BANKABLE PROJECT PROPOSAL

ON
MUSHROOM & SPAWN PRODUCTION UNIT
(With an Investment of Rs. 20,00,000/-)

Mushrooms have long been appreciated due to their taste, delicacy as well as nutritional and medicinal
properties. They are the answer to the protein malnutrition and save for the food as well as economic
security of people. Availability of healthy and quality spawn (mushroom seed) is an important factor for
successful mushroom cultivation. Preparation of spawn is a sophisticated scientific process which requires a
specially constructed laboratory housing some equipment, furniture, glassware, chemicals and accessories.
The required training on spawn production is given by OUAT, Bhubaneswar. The spawn unit set up in a
particular place can carter to the needs of the mushroom growers in a cluster of villages in the locality. The
Spawn production unit should also have a mushroom growing unit of its own to test the yield potential of its
own spawn as well as to demonstrate the cultivation technology to the aspiring growers.

OBJECTIVE-

1. To produce 25000 no. of spawn( each spawn bottle- 200 g) per month @ 1000/day assuming 25
working days in a month
2. To generate an income of Rs. 1,19,000/- per month (Rs. 50,000/- per month from sale of spawn +
Rs. 69,167/- from sale of mushroom)

REQUIREMENT FOR SPAWN UNIT

A. LAND AND BUILDING-

Four rooms will be constructed for the spawn production unit.
Inoculation Chamber - will be used for mycelial multiplication/putting mushroom mycelia in the sterilized
substrate under strict aseptic condition. The important equipment and accessories inside this room are
laminar air flow machine and ultraviolet light.
Incubation Chamber- will be utilized for keeping the growing mycelia under required temperature and
humidity conditions. The inoculated cultures or spawn bottles are kept inside this room in racks.
Media Room-cum- office room-” is for preparing the media/substrate for preparation of cultures.
Store room- is for keeping the materials used for spawn production

PLAN OF SPAWN LAB

ACSSC, OUAT[Type text] Page 1

 8' 10'
4' 7'

Anteroom
11'
Inoculation Incubation
Chamber Chamber Media Room

Total plinth area of spawn lab= 25’ X 15’= 375 sq ft

Inoculation chamber= 11’ X 7’= 77 sq ft
Anteroom= 4’ X 7’= 28 sq ft
Incubation chamber= 15’ X 8’= 120 sq ft
Media Room-cum office room= 10’ X 10’= 100 sq ft
Store Room= 10’ X 5’= 50 sq ft

B. EQUIPMENT/ MACHINERIES AND ACCESSORIES

1. Autoclave- To sterilize the media in culture tubes and wheat medium in spawn bottle
2. Laminar Air flow machine- For maintaining aseptic/ germ free condition inside inoculation
chamber
3. Refrigerator- To keep the cultures and media for longer period. Fresh mushroomS can also be
stored
4. Furniture- Iron racks for keeping spawn bottles, Table with stools
5. Accessories-
Weighing balance- for weighing chemicals
LPG stove with cylinder- To boil wheat and to prepare culture media
6. Glassware and chemicals-
Culture tubes- Borosil make culture tubes required to raise and maintain pure mushroom
cultures
Glass bottles- used as containers of mushroom spawn. Alternatively heat resistant
polypropylene bottles/ pouches can be used
Measuring cylinder- used for measuring water during media preparation
Inoculation needle- required to transfer mushroom mycelia to culture tubes and spawn substrate
Plastic baskets- Heat resistant plastic baskets/ wire baskets are used to keep the media containing culture
tubes inside autoclave for sterilization
Dextrose-used for preparation of PDA, a medium for culturing the mushroom mycelia
Agar-agar- Prepared from see weeds, it is used for solidifying the PDA medium
Formaldehyde- Used for fumigation of inoculation and incubation chambers to maintain germ free condition
Rectified spirit- Tu fuel the spirit lamp and sterilizarion og inoculation needle and hands
Calcium carbonate- used for mixing in the boiled wheat grains to increase alkalinity in the culture medium
Wheat- used as a base material for mushroom spawn
Non- absorbent cotton- used to plug the mouth of the spawn container
Butter paper and rubber band- the mouth of spawn bottle is wrapped with butter paper and tightly secured by
the rubber band
Glass marking pencil-used to mark the mushroom species, date of preparation of spawn on the bottle

