependingupon the quantity to be transported.
I
8.3 Marketing:
)
Domestic marketingdoes not pose'a problem at presentbecauseonly small quantitiesaie being
I
traded. As production develops, marketing promotion measureswill need to be undertaken to
) bolster the demand. Export potential exists and needs to be taken advantage of by organizing
cobperativesof producers linked to commercial units for processing fresh mushroom into
)
dehydratedpowder for export.
)

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32

CI{APTER 9: SOURCES FOR TECHNOLOGY


)

) Sprout Consultancyservices,Pune, India.

) Mr. Anil Wanarue Patil

) Mr. Anil is a Post Graduatein Agri. businessand PlantationManagementfrom Indian Institute


of PlantationManagement,Bangalore. He has great interest in mushroom cultivation and has
specializedin settingup mushroomplantsand growing mushroom.
)
IvIr. Anil is presently acting as Mushroom Consultant in the field of mushrooms.Also he is
) Director for SproutNaturals, Pune,which companyfunctioning in the Agriculture supply chain
domain.He hasbeenthe masterbrain behind the drafting of mushroomproject to be established
) by the company. He has also undergonemany training programs on mushroom production
) technologyfrom recognizedinstituteslike, Agricutture College Puneand DMR Solan,Himachal
Pradesh.He is having almost 2 years of experiencein setting mushroom farms on commercial
] scale.
) In all aver India he setup various plants for button mushroom, Oyster mushroom and other
) medicinal mushroom for commercial production of nnging capacrtyof 1000 kg to 5000kg on
per day basisproduction.

Mr. Raju Jadhav


)
Mr. Jadhavis Graduatein B.Com and startedhis journey with Mushroom field as Asst. Manager
)
(Mushroom Researchand Growing) from 1985 to 1999 with Himraj Mushrooms in Chakan
Pune.

He Worked then for Karjat FreshMushroomsin Mumbai Maharashtrafrom 2001 to June2005.


l
He also worked as mushroomexpert in Navin Fresh mushroomsfrom Pune and still providing
consulting to farm as senior mushroomconsuftantfor Sprout ConsultancyServices.This total
journey is of almost 25 to 30 years only in case of Button mushroom cultivation technology
1 showing efforts and great commitment in the field of Mushrooms. Mr. Jadhav,in this joumey
\ had set up of about l0 Button Mushroom plants and all of them are today in very good running
conditionsgiving 100% efficiency in caseof production and quality. Now he is associatedwith
) SproutConsuhancyServices,Puneas SeniorConsultantfor Mushroomcultivation.

)
)
KiranAgroPark,Bhilai,Chhattisgarh
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)

) CIIAPTER 10: ECONOMICS OF THE PROJECT

) The demand for Oyster Mushroom is increasing rapidly in international markets and a big gap
exists between supply and demand. There is need to take advantage of this situation by
) encouragingits production which is a highly viable venture as brought out below for Kiran Agro
Park, Bhilai, Chhattisgarhcompanyputting handsin commercialcuhivation of agriculturecrops
)
in the country.Companymovement in to large scaleproduction of Oyster mushroomwould give
) fast returnsto them and will contribute in the weahh of nation.

)
Detailed informationregardingeconomicsof the project is provided as follows;
)

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34
r
ANNEXURE 1: ESTIMATED PROJECTCOST
i
J
EstimatedProject Cost for Kiran Agro
l Park
I Fixed Cost estimation
)

)
A Land & Site Develooment
I I Land Nit Sqft Nil Nit 7000 I s0000
Sub Total 150000
I l:i::r;ii::;:rl

t B BuildineStructure
I Straw StorageShade Sqft 20x25 r50 500 75000
) 2 Strawsoakingroom sqft 30x10 300 300 90000
)
J Sterilization svstern room sqft 3(}xl0 300 300 90000
4 Soawniney'Bed
fi llins room Sqft 3Oxl0 350 300 105000
l Incubation room Sqft 20x25 350 500 175000
6 Growins/Harvestingroom Sqft 40x25 350 r000 350000
)

