mis205 sustainablr agro products edited

8/8/2019 MIS205 Sustainablr Agro Products Edited

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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 includingavailabilityand 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 fromLentinus, 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 peakseason. 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 ofspecies 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 (Meadowmushroom) andAgaricus rodmani.

SWOT

ANALYSIS

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http://en.wikipedia.org/wiki/Agaricus_campestrishttp://en.wikipedia.org/wiki/Agaricus_campestris


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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 acommon 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)

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Watertreatment

20 days

24-48 hrs. Preserve inHatching

Nursery Post Larvae

10 days

Larvae rearing

tank

30 daysLarvae Collection

Hatching tankCollection ofBarred

mushrooms


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PROCESS OF NURSERY

MARKETING AND SALES

Products:

Production Capacity Unit RateAnnual Capacity Total

RevenueExpansion

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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Acclimatization in Pond

Stocking Pond Juvenile PL Nursery

60 days

Feeding, Fertilization,

Aeration and water

quality controlPond Preparation Stocking of PL


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CapacityRevenue at Utilized

Capacity 32400 34560 34560 36720 38880

Add: Opening WIP 0 2160 2448 2467 2612Total Estimated

Production 32400 36720 37008 39187 41492Less: 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:

Production Capacity Unit Rate

Annual Capacity Total

RevenueExpansion

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. Thats 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 thanany 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 Mushrooms 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 companys 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 andproduct 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 peoples 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. Thats 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 anestimate. 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 projects

mushrooms spawn and mushrooms to the farmers and mushrooms

projects and matured mushrooms to the wholesalers/ exporters. Theproject 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. Thats 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 DaysFinished Goods 5 Days

Local Raw & Packaging Materials 60 DaysImported Raw & Packaging Materials 60 DaysStores & Spares 10 DaysReceivable at Cost 30 DaysSalary, Wage & other exp 30 DaysAdvanced Lease Rental 0 Month

Construction Period 6 MonthForecasting 5 YearProject Life 15 YearIncome Tax Holiday 7 YearAmortization 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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Cost of the project and means of finance

Cost of the Project:

ITEM

Project Cost Estimation

Incurred up to30/09/

03

To beincurred

TotalCost

Land & LandDevelopment Cost

0 20717 20717

Building & Civil WorksCost

0 25348 25348

Local Plant andMachineries

0 14800 14800

Erection,Installation 0 592 592Furniture & Fixture 0 474 474Office Equipment's 0 432 432Vehicles 0 3000 3000Eng, Pat, Draw,Excavation etc.

0 200 200

Preliminary& IPOExpenses

0 850 850

Bond purchase 0 65 65Contingencies 0 507 507

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

Capacity Utilized 75% 80% 80% 85% 90%Repairing and Maintenanceof Building

0.50% 0.75% 1.00% 1.50% 2.00%

Repairing and Maintenanceof Machineries

0.50% 0.75% 1.00% 1.50% 2.00%

Storage and Spares ofMachineries

0.50% 0.75% 1.00% 1.50% 2.00%

Rent, Tax & Insurance (% of

Fixed Cost)

1.00% 1.00% 1.00% 1.00% 1.00%

Dividend on Paid-up Capital 10.00% 10.00% 12.00% 12.00% 12.00%

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Total Fixed Cost 0 669846698

4

Net Working Capital0 2603 2603

Total Project Cost 0 69587

6958

7

Means of Finance:

Equity :-

Incurred up

to30/06/

08

To beincurr

ed

TotalCost

Sponsor(Paid-upCapital) 0 35490 35490

EEF Bangladesh 0 34098 34098

Total Equity 0 695876958

7Total Means ofFinance 0 69587

69587

Projected income statement:

Year-1

Year-2

Year-3

Year-4

Year-5

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

Sales 29736 34196 34535 365413869

0

Cost of Goods sold 14296 15975 16734 177371878

0

Gross Profit1544

01822

11780

11880

31991

0Operating Expense 3350 3590 3802 4048 4316Other Income 503 536 536 570 603

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Operating Profit1259

21516

81453

51532

51619

8Financial Expenses 700 420 0 0 0Preliminery and Pre-operation ExpensesWrite-off 170 170 170 170

170

Financial and Other Expenses 870 590 170 170 170

Profit before Other Income1172

21457

81436

51515

51602

8Income From Short TermInvestment 0 0 240 880 1520

Income Before WPP1172

21457

81460

51603

51754

8Workers Perticipation Fund 586 729 730 802 877Profit after Workers ProfitPerticipation Fund

11136

13849

13874

15233

16670

Income Tax 0 0 0 0 0

Tax Holiday Reserve 1114 1385 1387 1523 1667Profit after IncomeTax/Reserve

10023

12464

12487

13710

15003

Dividend 6959 6959 8350 8350 8350Retained Earnings 3064 5505 4137 5359 6653

Last Year Balance 0 3064 8569 127061806

5

Cumulative Rtained Earnings 3064 85691270

61806

52471

8Ratios (%):-

Gross Profit to Sales

51.92

%

53.28

%

51.54

%

51.46

%

51.46

%

Operating Profit to Sales42.35

%44.35

%42.09

%41.94

%41.87

%

Income after tax to Sales33.71

%36.45

%36.16

%37.52

%38.78

%Net Profit to Paid-up

Capital:Before Income Tax/Tax Holiday

Reserve16.00

%19.90

%19.94

%21.89

%23.96

%After Income Tax/Tax Holiday

Reserve14.40

%17.91

%17.94

%19.70

%21.56

%

Dividend10.00

%10.00

%12.00

%12.00

%12.00

%

Dividend pay out69.43

%55.83

%66.87

%60.91

%55.66

%

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Cost of service/goods sold:


