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Introduction OF PROJECT

• Name of the Project: SUSTAINABLE AGRO PRODUCTS LTD.

• Background of the Project: Mushroom is the fleshy, spore-


bearing fruiting body of a fungus, typically produced above ground on soil
or on its food source. The standard for the name "mushroom" is the
cultivated white button mushroom, Agaricus bisporus, hence the word
mushroom is most often applied to those fungi (Basidiomycota,
Agaricomycetes) that have a stem (stipe), a cap (pileus), and gills (lamellae,
sing. lamella) on the underside of the cap, just as do store-bought white
mushrooms.

True mushrooms typically look like umbrellas. They consist of a stalk


topped by a flat or cup-shaped cap. Their spores are produced on special
cells called basidia, located on the underside of the cap. The classes of fungi
whose spores are produced by basidia are called Basidiomycetes.

• Location of the project:


Village- Rahini,
Upzilla- Valuka,
Dist.Mymensingh, Bangladesh.

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• Technical Aspects:

• Location -
i. Area of land: 3.66 Acre
ii. Condition of land: (The Land is High or Low): The Area is a
flood frees Area. The land and water is suitable for Mushroom
culture. Prior to acquire for the mushroom farming the land was
agriculture and cultivatable. The Land is comparatively high land
& it is flood free zone. The project is 10km away from Mymensingh
District Head Quarter & 2 km away form Valuka Upazila.
Mymensingh-Dhaka highway is besides by the project site. Local
market is 1 kilometer away from the project site.

iii. Land Value: (Not exceeding 30% of total project cost):


Per Decimal Tk.45000.00 & Total value Tk.1.56 crore .

iv. Location and distance from nearby project : In this area


there is a great opportunity of Mushroom culture but there is no
such type of mother spawn-cum scientific mushroom culture
project in this area. Moreover there is no such type of mushroom
culture project in Mymensingh District. But large numbers of
farmers may cultivate mushroom in their own house & farms. So
the demand for Mushroom exists in this area.

• Infrastructure-

i. Communication (in detail): The project is well connected with


Local Bazar, Valuka Upazila, Mymensingh District/Divisional Town
and Dhaka City by road and by water-ways. The project is 10 km away
from Mymensingh District Head Quarter. Dhaka-Mymensingh

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highway is 3 besides by the project site and 2 km away from Valuka
Upazila. Local market is 2 kilometer away from the project site.

ii. Electricity (With Connecting and Required Load and source):


Electricity line exists in the project, Requirement will be 50
KW,REB.

iii. Water (with source and cost details): Own Source.

iv. Gas(With Source and Cost details): Not applicable (No Gas
Line)

v. Renewable energy: Adoptable in Future.

• Technology- ( Description including availability


and risk of the technology):

1. Significance of the Project: Mushrooms are


non-green fungal plants occurring seasonally all
over the world in various habitats varying from
plains to thick forests or green meadows to
roadside pathways and comprise a large
heterogeneous group having various shapes, sizes, appearance and
edibility. They are recognized as the alternate source of good quality
protein and are capable of producing the highest quantity of protein per
unit area and time from the worthless agro-wastes (Chadha and Sharma,
1995). Mushrooms are the source of extra ordinary power and virility and
are used in the preparation of many continental dishes. They are good
source of protein, vitamins and minerals (Khan et al., 1981) and contain
about 85-95% water, 3% protein, 4% carbohydrates, 0.1% fats and 1%
minerals and vitamins (Tewari, 1986). Mushrooms contain appreciable

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amount of potassium, phosphorus, copper and iron and low level of
calcium (Anderson and Feller, 1942). Mushroom protein is intermediate
between that of animal and vegetable (Kurtzman, 1976) and the amount of
niacin, pantothenic acid and biotin are of appreciable level (Subramanian,
1986). The detrimental cholesterol is absent in mushroom but necessary
ergosterol is present (Chadha and Sharma, 1995). The present nutritional
status of Bangladesh is a matter of great concern. Most of our people have
been suffering from malnutrition. Mushrooms can substantiate the
sufferings from malnutrition to some extent. Because they produce large
quantities in a short time and provide more protein per unit area than any
other crop (Gupta, 1986).

Mushrooms have medicinal properties like anti-cancerous, anti-cholesteral


and anti-tumorous activities and are useful against diabetes, ulcer and
lungs diseases (Quimio, 1976). Maitake (Grifola frondosa) and Shitake
(Lentinus edodes) mushrooms have been reported to inhibitory to AIDS
virus in USA and Japan (Namba, 1993). Pharmaceuticals are produced in
Japan from Lentinus, Coriolus, Schizophyllum and Ganoderma. Cosmetic
products and tonic beverage have also been produced in China from
Ganoderma (Chadha and Sharma, 1995).

The economy of Bangladesh is mainly agro-based. The country enjoys a


salubrious climate without the extremes of either summer or winter. Nearly
all the arable areas of the country have been brought under the plough and
further agricultural expansion is almost impossible. On the other hand the
unemployed population in our country is 2.2 million out of which 0.8
million is female (Anon., 2002). Mushroom cultivation is labor intensive
but land saving short duration crop, can be welcomed by the poor farmers
of Bangladesh, as it is a profitable agribusiness. The technology of artificial
cultivation of mushroom is somewhat recent innovation and incorporation
of this non-conventional crop in existing agricultural system can help in
improving the social as well as economic status of the small farmers.
Moreover, crop diversification and changes food habit is an urgent need to
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build up our national health. Mushroom cultivation does not compete with
other crops, can be grown in homestead with the active participation of
family members. The agricultural and other wastes can be used as
substrates. Thus it can be produced in large quantity within a short time,
provides more protein per unit area and can serves as income generating
source in unemployed sector.