) 7 MushroomProcessinsUnit (Drvine Room) I Sqft 20x10 300 200 60000


8 Drv Mushroom storage room Sqm 20x10 300 200 60000
) 9 Office /Staffroom/ Restroom Sqft 20x15 300 300 90000
t t 0 SpawnLab Sqft 20x25 350 500 175000
lt Training Centreroom Sqft 20x15 300 300 90000
t2 fuchitect PlanFees % Nit Nil 2.00% 28800
Sub Total 1388800
?
) C Plant & Machinen
a Sterilizationsystem Nil Nil Nil Nil 190000
)- .2 Elechic Tray dryer Nil Nil Nil Nil 7s000
! A Ms racks Nit Nil Nil NiI Nil 175000
,/4 Humidity maintaining and controlling 75000
? svstem Nil Nil NiI Nil Nil
4 Ventilation system Nil Nil Nit Nil Nil 20000
l
16
Temperature
maintainingandcontrolling 30000
, svstem Nil Nil Nil Nil Nil
J Thermometers& Hyprometers Nil Nil Nil Nit Nil 7000
J A 25000
Shaw choppins machine Nil Nil Nit Nil Nil
t
9 Water Sprayingsystem N Nil Ni Nil Nil 5000
l 0 Soawn Lab Eouioments Ni Nil Ni Nil Nil 500000
't) .11 SealineMachines 7000
Ni Nil Ni Nil Nil
t2 OtherMiscellaneous
Equipments Nil Nit Ni Nil NiI 5000
)
1
KiranAgroPark,Bhilai,Chhattisgarh
),
I

) 35
)

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t
l E te$ProjeCtCost
t Sr. No. Costof the Items Amt. (Rs. in Lakhs)
)
' I Land Cost 1.50
2 Building (Ciyil & Structural Work) r3.89
'
3 MachinerT & Equipments tl.t4
1 4 Furniture & Fixtures 0.35
)
) f, Preliminary & PreoperativeExpenses 1.88
6 Margin for Working Capital 1.42
)
Total Cost of the Project 30.r8
!,
Sr. No. Means of Finance Amt. (Rs. in Lakhs)
,
I Promoters Contributio n (20%) 6.04
t, , Subsidy *
3 ProposedBank Loan (80%) 24.14
;
I
Total Means of Finance 30.8
1
]

)
Note: SubsidybyNHM for the Mushroomprojectis back-ended.
Hencesubsidyamountis
t includedin thetermloanamountandthesameis ignoredwhilecalculatingintereston termloan.
t

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)
will focuson RatioAnalysisWorkingfor the pdect.
Followingannexure
J
2: INTERNALRATEOFRETURN
AI\NEXTJRE
)
Intemal Rate of Return 34.zlYo
)
Cash Fllow Discounting Factor Net Cash Flow Discounted Cash Flow
)
CashOutflowsat year0 1.00000 (2,726,000) (2,726,000)
Net Cashinflows at year I 0.74512 616,142 4 5 9 ,011
)
Net Cashinfbws atyear2 0.5552r 1,262,857 701,147
)
Net Cashinflowsat year3 0.41370 1,486,547 614,980
)
Net Cash inflows rtyear 4 0.30825 1,676,149 516,680
) Net Cashinflowsat year5 0.22969 1,889,933 434,093
) Net PnesentValue 0
)

) ANNEXTRE 3: BENEFIT COST RATIO & NET PRESENTVALUE

) BenefitCostRatio & Net PresentValue 15.000%


) Cash X'low Discounting Net Cash DiscountedCash
Factor Flow Flow
)
CashOrrtflows at year 0 1.00000 (2,726,000) (2,726,000)
\
Net Cashinflowsat year I 0.86957 616,142 535,776
Net Cashinflowsatyear2 0.75614 1,262,957 954,901
t
Net Cashinflows atyear 3 0.6s752 1,486,547 977,429
J
Net Cash inflows atyear 4 0.s7r 75 1,676,148 958,343
)
Net Cashinfbws at year5 0.49718 1,889,933 939,631
)
Valueof discounted
Present CashInflow 4,366,079
)
PresentValue of discounted Cash Outflow 2,726,000
)
Net PresentValue(Rs.) 1,640,079
)
BenefitCostRatio 1.60
1
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Kiran Agro Park, Bhilai, Othattisgarh