ACTION PLAN
ACSSC, OUAT[Type text] Page 2
 1. The project can be set up either from personal fund or by the fund from any financial
agency
2. Construction of the building should be completed within six months with electricity
connection and water supply
3. Purchase of equipment and machineries with required accessories along with the raw
materials are to be purchased within one month after completion of the civil work
4. The entrepreneur must be trained on Mushroom Spawn Production at Tropical Mushroom
Research and Training, Department of Plant Pathology, College of Agriculture, OUAT,
Bhubaneswar- 751003
5. Spawn production will start after setting up the spawn unit and purchase of required
materials

BUDGET
A. FIXED COST FOR SPAWN UNIT

Sl. No. Particulars Size/No./Quantity Rate(Rs.) Amount (Rs.)

1 Four room spawn unit 25’ X 15’= 375 sq - 6,00,000
ft
2 Electrically operated autoclave 2 1.10,000 2,20,000
3 Submersible pump with boring 1 1,00,000 1,00,000

4 Laminar Air Flow 1 1,20,000 1,20,000

5 Frost free Refigerator 1 20,000 20,000

6 Ultraviolet Light 1 1,500 1,500

7 Culture tube 200 20 4,000

8 Measuring Cylinder 2 250 500

9 Weighing Balance 2 1,250 2,500

10 Inoculation needle 5 100 500

11 Plastic Wire basket 5 100 500

12 LPG stove with Gas 2 cylinder 6,000 6,000

13 Furniture- 15,000

Iron racks 4

ACSSC, OUAT[Type text] Page 3

 Table(small) 1

Table (long) 1

Stools and chair 4

14 Utensils 9,500

Big dekchi 4

Small dekchi2 2

Big spoon 4

TOTAL 11,00,000

B. RECURRING COST FOR SPAWN UNIT FOR ONE MONTH

Sl. No. Particulars Size/No./Quantity Rate(Rs.) Amount(Rs.)

1 Glass bottles for spawn 30,000 2 60,000

2 Non-absorbent cotton for 25000 125 bundles 140 17,500

bottle and also for culture tubes

3 Wheat grains for 25000 bottles 4500 kg 21 94,500

4 Calcium carbonate @ 20 g/kg of 90 Kg 15 1,350

wheat

5 Butter paper for 25,000 bottles 30 quire 35 1,050

6 Rubber band 10 kg 60 600

7 Dextrose 200 g 125/500g pack 150

8 Agar agar 200 g 3500/500 g 1,400

pack

9 Potato@ 200g/litre=10 lit X 200g=2 2kg 10 20

kg

10 Ambistryn 1 file/lite 10 files 10 100

11 Labour @ 3/day 90 200/day 18,000

12 Electricity 10,000

13 Misc 4.670

14 TOTAL 2,00,000

ACSSC, OUAT[Type text] Page 4

 MUSHROOM CULTIVATION UNIT ATTACHED TO THE SPAWN UNIT
(RAISING 1800 BEDS PER MONTH)
BUDGET
A. FIXED COST

Sl. No. Particulars Size/Qty Rate Amount(Rs.)