Low cost materials like agricultural and other wastes, weeds and grasses
are available in Bangladesh, which have no proper utilization. The
production of rice straw is minimum 273 lak metric ton. The production of
straws of wheat and other crops is not negligible.

Cultivation of mushroom can be more profitable if value is added through


processing after harvest. Adding value to fresh mushrooms means either
developing processed products, such as a sauce, pickles, etc. or drying
mushrooms for sale in the off-season, when price is higher. A value-added
product can be sold to the consumer at higher
price. Drying shiitakes and other mushrooms
is another way to add value and avoid post
harvest loss and the low prices of the peak
season. The mushroom after harvest can be
marketed as flesh, canned, dried or made into powder or as a soup. Drying
and canning of mushroom is essential for market from one city to another
or for export purpose.

Considering its nutritional, medicinal and economic importance it is


important to establish a production and processing farm of mushroom.

2. Choosing Mushroom Species and varieties: There are thousands of


species of mushrooms throughout the world, out of them 2,500 species are
identified as edible and only 20 of them are popular. Different species and
varieties of mushrooms are cultivated commercially all over the world.
Mostly cultivated mushroom species is Button (Agaricus bisporus) which
is creamy white to light brown in color, smooth and round in appearance,

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various sizes from button to jumbo. Other commonly growing species are
Agaricus campestris (Meadow mushroom) and Agaricus rodmani.

SWOT

ANALYSIS

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• Strengths (Internal)

 Medicinal properties of mushrooms cause pharmaceutical companies to


buy mushrooms from suppliers.

 Mushroom cultivation is labor intensive but land saving. Our climate is


very suited for mushroom cultivation

 Mushroom cultivation does not compete with other crops, can be grown in
homestead with the active participation of family members.

 Natural Fertilizer, especially low cost materials like agricultural and other
wastes, weeds and grasses are readily available in Bangladesh mushroom
cultivation.

 Mushrooms are produced in large quantity within a short time. It provides


more protein per unit area and serves as income generating source in
unemployed sector.

 It is an innocent project. There will no risk to implement it. There will be


no objections from any corner of the society and project areas.

 Ability to withstand natural calamities because most of the works will be


done in confined areas. Mushroom cultivated in protected room, so natural
calamities may not cause harm to implement the project.

• Weaknesses (Internal)

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 Lack of skilled employees. Mycologists, horticulturists, biochemists, food
technologists and pharmacologists are required, and there is a shortage of
such professions for commercial projects such as ours.

 We plan to procure all equipment, instruments, glassware, chemicals form


the local market. Non availability of any material can significantly hamper
our project.

 Lack of uninterrupted power supply and diversion of fertilizer and


pesticide to rice farmers limits their supply to us.

 Mushrooms susceptible to disease and are attacked by many insects,


nematodes, fungal pathogens, bacteria and other organisms.

 In Bangladesh, comprehensive reports on pests and diseases of mushroom


are not available. However, similar pests and diseases mentioned above are
likely to be occurred in the country. So, comprehensive researches are
necessary on pest and diseases of mushrooms.

 The product of this project is very much sensitive to pests, diseases, etc. So the
project needs a close supervision to avoid the risks which increases costs.

• Opportunities (External)

 The present nutritional status of Bangladesh is a matter of great concern.


Most of our people have been suffering from malnutrition. Mushrooms can
substantiate the sufferings from malnutrition to some extent.

 In Bangladesh the unemployed population in our country is 2.2 million out


of which 0.8 million is female, which provides a huge pool of people as
labour force for mushroom cultivation.

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 The technology of artificial cultivation of mushroom is somewhat recent
innovation and incorporation of this non-conventional crop in existing
agricultural system can help in improving the social as well as economic
status of the small farmers.

 Cultivation of mushroom can be more profitable if value is added through


processing after harvest. Adding value to fresh mushrooms means either
developing processed products, such as a sauce, pickles, etc. or drying
mushrooms for sale in the off-season, when price is higher.

 A value-added product can be sold to the consumer at higher price.

 Drying mushrooms is another way to add value and avoid post harvest loss
and the low prices of the peak season.

 The mushroom after harvest can be marketed as flesh, canned, dried or


made into powder or as a soup. Drying and canning of mushroom is
essential for market from one city to another or for export purpose.

 To implement the project, mycologists, horticulturists, biochemists, food


technologists and pharmacologists are required. The proposed projects can
be supported National Mushroom Development and Extension Centre
(NMDEC), where horticulturists, biochemists, food technologists and
pharmacologists are available.

 There have been recently a lot of well-educated and experienced personnel in


this field in our country. In our country we currently have many institutes and
universities who are related with Mushroom culture research and education.

• Threats (External)

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 Potential for competing organizations to enter the mushroom cultivation
and processing industry.

 Potential for economic, political, social, natural, and environmental risks.


However, these risks may not appear during the implementation period of
the project.