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37
\
ANNEXURE4: PAY BACK PERIOD
)
Pay BackPeriod Discounted
t Pay Back Period (Without Discounting) Pay Back Period
l Cumulative Net Cumulative
Year Cash Flow DiscountedCash Flow
)
Year 0 (2,726,000> (2,726,000)
Year I (2,I 0g,g5g) (2,190,224)
' Yeal2 (847,001) (1,235,323)
Year3 639,546 (257,894)
l
Year4 2,315,694 700,449
) 4,205,627
\:.2. Year 5 1,640,079
) Pay BackPeriod 2Years&TMonths 3Yean&3Months
l
ANNEXURE5: BREAK EVEN ANALYSIS
)

) Break Even Point (Kgs) 2012-t3 2013-14 2014-r5 2015.16 20tGt7


FixedCost: 418,831 394,033 363J3s 337,756 316,754
) Repairs& Maintenance 20,378 22,416 24,657 27,123 29,835
Other OperationalExpenses 16,333 30,800 33,880 37,268 40,995
)
Office& GeneralExpenses 10,000 I1,000 12,100 1 3 , 3 1 0 14,641
,] Insurancecharges 25,000 22,000 19,000 16,000 13,000
1
Depreciation
& Amortization 347,120 307,917 273,699 244,055 2t8,283
Rwenue 1,653,7503,118,5003,430J50 3,773,385 4,150,724
VariableCosts:
Raw Material Cost 385,875 727,650 800,415 880,457 968,502
Labour Charges I 15,500 217,800 239,590 263,538 289,892
i:' Fuel& ElectricityExpenses 60,610 114,293 125,722 138,295 152,124
PackingMaterial Cost 36,750 69,300 76,230 83,853 92,238
: TransportationCharges 31,646 59,675 65.643 72,207 79,427
t WaterCharges 10,208 19,250 21,175 23,293 25,622
Contribution (Revenue- Variable 1,013,1611,910,5322,101,5852,311,744 2,542,918
J Cost)
output(Kgs)
YearlyProcessed 3 , 15 0 4,725 4,725 4,725 4,725
a
Contributionper unit 322 404 445 489 538
1 Capacity(Kgs) 4,725 4,725 4,725 4,725 4,725
Break-even Point Units (Kgs) 1,302 974 8t7 690 589
Break-even
Point% 28% 21% 17% I5% 12%
t Marsin of Safety (Kes) 3,423 3,751 3,908 4,035 4,136
Margin of Safety% 72% 79% 83% 85% 88%

KiranAgro Park,Bhilai, Chhattisgarh


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ANNEXURE6: DEBT SERVICE COVERAGERATIO (DSCR)


)

f Debt ServiceCoverage Ratio 20t2-13 20t3-14 201+15 201A16 20tGr7


(DscR)
Coven
Net Profit After Tax 347,334 1,024,4021,227,6771,448,337 1,689,519
l' ion & Amortization
Depreciat 347,120 307,817 273,698 244,055 218,283
) Term loan Interest 230,625 295,924 227,368 147,792 55,423
CoverTotal 925,079 1,629,144t,728,683 1,840,184 1,9631224
i'
Senice:
TermLoanPrincipalRepayment 250,967 426,464 495,020 574i,596 666,953
)
TermInan Interest 230,625 295,924 227,368 147,792 55,423
) Canital Withdrawal 42,000 132,000 145,200 t59,720 t75,692
ServiceTotal 523,592 854'388 867,588 882,109 898,068
)
DSCR 1.77 1.91 1.99 2.09 2.r9
l Minimum DSCR 1.77
MaximumDSCR 2.19
9
Averaqe DSCR 1.99
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Here in follows all the financial statementsof the project would start.
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ANNEXURE7: PROJECTEDPROFIT & LOSSACCOUNT
'
l PrciectedProfit & LossAecount
Ref.
I No. Particulars Schedule 2012-13 2013-t4 2014-ls 2015-16 20lGr7
1,653,7503 , 11 8 , 5 0 0
3 ,430,350 1 ,150,724
3 ,773,385
F A SalesRevenue A
Total Income / Revenue t,653,750 3,118,500,,430J50 ,,7731385 1,1s0,724
F B (Rs)