1 Asbestos Shed( 50’ X 30’) with 2 2,00,000 4,00,000

pillars with iron relling

2 Straw Immersion Tank( 5’ X 4” X 5 2,500 1,25,000

3”)
With platform

3 Chaff cutter 10 500 5000

4 Bamboo for making racks 250 120 30,000

5 Weighing balance(Top pan) 4 1500 6,000

6 Thermo-hygrometer 2 2,500 5,000

7 Heating drum 4 1000 1,000

8 TOTAL 6,00,000

B. RECURRING COST

Sl. No. Particulars Size/No/Qty Rate(Rs) Amount(Rs)

1 Paddy straw 10,500 kg 4 42,000

2 Spawn 1500 bottle 12 18,000

3 Gram powder(Besan) 300 kg 50 15,000

4 Labour 120 lab 200/day 24,000

5 Misc expenses 1,000

6 TOTAL 1,00,000

Total cost of spawn unit= 11,00,000 + 2,00,000 = Rs. 13,00,000

Total cost of cultivation unit = 6,00,000 + 1,00,000 = Rs. 7,00,000
Grand total cost of Spawn Unit + Cultivation Unit = 13,00,000 + 7,00,000 = Rs. 20,00,000

YIELD AND ANTICIPATED INCOME/ MONTH FROM SPAWN UNIT

ACSSC, OUAT[Type text] Page 5

1. Production of spawn
@ 1000 spawn/day for 25 days = 25,000 bottles
Assuming 10 % contamination, spoiled spawn = 2500 bottle
Actual spawn production + 25,000 – 2500 = 22, 500 bottles
2. Income
Sale price of spawn = Rs. 12 per bottle
Gross income = 22,500 X 12 = Rs. 2,70,000
3. Net income
Interest @ 10 % of 13,00,000= Rs. 10, 833
Depreciation @ 10 % of Rs. 11,00,000 = Rs. 9167
Net income= Gross income-recurring expense-10 % depreciation- 10 % interest
= 2,70,000 - 2,00,000 – 9167 -10833 = Rs. 50,000/-

YIELD AND ANTICIPATED INCOME FROM MUSHROOM CULTIVATION PER MONTH

1. Paddy straw mushroom= 1800 beds
2. Yield of fresh mushroom @ 1kg/bed= 1800 Kg
3. Gross income @ Rs. 100/Kg= 1800X100= Rs. 1,80,000
Net income = Rs. 1,80,000 – Recurring cost - depreciation @ 10 % 0f Rs. 6,00,000 – interest for Rs.
7,00,000 = 1, 80,000 - 1,00,000 – 5,000 – 5853 = Rs. 69,167
Net income from the Spawn and mushroom = 50,000 + 69167 = Rs. 1,19,167 ( Rupees one lakh nineteen
thousand one hundred sixty seven only)

Economics:

Particulars Year
1 2 3 4 5 6 7
Sale of spawn 270000 290000 315000 330000 350000 375000 400000
Sale of paddy straw
mushroom 180000 190000 200000 215000 230000 245000 260000
Total 450000 480000 515000 545000 580000 620000 660000
Glass bottles for spawn 60000 60000 60000 60000 60000 60000 60000
Non-absorbent cotton for
25000 bottle 17500 18000 18000 18500 19000 19500 20000
Paddy straw 42,000 41000 41500 42000 40000 41000 40000
Spawn 18,000 18000 18000 18500 18500 19000 19000
Gram powder(Besan) 15,000 15500 15500 16000 16500 17000 17000
Labour 34,000 34500 35000 35000 35500 36000 37000
Wheat grains for 25000 94,500
bottles 94500 95000 95000 95500 95500 96000
Calcium carbonate @ 20 1,350
g/kg of wheat 1300 1300 1350 1400 1400 1350
Butter paper for 25,000 1,050 1,050 1,050 1,050 1,050 1,050 1,050

ACSSC, OUAT[Type text] Page 6

bottles
Rubber band 600 600 600 600 600 600 600
Dextrose 150 160 160 160 170 170 170
Agar agar 1,400 1400 1450 1450 1450 1500 1500
Potato@ 200g/litre=10 lit X 20
200g=2 kg 20 25 25 25 30 30
Ambistryn 1 file/lite 100 100 100 100 100 100 100
Electricity 10,000 10,000 10,000 10,000 10,000 10,000 10,000
Total 295,670 296,130 297,685 299,735 299,795 302,850 303,800
Surplus 154,330 183,870 217,315 245,265 280,205 317,150 356,200