 Successful implementation of the projects is dependent on availability of


fund. If fund is available in time it will be easier to implement the project in
time.

 Political risks such as hartal, transport strike, etc are major threats to the
quick transport of fresh mushrooms

 Climate change and drought is harmful for mushrooms as they require wet
damp weather for growth

 Attack of different insect pest and diseases is a major threat to the project.

Insect pests:

A variety of small fly and midge species are pests of mushrooms. The larvae
feed on the fungal mycelium in the compost, but may also tunnel into the
fruiting bodies. A range of mite species may affect the mushroom crop.
Some directly damage the fruiting bodies, some may attack the mycelium
and some mites are predatory on other mites, fly eggs, nematodes or
bacteria. Mite damage on the fruiting bodies often shows up as small
cavities in the stem and cap similar in appearance to bacterial pit disease.
Mycelium-eating mites can cause high yield losses.

Mites are very small and easily transported on clothing and tools.
Springtails are commonly associated with compost, and can damage the

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crop if present in high enough numbers. Slaters and millipedes may also
cause damage to the fruiting bodies.

Nematodes: Nematodes will cause a loss in yield and brown, watery


mushrooms, and in extreme cases soggy, smelly compost. Peat is a
common source for nematodes and should be treated before use.

Fungal diseases: Even though the mushroom itself is a fungus, it can in


turn be affected by a range of fungal pathogens. Some of the fugal
pathogens of mushrooms with the symptoms developed by them are listed
below:
1. Dactylium: White to pink cobweb-like fluffy mould.
2. Diehlomyces:A competing fungus which produces brain-shaped fruiting
bodies.
3. Fusarium: Mushrooms wither.
4. Mycogone: Dense white growth on gills.
5. Papulaspora: Brown plaster-like patches on casing.
6. Scopulariopsis: White plaster-like patches on casing.
7. Trichoderma: Dark green mould patches on casing spreading to lesions
on stems.
8. Verticillium: Brown irregular pitted areas on stems and caps.

Bacterial diseases: Pseudomonas (bacterial spot, bacterial or pit or


brown blotch), causes yellow to brown blotches on the cap which may
exude sticky residues. Early symptoms are similar to Verticillium.

Other diseases: A range of viral diseases attack mushrooms. Fruiting


bodies that are either noticeably elongated or flattened, or gradually
decreasing crops or flushes should be examined. If viral diseases are
suspected, professional advice on eradication should be sought.

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Production Flow Chart:

THE PROCESS OF PRODUCTION IS SHOWN IN FLOW-


CHART:

MUSHROOMS HATCHERY (Mushroom)

THE PROCESS OF PRODUCTION IS SHOWN IN FLOW-CHART:

HATCHERY (MUSHROOMS)

Water Collection of Hatching tank 24-48 hrs. Preserve in


treatment Barred Hatching
20 days mushrooms

Larvae rearing
Nursery Post Larvae
tank Larvae Collection
10 days
30 days

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PROCESS OF NURSERY

Acclimatization in Pond

Feeding, Fertilization,
Pond Preparation Stocking of PL Aeration and water
quality control

Stocking Pond Juvenile PL Nursery


60 days

MARKETING AND SALES

Products:

Annual Capacity Total


Production Capacity Unit Rate
Expansion Revenue
Mushrooms Kg. 300.0 144000 43200
Total 144000 43200

SALES ESTIMATE

Year -1 Year -2 Year -3 Year -4 Year -5

Capacity Utilization 75% 80% 80% 85% 90%


Revenue at rated 43200 43200 43200 43200 43200

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Capacity
Revenue at Utilized
Capacity 32400 34560 34560 36720 38880
Add: Opening WIP 0 2160 2448 2467 2612
Total Estimated
Production 32400 36720 37008 39187 41492
Less: Closing WIP 2160 2448 2467 2612 2766
Actual Production 30240 34272 34541 36575 38726
Add: Opening FG 0 504 580 585 619
Goods Available for Sales 30240 34776 35120 37160 39346
Less: Closing FG 504 580 585 619 656
Revenue on Sales 29736 34196 34535 36541 38690
Total Revenue 29736 34196 34535 36541 38690

Marketing Plan

• Products / Services:

Mushroom plays a major role in nutrition, employment, foreign exchange


earning areas of the economy of Bangladesh. Mushroom alone supplies
balanced protein and low-income people may directly employed by this sub
sector, another a large number of people indirectly earn their livelihood out
of activities related to mushroom.
SUSTAINABLE AGRO PRODUCTS LTD. is a proposed scientific
Mushroom spawn cum culture farm. The product mix of the proposed
project at 100% capacity is given below:

Annual Capacity Total


Production Capacity Unit Rate
Expansion Revenue
Mushrooms Kg. 300.0 144000 43200
Total 144000 43200

• Usages of the Products/ Services:

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The Mushrooms have a huge local & International market demand. It is a
special type of project which aims at production and marketing of
Mushrooms and mushroom is the source of vital protein food products,
which contributes significantly towards the national health.
It is well-known that White Button Mushroom is a highly nutritious and
delicious food item. It has high demand in G-8 countries as well as
developed countries. The people of the developed countries were not
welling to grow more mushroom due to the fact that the cultivation system
is dirty and unhealthy. That’s why opportunity would be better in the
developing countries like Bangladesh.
Bangladesh has enough raw materials, cheap labor and other facilities
which could be used for the production of mushroom at low cost other than
any country of the world.
Moreover, Bangladesh has enough demand of white button mushroom. In
Dhaka only, every Chinese restaurant, fast food shop, international hotel
and different super markets have daily requirement of mushroom which is
about 2000 kg/day. It could be increased if we ensure the supply of right
quality of mushroom and aware the public about the use supply of right
quality of mushroom and aware the public about the use of mushroom
through mass media.
Present project is 100% export oriented project. This item has no quota for
Bangladesh in its entry into international market like USA, so there is no
problem of marketing abroad or in the local market.