I
385,875 727,650 800,415 880,457 968,502
, c Raw Material Cost B
c I 15,500 217,800 239,580 263,538 289,892
D LabourChare€s
D Fuel& Electricity 60,610 114,293 125,722 138,295 152,124
t E Exoenses D
F PackineMaterial Cost E 36,750 69,300 76,230 93,853 92,238
I 31,646 59,675 65,643 72,207 79,427
G Transportation Charges
p 10,208 19,250 21,175 23,293 25,622
H Water Charses
20,378 22,416 24,657 , 2 7 , 1 2 3 29,835
1
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I Reoahs& Maintenance
Other Operational 16,333 30,800 33,880 37,268 40,995
J Exoenses
I Office & General 10,000 I 1,000 1 2 , 1 0 0 t 3 , 3 1 0 14,641
K Expenses
t L Insuranc,echarges
25,000 22,000 19,000 16,000 13,000
l. Total Cost (Rs) 712,300 1294,1841,418,4021,555,3421,706277

I
941,450 1,824,3162,011,948
2,218,0432,4u,447
t M Operatins Profit (Rs)
230,625', 295,924 227,368 147,7.92 55,423
N Interest
3 Depreciation & 347,120 307,817 273,698 244,055 218,283
? o Amortization
363,705 1,220,575
1 , 51 0 , 8 8 21,826,195,170,741
P Net Profrt before Tax
T
16,370 196,172 283,265 377,859 481,222
t
a Tax
347,334 1,024,4021,227,6171 ,448$37 1,689,519
R Profit After Tax (Rs)
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Here in follows all the financial statementsofthe project would start.
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ANNEXURE7: PROJECTEDPROFIT & LOSSACCOUNT
t
l FrojectedPrqtit & LossAccount
Ref.
I No. Particulars Schedule 2012-13 2013-14 2014-t5 20r5-16 2016-17
1,653,7503,118,5001,430,350 + ,150,724
3,773,385
F A SalesRevenue A
Total Income / Revenue 1,653,750 3,118,500t,430,3501,773,3851,150,724
F B (Rs)

I
c Raw Material Cost B 385,875 727,650 800,415 880,457 968,502
i
D LabourChars€s c I 15,500 217,800 239,580 263,539 289,892
t Fuel& Electricity 60,610 114,293 125,722 138,295 t52,124
I E Exoenses D
F PackineMaterial Cost E 36,750 69,300 76,230 83,853 92,238
t 31,646 59,675 65,643 72,207 79,427
G Charees
Transportation
F H Water Charges 10,208 19,250 21,175 23,293 25,622
I I Reoahs& Maintenance 20,378 22,416 24,657 , 27,123 29,835
OtherOperational 16,333 30,900 33,980 37,268 40,995
t J Exoenses
I Office & General 10,000 I1,000 1 2 , 1 0 0 1 3 , 3 1 0 t4,641
K ExDenses
I L Insurancecharges 25,000 22,000 19,000 16,000 13,000
I, Total Cost (Rs) 712,300 1294,184 lr4lg,402 1,555J421,706277
t
p M Oneratins Pnofit (Rs) 941,450 1,824,3162,011,9482218,043 1,444,447

lnterest 230,625 295,924 227,368 147,V.92 55,423


p N
Depreciation& 347,120 307,817 273,698 244,055 218,283
t o Amortization
''.,170,741
P Net Profit before Tax
363,705 1,220,575
1 ,510,9821,826,195
I 16,370 196,172 283,265 377,859 48t,222
o Tax
I 347,334 1,024,40211227,6171,449,3371,689,519
R Profit After Tax (Rs)
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ANNEXURE8: SCHEDULESTO PROFIT & LOSSACCOUNT
I
Schedulesto Profit & Loss Account
t
A SalesRevenue of Mushroom Output Selling Sale (Rs.)
I (Ks/dav) Price/Ke
l5 600 9,000
I Dailv SalesRevenue(Rs.) - Drv Ovster Mushroom
675 405,000
I SalesRevenueDerLife Cvcle of45 davs
4,725 2,835,000
F Annual(7 Life Cycles)SalesRevenue(Rs.)
I
t
B Raw Material Cost Unit Rate Quantity No. of Life Annual Raw
per Kg. per Life Cycles in a Material
(Rs.) Cycle year Cost (Rs.)
I (Kos)
I Staw (Wheat/Soya/Paddy/Cotton
etc.) 6 9,000 7 378,000
t
2 Soawn(Seedfor cuhivation) s0 750 7 262,500
! 3 Chemicals 21,000
AnnualRaw Material Cost (Rs.) 661,500
I
t C LabourCost No. of Staff Labour Costper month Yearly Labour Cost
I I Supervisor I 3.000 36,000
2 Skilledlabour 2 2.500 60.000
I t
J Unskilled labour J 2.000 72,000
t 4 Salesman I 2,500 30.000
Total Labour Cost (Rs) 198.000
I
I
! D Fuel& Electricitv Charses
t DailvUnitsconsumed
Average Rate per unit (Rs)
45
7.33
t DailyElectricityCharges(Rs) 330
ElectricitvCharsesper Life Cycle(Rs) 14,843
t Yearly Fuel & Electricity Charges (Rs) 103,903
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ANNExt RE 8: SCHEDULESTO PROFIT & LOSSACCOUNT
l
Schedulesto Profit & Loss Account
,
A SalesRevenue of Mushroom Output Selling Sale (Rs.)
t (Ks/dav) Price/Ks
l5 600 9,000
I Dailv SalesRevenueRs.) - Drv Ovster Mushroom
67s 405,000
l SalesRevenueper Life Cycle of 45 davs
4,725
s Annual0 Life Cvcles)SalesRevenue(Rs.)
2,835,000