Calculation of NPV and IRR

1 2 3 4 5 6 7

Capital Costs 1100000 0 0 0 0 0 0

Recurring Cost 295670 296130 297685 299735 299795 302850 303800

Total Costs 1395670 296130 297685 299735 299795 302850 303800

Benefit 450000 480000 515000 545000 580000 620000 660000

Net Benefit -945670 183870 217315 245265 280205 317150 356200

PW Cost @ 15% 2528667.46

PW Benefits @ 15% 2540354.31

NPW 11686.85

B.C Ratio 1.02:1

I.R.R (%) 18.23

BEP and DSCR

The BEP and DSCR of Spawn and Mushroom units are calculated separately which are given below.

BEP= Fixed cost

------------------------------------
Sale Price - variable or recurring cost
DSCR = Net Income or cash accrual + depreciation + Interest expenses
---------------------------------------------------------------------------
Principal repayment + Interest repayment

BEP and DSCR of Spawn Unit

Avg DSCE = 27.29/7 = 3.89

ACSSC, OUAT[Type text] Page 7

BEP = 68.08/7 = 9.30 unit

BEP and DSCR of Mushroom Unit

Avg DSCE = 31.20/7 = 4.46

BEP = 37.89/7 = 5.41 unit

Repayment Schedule

Year Loan Outstanding Gross surplus Interest Principal Total repayment Surplus

1 1100000 154330 110000 157143 267143 -112813

2 942857 183870 94286 157143 251429 -67559

3 785714 217315 78571 157143 235714 -18399

4 628571 245265 62857 157143 220000 25265

5 471428 280205 47143 157143 204286 75919

6 314285 317150 31428 157143 188571 128579

7 157143 356200 15714 157143 172857 183343

LIST OF MACHINERY SUPPLIERS

Sl. Name of Company Address Phone Email

No.
1 Lab Chemicals Pvt. P.B.No.14, Unit-IV, 0674-2506676 labchemicals@stayam
Ltd. Market Complex , Shop.
W/5, Bhubaneswar-
751001
2 National Scientific 486, Nilakantha Nagar, 0674-5532666 -
Corporatin Bhubaneswar-751012
3 Mohapatra Scientific F2G/30, Indradhanu 0674-2550684 -
Supply Syndicate Market Complex, IRC
Village, Bhubaneswar-
751001
4 Biotechnika Plot No.848, Sudarshan 0674-2390152 biotechnika@satyam
Palace-II, Madhusudan 09238385150
Nagar, Unit-IV,
Bhubaneswar-751001
5 OSAW Industrial P.B.No. 42, OSAW 0171-2699347 Denquiry@indosaw
Products Pvt.Ltd. Complex, Jagadhri 0171-2699267
Road, Ambala Cantt-
133001 (Haryana)
6 Soubhagya 1224/Satya Vihar, 09937140560 Soubhagyaenterprises
Enterprises Palasuni, Rasulgarh, @gmail.com
Bhubaneswar-751010

ACSSC, OUAT[Type text] Page 8

 7 Science Park Plot No. 677, Jagamara, 0674-2531043 -
Khandagiri, 09437404118
Bhubaneswar- 751030
8 Pattanaik Scientific 48/ Madhusudan Nagar, 0674-2394566 [email protected]
Supply Syndicate Unit-IV, Bhubaneswar- m
751001
9 Scientific Traders 1188/Nuapalli, 0674-5533066 Scientificbb
Bhubaneswar-721012
10 Macro Scientific 10A/UA, Jawahar Nagar, 011-23852500 [email protected]
Works P.B. 2151, Delhi-110007 011-23855592
011-23855070

ACSSC, OUAT[Type text] Page 9