• User of the Products:

Spawn is essentially a mushroom "starter" culture used to inoculate the


final mushroom-producing cultures. Every farmer, whoever produces
mushroom requires collecting spawn for spawn laboratory. Like end
mushroom production, Spawn can not be produced in very small scale.
Moreover, spawn production lab is very inadequate comparing with
current mushroom culture demand in this country. Most of the lab cannot

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deliver within one month after order due to huge pressure and limited
capacity. There is no Laboratory in Khulna and Rajshahi Division at this
moment. Hence, the market requires more entrepreneurs to set up spawn
production lab to meet the market demand and help spawn extension in
the country.
This project will produce 50,000 mushroom mother spawn every month to
meet the requirement of its own cultivation demand and surrounded
farmers demand.
Dry Mushroom: Raw mushroom is perishable in nature. Most of the bulk
volume customers do not prefer to buy raw mushroom for preserving issue.
Hence, the project will be equipped to dry and pack mushroom after every
day raw mushroom sale. Dry and packed mushroom will be easier to sale,
transport & export.
Used Mushroom Spawn: After every production, there will be a bulk
volume of used mushroom spawn which will be sold to natural fertilizer
factories and general farmers.

(1) Dry Mushroom: Government officially declared demand statistics is


1000 Ton per month. Which is being supplied by china mostly at these
years? Some specific breakdown is given below.
(a) Retail Market Consumption : 6,000 KG Per Month
(b) Pharmaceuticals: 12,000 KG Per Month
(c) Chinese Restaurants & Star Hotels:
(d) Food Industries : Packet Soup
(e) Beauty Industry: Uptan
(2) Used Mushroom Spawn:
(a) End farmer
Natural fertilizer factories

• Target Market:

The export market is the focus area for the promotion of mushroom
marketing. In the local markets also, it has great demand in Bangladesh.
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This project will provide first initiative for white button mushroom
production. So after analysis of local and export demand, it is found
appropriate to start this mushroom project.
The products of the company are Mushroom’s Spawn and Raw
Mushrooms. A portion of the product would be sold at project site to the
wholesalers. The rest of the products will be supplied by company’s own
transport to the exporters. Bangladesh may earn a huge amount of foreign
exchange every year by exporting mushrooms. The market for this product
initially confined to local market & then to few west European countries.
However, with the passage of time, Japan and USA may have emerged as
the two major importers of the products. This has been made possible
because of constant efforts in the area of market diversification and
product development. Attempts are under way to introduce our products in
few markets like Canada, Australia etc.
• Demand Situation and Demand Forecasting:

The demand for Mushrooms is becoming gradually intensified because of


awareness of people’s intake of protein food products, population
explosion, increase of level of education and destruction of rural mushroom
production. In our country there exists an acute protein deficiency mainly
due to insufficient supply of protein food products.
White button mushroom is the leader of the mushroom product. It has
high demand as food item throughout the world. The project is situated at
Bishia Kuri Bari of Gazipur district. It is very near to Dhaka city and Zia
International Airport. The entrepreneurs are confident of at least 100% of
the product could be sold in USA market. It is already mentioned that Mr.
Neo G Mendes, Chairman of the company is a renowned businessman
having their office at USA to operate with possible importers.
There is huge demand of white button mushroom in USA market and there
is no chance of dumping of his product. Moreover, it has high demand in
local market. That’s why; the sponsor desired to set-up this type of industry
in Bangladesh. According to their estimation, the capacity of this project is

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insignificant compared to the actual demand in local market as well as
international market.
Moreover, the production cost of the project will be cheaper due to the
advantages given by the Govt. of Bangladesh to export oriented industries
as well as for cheap labor, utilities and other services than other countries
in the world.
Therefore, other countries will not able to supply fresh or can mushroom at
a competitive price at such good quality like Bangladesh.
The demand for mushroom rapidly increasing day by day in the global
market. There are three major, markets in the world, the EC, Japan and
USA. Consumption of mushroom products in the EC market has been
growing faster than the USA and Japan.

• Supply Situation and Supply Forecasting:

Due to non- availability of reliable and organized data on the mushroom


sector, it is very difficult to assess the total installed capacity and rear
present production of mushroom in Bangladesh. However, on the basis of
various alternative information an attempt has been made to make an
estimate. Various public sector Commercial Banks and financing
institution provide loan for the setting up of mushroom farms under SME
scheme. Moreover, sanctioned capacity does not correspond with the actual
production capacity. Besides, quite a good number of mushroom farms
have been set up without any bank loan. Therefore, information furnished
does not reflect a complete situation.

The proposed project will be supplied mushroom spawn and raw


mushrooms in the market.
(3) Mushroom Spawn:
(a) General Mushroom Farmers: 360,000 Government aided end
farmers in surrounded district. In every district government is
extending helps to develop more farmers every year.