I
B Raw Material Cost Unit Rate Quantity No. of Life Annual Raw
t per Kg. per Life Cycles in a Material
(Rs.) Cycle year Cost (Rs.)
I (Kss)
I Straw (WheaUSoya/Paddy/Cottonetc.) 6 9,000 7 378,000
I 2 Spawn(Seedfor cuhivation) 50 750 7 262,500
l 3 Chemicals 21,000
Annual Raw Material Cost (Rs.) 661,500
$
I c LabourCost No. of Staff Labour Cost per month YearlyLabour Cost
I I Suoerisor I 3,000 36,000
2 Skilledlabour 2 2,500 60,000
t 3 Unskilled labour J 2.000 72.000
t 4 Salesman I 2.500 30,000
Total Labour Cost (Rs) 198.000
I
t D Fuel & Electricity Charges
DailyUnitsconsumed 45
f' AverageRate per unit (Rs) 7.33
t DailyElectricityCharges(Rs) 330
Elechicity Chargesper Life Cycle (Rs) 14,E43
I YearlyFuel & Electricity Charges(Rs) 103,903
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E Packing Material Cost

PPBags(18'x36') of 100gauge 6,000

2 PPbagsfor freshandDry mushroom 3,000

Total Packing Material cost per Life Cycle 9,000


, Annual Packing Material Cost (Rs) 63,000
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ANNEXTJRE9: PROJECTEDBALANCE SHEET
,
Projected Balance Sheet
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Particulars 2012-13 2013-r4 20t4-15 2015-16 2016-17
Assets:
Fixed Assets(Net Block) 2,378,320 2,108,143 1,872,085 1,665,670 1,485,027
l
Land 150,000 150,000 150,000 150,000 150,000
, Building Structure 1,249,920 1,124,928 1,012,435 9ll,l92 820,073
Machinery 946,900 804,865 684,135 5 8 1 , 5 1 5 494,288
*
Furniture& Fixtures 31,500 28,350 25,515 22,964 20,667
I

!:.
Current Assets 441"300 l'250J18 2,118,921 3,085,255 4,159,495
SundryDebtors I 1 8 , 1 2 5 222,750 245,025 269,528 296,480
, CashBalance 323,175 1,027,568 1,873,896 2,815,727 3,863,015
I
MiscellaneousAssets 150,560 112,920 xs280 37,640
t Expenses
Pre-operating I 50,560 112,920 75,280 37,640
t
Total Assets 21970,190 3,471381 4,066286 4,788,565 5,644,522
t
t Liabilities:
Capital Account 761,334 1,659,737 2,742,154 4,030,771 5,544,598
*
Introduced 462,.000
t Net Profrt 347,334 1,024,402 1,227,617 1,449,337 l9
I ,689,5
! Total. 809,334 1,024,402 1,227,617 1,448,337 1,689,519
Drawings 42,000 132,000 145,200 159,720 175,692
l