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(b) Commercial Mushroom Farmers:
(i) Mymensingh District: More than 85 Existing Commercial
Mushroom Farms.
(ii) Pubna District: More than 50 Existing Commercial
Mushroom Farms.
(iii) Rajbari District:: More than 96 Existing Commercial
Mushroom Farms.
(iv) Jhenaidah District: More than 75 Existing Commercial
Mushroom Farms.
(v) Jessor District: More than 550 Existing Commercial
Mushroom Farms.
• Demand Supply gap:
The supply of mushrooms spawn and mushrooms are so poor as to cope
with the demand thereof mainly because of in sufficient production as well
as huge international market demand and the rapid growth of population
of the country. As a result, there prevails a huge demand supply gap
(Supply deficiency) of the item in the country as a whole. So it is expected
that the project, if implemented, will be able to encroach a considerable
market share.

• Competition and Competitors:


Quality, price and delivery period are three important factors, which will
influence the local and foreign buyers to purchase the products of the
industry. The quality of the mushroom is dependent on the spawn (seed)
quality and technical management of the crop. The sponsor has highly
experienced local technical hand capable of meeting the demand of the
importing country. There are foreign experts for mushroom industry to
ensure the quality of the products.
The other factors very important and timely shipment and competitive
pricing. Our production program will ensure timely shipment and the
pricing will be as much as low than any other supplier.

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Since Enem-Pmni Companies have sister concern like Orient Overseas
Container Line and Dragon Airlines the transportation and shipment
abroad will be more convenient and schedule could be maintained.
For maintaining international standard and quality, the project have
quality control unit. This unit has experienced qualified quality control
personnel. The analyzed HACCP and other demand of the exporting
countries.

Business Strategy

• Pricing:

Export price of mushrooms mainly depends on its size, quality and also on
international market situation. The average price of mushrooms exports
were collected for three major markets- Japan, USA and EUC. The prices
are approximations to national export prices per Kg. The mushrooms
prices in the Japanese markets are substantially higher with larger volume
of import of mushrooms than the USA and EU. Average export price of
mushrooms/mushrooms from Bangladesh in Japan was 5 US $ per Kg and
in USA was 4.5 US $ per Kg. In our country prices of mushrooms /
mushrooms vary from place to place. There is also high variation in price at
different periods of the year depending on the supply position in the
market price of mushrooms of the organized farm also differs to some
extent from those available in the market of rural house holds. The prices
of the proposed project will be fixed in such a way that it should be lower

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than those of the other in the market. The price must be competitive for
local market.

Conservatively the sales price of the produce has been estimated below:
• Fresh Mushroom
a. XL size per kg 350.00 or US Dollar 5.00
b. L size per kg 320.00 or US Dollar 4.8
c. M size per kg 300.00 or US Dollar 4.75
d. S size per kg 280.00 or US Dollar 4.00

• Can Mushroom
a. Medium size can mushroom 250gm can Tk 75.00
b. Small size can mushroom 250gm can Tk. 65.00

• Distribution Channel

The sponsors will appoint/ engage distributor / agents to sell the project’s
mushrooms spawn and mushrooms to the farmers and mushrooms
projects and matured mushrooms to the wholesalers/ exporters. The
project will also have its own sales centers to distribute the products to the
mushrooms farmers, mushrooms projects, consumers and wholesalers.
Provision will also be kept to sell the products directly from the project site;
especially the mushrooms larvae and mushrooms fry to the mushrooms/
mushrooms farmers and mushrooms culture projects.

PROMOTIONAL PLAN

The project will sell the product at project site for the local marketing. One survey
was made by Bangladesh Agriculture Research Council (BRAC) on 1998-99.

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Dhaka city dwellers are eagerly searching quality & reliable Button mushroom
within their near market place & super market. That’s why advertisement is
necessary for the promotion of sale in the local market. For the export market, the
Chairman and MD of Enem-Omni Companies has huge experience in export of
different product to foreign market. They have personal contract with mushroom
buyers in Europe and USA. They will convince the foreign buyers for issuing
purchase order for export. Moreover, in Singapore, Dubai, Abudhabi, Saudi
Arabia and other Middle East country. There is huge demand of white button
mushroom. If we look for those markets there is enough opportunity of export.

In the local market (Dhaka city), there is opportunity of marketing for


mushroom,

1. 250 Chinese restaurant @ 20 kg/day = 5,000


kg
2. 50 Fast food shop and Piza House@ 20kg/day = 1,000 kg
3. 20 Super market @ 50 kg/day = 1,000 kg
4. 2 International hotels @ 50 kg/day = 100
kg
5. 10 Prominent kacha bazar @ 50 kg/day = 500 kg
6. Bangladesh Biman Catering Service @ 50 kg/day = 50 kg
7. Chittagong port city @ 500 kg/day = 500
kg
8. Miscellaneous other suppliers @ 100 kg/day = 100 kg
.................................................
TOTAL= 8,250 kg

Every day 8,250 kg fresh mushroom can be sold in Dhaka and Chittagong
city.
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For the sales promotion 3% cost would kept for advertisement.

Financial Budget

• Assumption for financial analysis:

Work in Process 20 Days


Finished Goods 5 Days
Local Raw & Packaging Materials 60 Days
Imported Raw & Packaging Materials 60 Days
Stores & Spares 10 Days
Receivable at Cost 30 Days
Salary, Wage & other exp 30 Days
Advanced Lease Rental 0 Month
Construction Period 6 Month
Forecasting 5 Year
Project Life 15 Year
Income Tax Holiday 7 Year
Amortization of Preliminary Expenses 5 Year
Workers Profit Participation Fund 5.00%
Income Tax 35.00%
Tax Holiday Reserve (Govt Bond/Industry) 10.00%
Income Rate of Short Term Investment 8.00%

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Year Plan Year -1 Year -2 Year -3 Year -4 Year
-5
Capacity Utilized 75% 80% 80% 85% 90%
Repairing and Maintenance 0.50% 0.75% 1.00% 1.50% 2.00%
of Building
Repairing and Maintenance 0.50% 0.75% 1.00% 1.50% 2.00%
of Machineries
Storage and Spares of 0.50% 0.75% 1.00% 1.50% 2.00%
Machineries
Rent, Tax & Insurance (% of 1.00% 1.00% 1.00% 1.00% 1.00%
Fixed Cost)
Dividend on Paid-up Capital 10.00% 10.00% 12.00% 12.00% 12.00%

• Cost of the project and means of finance

• Cost of the Project:

Project Cost Estimation


Incurre To be Total
ITEM d up to incurre Cost
30/09/ d
03

Land & Land 0 20717 20717


Development Cost
Building & Civil Works 0 25348 25348
Cost
Local Plant and 0 14800 14800
Machineries
Erection,Installation 0 592 592
Furniture & Fixture 0 474 474
Office Equipment's 0 432 432
Vehicles 0 3000 3000
Eng, Pat, Draw, 0 200 200
Excavation etc.
Preliminary& IPO 0 850 850
Expenses
Bond purchase 0 65 65
Contingencies 0 507 507
25
6698
Total Fixed Cost 0 66984 4

Net Working Capital 0 2603 2603


6958
Total Project Cost 0 69587 7

• Means of Finance:

Incurr To be Total
ed up incurr Cost
to ed
30/06/
Equity :- 08
Sponsor(Paid-up
Capital) 0 35490 35490
EEF Bangladesh 0 34098 34098
6958
Total Equity 0 69587 7
Total Means of 6958
Finance 0 69587 7

• Projected income statement:

Year Year Year Year Year


-1 -2 -3 -4 -5

Capacity Utilization 75% 80% 80% 85% 90%


3869
Sales 29736 34196 34535 36541 0
1878
Cost of Goods sold 14296 15975 16734 17737 0
1544 1822 1780 1880 1991
Gross Profit 0 1 1 3 0
Operating Expense 3350 3590 3802 4048 4316
Other Income 503 536 536 570 603

26
1259 1516 1453 1532 1619
Operating Profit 2 8 5 5 8
Financial Expenses 700 420 0 0 0
Preliminery and Pre-operation Expenses 17
Write-off 170 170 170 170 0
Financial and Other Expenses 870 590 170 170 170
1172 1457 1436 1515 1602
Profit before Other Income 2 8 5 5 8
Income From Short Term
Investment 0 0 240 880 1520
1172 1457 1460 1603 1754
Income Before WPP 2 8 5 5 8
Workers Perticipation Fund 586 729 730 802 877
Profit after Workers Profit 1113 1384 1387 1523 1667
Perticipation Fund 6 9 4 3 0
Income Tax 0 0 0 0 0
Tax Holiday Reserve 1114 1385 1387 1523 1667
Profit after Income 1002 1246 1248 1371 1500
Tax/Reserve 3 4 7 0 3
Dividend 6959 6959 8350 8350 8350
Retained Earnings 3064 5505 4137 5359 6653
1806
Last Year Balance 0 3064 8569 12706 5
1270 1806 2471
Cumulative Rtained Earnings 3064 8569 6 5 8
Ratios (%):-
51.92 53.28 51.54 51.46 51.46
Gross Profit to Sales % % % % %
42.35 44.35 42.09 41.94 41.87
Operating Profit to Sales % % % % %
33.71 36.45 36.16 37.52 38.78
Income after tax to Sales % % % % %
Net Profit to Paid-up
Capital:
Before Income Tax/Tax Holiday 16.00 19.90 19.94 21.89 23.96
Reserve % % % % %
After Income Tax/Tax Holiday 14.40 17.91 17.94 19.70 21.56
Reserve % % % % %
10.00 10.00 12.00 12.00 12.00
Dividend % % % % %
69.43 55.83 66.87 60.91 55.66
Dividend pay out % % % % %

27
• Cost of service/goods sold:
Year -1 Year -2 Year -3 Year -4 Year -5
Capacity Utilization 75% 80% 80% 85% 90%
Raw Materials at Rated
Capacity 9136 9136 9136 9136 9136
Raw Materials at Utilized
Capacity 6852 7308 7308 7765 8222
Labour 3240 3240 3564 3726 3888
Overhead 1946 1946 2386 2792 3217
Depreciation 3540 3540 3540 3540 3540
1557 1603 1679 1782 1886
Total 7 4 8 3 7
Add: Opening WIP 0 1038 1069 1120 1188
1557 1707 1786 1894 2005
Total WIP 7 2 7 3 5
Less: Clossing WIP 1038 1069 1120 1188 1258
1453 1600 1674 1775 1879
Total Work Cost 9 3 7 4 7
Add: Opening FG 0 242 271 284 301
Goods Available for 1453 1624 1701 1803 1909
sales 9 6 8 8 8
Less: Closing FG 242 271 284 301 318