* Term Loan from Bank 2,163,033 1,736,569 1,241,550 666,953

? Current Liabilities & 39,813 75,075 82,583 90,841 99,925


? Prcvisions
SundryCreditors 30,I 88 56,925 62,618 68,879 75,767
t Provisiqnfor expenses 9,625 I8,150 19,965 21,962 24,158

t Total Liabilities 2,970,180 3,471381 4,066,286 4,788,565 5,6441522


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43

AI\NEXURE l0: FIXED ASSETS& DEPRECIATION SCHEDULE


t
D
Fixed Assets& Depreciation schedule
t
Land 2012-13 2013-14 201+rs 2015-16 2016-17
9 OpeningBalance 150,000 150,000 150,000 150,000 150,000
D Additions
Total 150,000 150,000 150,000 150,000 150,000
I
Depreciation
t Closing Balance 150,000 150,000 150,000 150,000 150,000
t
Building Stmcturc 2012-13 2013-14 201+rs 2015-16 20tfit7
D gll,l92
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OpeningBalance 1,249,920 1,124,928 1,012,435
I Additions 1,388,800
' Total 1,388,800 1,249,920 1,124,928 1,012,435 9ll,l92
Depreciation 138,880 124,992 t12,493 101,244 9l,l l9
! ClosingBalance 1,249,920 1,124,928 1,012,435 9ll,l92 820,073
t
I Machinery 2012-t3 2013-14 20t+ts 201S16 20till7
OpeningBalance 946,900 804,865 684,I 35 581,515
I Additions l,l 14,000
I Total 1,114,000 946,900 804,865 684,I 35 5 81 , 51 5
; Depreciation 167,100 142,035 120,730 102,620 87,227
1
ClosingBalance 946,900 804,865 684,135 581,515 494,288
I
t Fumiture & Fixtures 2012-13 2013-14 20t+rs 2015-16 20lGl7
OpeningBalance 31,500 28,350 25,515 22,964
t
Additions 35,000
I Total 35,000 31 , 5 0 0 28,350 25,515 22,964
I Depreciation 3,500 3,150 2,835 2,552 2,296
ClosingBalance 3 1 ,5 0 0 28,350 25,515 22,964 20,667
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ANNEXTJRE1I: TERM LOAN REPAYMENT SCHEDULE


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Term LoanRepaymentSchedule ( R s i.n ' 0 0 0 )
t Particulars Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar
} 20t2-t3
Opening 2,414 2,384 2,354 2,323 2,292 2,260 2,228 2,196
t Balance
lnterestdue 30 30 29 29 29 28 28 27
*
Total 2,444 2,4t4 2,383 2,352 2,32O 2,288 2,256 2,223
t Repayment 60 60 50 60 60 60 60 60
Closing 2,384 2,354 2,323 2,292 2,260 2,228 2,L96 2,153
I Balance
dl 20t3-t4
Opening 2,163 2,13O 2,@6 2,062 2,O29 1,993 1,958 L,922 1,886 L,Ug L,8!2 L,775
t Balance
lnterestdue 27 27 26 26 25 25 24 24 24 23 23 22
t Total 2,190 2,156 2,t22 2,088 2,053 2,018 1,982 L,946 1,909 1,872 1,835 t,797
Repayment 60 60 50 60 60 50 60 60 60 60 60 50
t Closing 2,L30 2,W6 2,062 2,028 1,993 1,958 t,922 1,886 L,U9 1,872 L,775 t,737
t Balance
20t+ts
1 Opening
Balance
t,737 1,698 1,659 1,620 1,580 1,539 1,498 t,457 1,415 t,372 1,329 t,286

t lnterestdue 22 2L 2t 20 20 19 19 18 18 t7 t7 16
Total t,758 1,7t9 1,58O L,640 1,599 1,558 t,5t7 t,475 L,433 1,389 t,346 L,302
I Repayment 60 60 60 60 60 60 60 60 60 50 50 60
t Closing 1,698 1,659 t,620 1,580 1,539 1,498 LAsT L,415 L,372 L,329 r,286 L,242
Balance
t 2015-15
:, Opening t,242 t,197 !,152 1,106 1,059 L,Otz 95s 9!7 858 819 769 7t8
Balance
I: lnterestdue L6 15 74 L4 13 13 t2 tt LL 10 10 9
Total 1,257 1,2!2 1,166 t,LzO t,073 t,025 977 928 879 829 778 727
t Repayment 60 60 50 60 60 50 60 50 60 60 60 60
t Closing
Balance
L,197 L,L52 1,106 1,059 t,ot2 965 9L7 868 819 769 7L8 667