1429 1597 1673 1773 1878


Cost of the Goods Sold 6 5 4 7 0

• Raw and Packing Material Cost:

Compost Un Amount(0
preparation it Quantity Rate 00)
Rice/ Wheat Straw Kg 400000 5.00 2000
Poultry Straw Kg 225000 3.00 675
Calcium Ammonia Kg 2500 10.00 25
Super Phosphate Kg 1250 14.00 18
Wheat bran Kg 2000 10.00 20
Gypsum Kg 21000 5.00 105
Cypermathi Kg 2400 120.00 288
Casing Soil
Preparation Kg 450000 0.50 225
Raw materials for
Spawn Kg 0 0.00 0
Wheat Kg 120000 10.00 1200
Seed Kg 12000 100.00 1200
Post harvest
materials Kg 0 0.00 0
28
Can with lid(250
gm/can) nos 576000 4.00 2304
Cartoon nos 28800 20.00 576
Others
Veg. Seeds, Catle 500000.
etc. L/S 1 00 500
Total :- 9136

• Labor Cost:

Name of the Post Propos Total Rate Total


ed Post per Salary
Post Month per
Annum
Factory Manager 1 1 25000 300
Mushrooms Expart 1 1 15000 180
Deputy Manager 1 1 15000 180
Manager ( Technical) 1 1 10000 120
Sub-Assistance
Engineer 1 1 6000 72
Supervisor 2 2 5000 120
Lab assistant 2 2 5000 120
Can Asstt. 2 2 5000 120
Post harvest Asstt. 2 2 4500 108
Work Asstt. 4 4 4500 216
Driver 2 2 4500 108
Guard 3 3 3000 108
Skilled Labour 4 4 3000 144
Un-Skilled 8 8 2500 240
Total 34 34 2136

Assumption :-
Annual Wages
Increment 5%
Fringe Benefit 35%
Bonus 2

Item Year Year Year Year Year


-1 -2 -3 -4 -5

29
Basic 2136 2136 2136 2136 2136
Increment 0 107 214 320 427
Fringe Benefit 748 785 822 860 897
Bonus 356 374 392 409 427
Total: 3240 3240 3564 3726 3888

• Over head Cost (Power, Fuel, Water,


Maintenance, Depreciation etc.)

• Overhead Expanse

Year -1 Year -2 Year -3 Year Year


-4 -5
Repair & 127 190 253 380 507
Maintenance
of Building
Repair & 74 111 148 222 296
Maintenance
of Machineries
Storage & 74 111 148 222 296
Spares
Rent, Tax & 670 670 670 670 670
Insurance
Utilities 801 854 854 907 960
Other 200 250 313 391 488
Manufacturing
Overhead
Total: 1946 1946 2386 2792 3217

• Utilities

Item Year Year Year Year Year


-1 -2 -3 -4 -5
70% 75% 80% 85% 90%
Electricity 345 368 368 390 413
Fuel &
Lubricant 456 486 486 517 547
Total : 801 854 854 907 960

• Fuel & Lubricant

30
Item Unit Rate After Tota
BMRE l
Quanti Cost
ty
Diesel Liter 42.00 2500 55
Grease kg 300.00 500 100
Lubricant Oil Liter 80.00 1000 60
Kerosene Oil Liter 38.00 2250 45
Petrol Liter 60.00 8000 280
Transformer
Oil Liter 35.00 500 10
Waste Cotton Kg 28.00 1000 18
Soap/Deterge
nt Kg 40.00 1000 40
Total: 608

• Depreciation

Assets After Rate Year Year Year Year Year


BMRE -1 -2 -3 -4 -5
Value
Building 25348 5.00% 1267 1267 1267 1267 1267
10.00
Machineries 15392 % 1539 1539 1539 1539 1539
Office 20.00
Equipment 432 % 86 86 86 86 86
Furniture & 10.00
Fixture 474 % 47 47 47 47 47
20.00
Vehicles 3000 % 600 600 600 600 600
354 354
Total: 0 3540 3540 0 3540

• General, administrative and selling expenses:

31
Year Year Year Year
Item Year -1 -2 -3 -4 -5
Administrative
Expenses 2503 2628 2753 2878 3003
General Expenses 550 620 704 805 926
Selling Expenses 297 342 345 365 387
Total: 3350 3590 3802 4048 4316

• Break-even analysis:

Taka
in
'000'
1) Revenue excluding other
income at 5 th Year 38690
Capacity Utilization 90%

Item TotaL Variab Fixed


Cost le Cost Cost
Raw and packaing Materials 8222 8222 0
Wages & Labour 3888 2916 972
Stores & Spares 296 207 89
Repair & Maintenance 803 241 562
Water, Power, Fuel & Lubricant 960 672 288
Rent, Tax & Insurance 670 0 670
Administrative & General 2750
Expenses 3929 1179
Selling Expenses 387 387 0
Loan Interest 0 0 0
Lease Rental 0 0 0
Depreciation 3540 0 3540
Write-Off 170 0 170
Workers Profit Participation Fund 877 877 0
Other Overhead Expenses 488 244 244
Total 24230 14945 9285