t 20L6.r7
Opening 667 515 563 509 456 407 346 290 233 L76 118 59
t Balance
t Interestdue 8 8 7 6 6 5 4 4 3 2 1 1
Total 675 623 570 515 467 406 350 294 236 t78 t20 60
I Repayment 60 60 60 50 60 60 60 60 60 60 60 60
t' Closing 615 553 509 456 407 346 290 233 t76 118 59 0
Balance
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ANNEXURE 12:PROJECTED CASH FLOW STATEMENT
,
Pnojgcted east Flow Statement
l
l Particularc 2012-13 2013-r4 2014-13 2015-16 2016-17
t Applications of Funds:
'
FixedAssetspurchase 2,726,000
I
t Increasein working Capital 78,313 69,363 14,768 t6,244 r7,869
j LoanPrincipalRepayment 250,967 426,464 495,020 574,596 666,953
I
CapitalWithdrawal 42,000 132,000 145,200 159,720 175,692
t
Total 3,097,290 621,826 654,987 750,560 860,514
t
t Sourcesof Funds:

t Capitalintroduced 312,000
i Termlnan from Bank 2,414,000
I
q Net Profit afterTax 347,334 1,024,402 1,227,617 1,448,337 l , 6 g 9 , 5 l 9
:
Depreciation
& Amortization 347,120 307,817 273,698 244,055 218,283
!
Total 3,420,454 1,332,219 1,501,315 1,692392 l,g07rg02
t
t Closing Cash Balance 323,175 1,027,569 1,873,896 2,815,727 3,863,015

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AI{NEXURE 13: FINAITICIAL BENCHMARKS -RATIO ANALYSIS
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, Ratio Formula
*
I Benefrt Cost Ratio PresentValue of DiscountedCash 1.60
*
InfloVPresent Value of DiscountedCash
* Outflow
2 BreakEvenPoint (Kgs) Fixed Cost(Revenue- Variable Cost) at project 8t7
l stabilizationstagei.e. 3'oyear

t 3 Net PresentValue (Rs) CashInflow -


PresentValueof Discounted l,640,079
PresentValueof Discounted
CashOutflow
'
4 PayBackPeriod(Without Periodat whichinitial investment
is fullv 2 Years
* Discounting) recovered 7 Months
t 5 DiscountedPayBack Periodat whichinitialinvestmentis fully 3 Years
Period recoveredcalculatedw.r.t.discounted cash 3 Months
' flows
l 6 Internal Rate of Return Rate at which Outflow equalto presentvalue of 34.21%
sum of future project Inflows
I 7 Debt ServiceCoverage
* Ratio r.99
DebtCover/ DebtService
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47

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ANNEXURE14:PROJECTIMPLEMENTATION SCHEDULE
,

, Sr. Stageof Implementation ProposedMonth of completion


No.
L
$ Completionof Civil Work -Aug-l}
Jqrt-lV
l 2 Installationof Machinerv -13 Sep-12
aqo
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a
a
J Commencementof economic SeP-12
..1 activitv J'o"tt'13
$
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: FersonribFDeails local unemployedyouth will get employmentopportunity
t through this project directly or indirectly.
I
Expectedemploymentgenerationthrough this project - I
l sunervisor-2 skilled labour 3 unskilledlahorrr& I salesman.

3 *r" I €Ai tb"L k 3 Unskill.*rl }qbeq, ovLc 1.;6.vrll'v1'


t l. Project is assumedto be operationalfor 7 monthsduring
fnst year ofits operationsand for 3 15 days eachdufing
, remainingyears
2. Depreciation& amortizationis provided as per the
, :i:,! r,
provisionsof the IncomeTax Act, 1961
t 3. Debtorsand creditorsare assumedto be at 50%o of salesand
50% of purchaseb duringone Mushroomlife cycle
!
respectively.
' - :\-
9 4. Subsidyis assumedto be includedin the term loan amount
and the sameis ignoredwhile calculatingintereston term loan.
a 5. Term loan to the extent of 75% of the project cos.tis
F
assumedto be availed from Bank with repaymentperiod of 56
n
5
months at interestrate of 15% p.a.
6. Provision for expensesmainly pertainsto provision for
* outstandingsalary& wagesfor one month. All other
uPErarrulal ExPsnsgs afg assurn€u [o otr Parq I
s due.
* 7. For calculatingBenefit Cost ratio, Net PresentValue and
f
DiscountedPaybackPeriod, discountingfactor of 15Yois
6 considered.
lf

rt Note: Projectdetailscompiled from information & explanationsprovided by the promoter.


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KiranAgro Park, Bhilai, Chhattisgarh
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