32
P/V Ratio = {(Sales-Variable
Cost)/Sales} = 0.6137
Break Even Sales =(Fixed
Cost)/PV Ratio) = 151.29 Lakhs
Break Even Capacity of
Operation:
Utilize
d Capacity 39.10 %
Rated
Capacity 35.02 %

• Cash-flow statement:

For the Period Ended Construction Year -1 Year -2 Year -3 Year -4 Year -5
Period

SOURCE OF FUND

Fund Generated for Operation:


Operating Profit 0 12592 15168 14535 15325 16198
Add: Back Depreciation 0 3540 3540 3540 3540 3540
Total Fund From Operation 0 16133 18708 18075 18865 19738
Income From Short Term
Investment 0 0 0 240 880 1520
Paid-up Capital: Sponsors 35490 0 0 0 0 0
Public Issue/Bridging Loan 34097.7782 0 0 0 0 0
Short Term Bank Loan 5000 0 0 0 0 0
Total Source of Fund 74587 16133 18708 18315 19745 21258

APPLICATION OF FUND:
Investment in Fixed Assets 66069 0 0 0 0 0
Preliminary & Share Issue Expenses 850 0 0 0 0 0

33
Security Deposit 65 0 0 0 0 0
Repayment of Loan:
Short Term Bank Loan 0 2000 3000 0 0 0
Account Payable 0 10000 2645 0 0 0
Repayment of Interest on:
Short Term Bank Loan 0 700 420 0 0 0
Increase in Current Assets 3037 1000 224 173 204 210
Payment of Dividend 0 0 6959 6959 8350 8350
Short Term Investments 0 0 3000 8000 8000 8000
Total Application of Fund 70021 13700 16248 15132 16555 16560

Cash Surplus/(Deficit) for the Year 4566 2433 2460 3183 3191 4698
Cash Balance Beginning of the Year 0 4566 6999 9459 12643 15833
Cash Balance End of the Year 4566 6999 9459 12643 15833 20531

• Projected balance sheet:

As the Clossing day of Construction Year Year Year -3 Year Year -5


Period -1 -2 -4
Year-0
ASSETS:
Current Assets
Cash & Bank Balance 4566 6999 9459 12643 15833 20531
Short Term Investment 0 0 3000 11000 19000 27000
Work in Process (WIP) 1038 1038 1069 1120 1188 1258
Finished Goods (FG) 242 242 267 279 296 313
Storage & Spares and Others 2 2 4 5 7 10
Receivable 1430 1430 1598 1673 1774 1878
Slarary, Wage & other exp 324 324 324 356 373 389
Others 0 1000 1000 1000 1000 1000
Total Current Assets 7603 11036 16720 28076 39471 52378

Fixed Assets at Cost 66069 66069 66069 66069 66069 66069


Less: Accumulated Depreciation 0 3540 7081 10621 14161 17702
Net Fixed Assets 66069 62529 58989 55448 51908 48368

34
Other Assets
Preliminery Share Issue Expense 850 680 510 340 170 0
Security Deposit 65 65 65 65 65 65
Total Other Assets 915 745 575 405 235 65
TOTAL ASSETS 74587 74310 76284 83930 91614 100811
LIABILITIES & EQUITY:
Current Liabilities
Short Term Bank Loan 5000 3000 0 0 0 0
Workers Profit Participation Fund 0 586 1315 2045 2847 3724
Account Payable 0 -10000 -12645 -12645 -12645 -12645
Tax Holiday Reserve 0 1114 2499 3886 5409 7076
Dividends Payable 0 6959 6959 8350 8350 8350
Total Current Liabilities 5000 1658 -1873 1637 3962 6506
Equity:
Paid-up Capital 35490 69587 69587 69587 69587 69587
EEF Bangladesh 34098 0 0 0 0 0
Retained Profit 0 3064 8569 12706 18065 24718
Total Equity & Reserve 69587 72651 78156 82293 87652 94305

TOTAL LIABILITIES & EQUITY 74587 74310 76284 83930 91614 100811

Ratios:-
Current ratio 1.52 6.65 -8.93 17.15 9.96 8.05
Value per Share 196.08 104.40 112.31 118.26 125.96 135.52
Debts / Equity 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

• Ratio analysis:

Ratios (%):- Year -1 Year -2 Year -3 Year -4 Year -5


Gross Profit to Sales 51.92% 53.28% 51.54% 51.46% 51.46%
Operating Profit to Sales 42.35% 44.35% 42.09% 41.94% 41.87%
Income after tax to Sales 33.71% 36.45% 36.16% 37.52% 38.78%
Net Profit to Paid-up Capital:
Before Income Tax/Tax Holiday Reserve 16.00% 19.90% 19.94% 21.89% 23.96%
After Income Tax/Tax Holiday Reserve 14.40% 17.91% 17.94% 19.70% 21.56%
Dividend 10.00% 10.00% 12.00% 12.00% 12.00%
Dividend pay out 69.43% 55.83% 66.87% 60.91% 55.66%

Ratios:- Const. Year -1 Year -2 Year -3 Year -4 Year -5


Current ratio 1.52 6.65 -8.93 17.15 9.96 8.05
Value per Share 196.08 104.40 112.31 118.26 125.96 135.52
Debts / Equity 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

35
36