Capacity Utilization 75% 80% 80% 85% 90%Raw Materials at Rated

Capacity 9136 9136 9136 9136 9136Raw Materials at UtilizedCapacity 6852 7308 7308 7765 8222Labour 3240 3240 3564 3726 3888Overhead 1946 1946 2386 2792 3217Depreciation 3540 3540 3540 3540 3540

Total1557

71603

41679

81782

31886

7Add: Opening WIP 0 1038 1069 1120 1188

Total WIP1557

71707

21786

71894

32005

5

Less: Clossing WIP 1038 1069 1120 1188 1258

Total Work Cost1453

91600

31674

71775

41879

7Add: Opening FG 0 242 271 284 301Goods Available forsales

14539

16246

17018

18038

19098

Less: Closing FG 242 271 284 301 318

Cost of the Goods Sold1429

61597

51673

41773

71878

0

Raw and Packing Material Cost:

Compostpreparation

Unit Quantity Rate

Amount(000)

Rice/ Wheat Straw Kg 400000 5.00 2000Poultry Straw Kg 225000 3.00 675Calcium Ammonia Kg 2500 10.00 25Super Phosphate Kg 1250 14.00 18

Wheat bran Kg 2000 10.00 20Gypsum Kg 21000 5.00 105Cypermathi Kg 2400 120.00 288Casing SoilPreparation Kg 450000 0.50 225Raw materials forSpawn Kg 0 0.00 0Wheat Kg 120000 10.00 1200Seed Kg 12000 100.00 1200Post harvestmaterials Kg 0 0.00 0

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Can with lid(250gm/can) nos 576000 4.00 2304Cartoon nos 28800 20.00 576OthersVeg. Seeds, Catleetc. L/S 1

500000.00 500

Total :- 9136

Labor Cost:

Name of the Post Proposed

Post

TotalPost

Rateper

Month

TotalSalary

perAnnum

Factory Manager 1 1 25000 300Mushrooms Expart 1 1 15000 180Deputy Manager 1 1 15000 180Manager ( Technical) 1 1 10000 120Sub-Assistance

Engineer 1 1 6000 72Supervisor 2 2 5000 120Lab assistant 2 2 5000 120Can Asstt. 2 2 5000 120Post harvest Asstt. 2 2 4500 108Work Asstt. 4 4 4500 216Driver 2 2 4500 108Guard 3 3 3000 108Skilled Labour 4 4 3000 144Un-Skilled 8 8 2500 240Total 34 34 2136

Assumption :-Annual WagesIncrement 5%Fringe Benefit 35%Bonus 2

Item Year-1

Year-2

Year-3

Year-4

Year-5

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

Over head Cost (Power, Fuel, Water,Maintenance, Depreciation etc.)

Overhead Expanse

Year -1 Year -2 Year -3 Year

-4

Year

-5Repair &Maintenanceof Building

127 190 253 380 507

Repair &Maintenanceof Machineries

74 111 148 222 296

Storage &Spares

74 111 148 222 296

Rent, Tax &Insurance

670 670 670 670 670

Utilities 801 854 854 907 960

OtherManufacturingOverhead

200 250 313 391 488

Total: 1946 1946 2386 2792 3217

Utilities

Item Year-1

Year-2

Year-3

Year-4

Year-5

70% 75% 80% 85% 90%Electricity 345 368 368 390 413Fuel &Lubricant 456 486 486 517 547

Total : 801 854 854 907 960

Fuel & Lubricant

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Item Unit Rate AfterBMREQuanti

ty

TotalCost

Diesel Liter 42.00 2500 55

Grease kg 300.00 500 100Lubricant Oil Liter 80.00 1000 60Kerosene Oil Liter 38.00 2250 45Petrol Liter 60.00 8000 280TransformerOil Liter 35.00 500 10Waste Cotton Kg 28.00 1000 18Soap/Detergent Kg 40.00 1000 40

Total: 608

Depreciation

Assets AfterBMREValue

Rate Year-1

Year-2

Year-3

Year-4

Year-5

Building 25348 5.00% 1267 1267 1267 1267 1267

Machineries 1539210.00

% 1539 1539 1539 1539 1539OfficeEquipment 432

20.00% 86 86 86 86 86

Furniture &Fixture 474

10.00% 47 47 47 47 47

Vehicles 300020.00

% 600 600 600 600 600

Total:354

0 3540 3540354

0 3540

General, administrative and selling expenses :

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Item Year -1Year

-2Year

-3Year

-4Year

-5AdministrativeExpenses 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:

Takain'000'

1) Revenue excluding otherincome at 5 th Year 38690

Capacity Utilization 90%

Item TotaLCost

Variable Cost

FixedCost

Raw and packaing Materials 8222 8222 0Wages & Labour 3888 2916 972Stores & Spares 296 207 89Repair & Maintenance 803 241 562Water, Power, Fuel & Lubricant 960 672 288Rent, Tax & Insurance 670 0 670Administrative & GeneralExpenses 3929 1179

2750

Selling Expenses 387 387 0Loan Interest 0 0 0Lease Rental 0 0 0Depreciation 3540 0 3540Write-Off 170 0 170Workers Profit Participation Fund 877 877 0Other Overhead Expenses 488 244 244Total 24230 14945 9285

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P/V Ratio = {(Sales-VariableCost)/Sales} = 0.6137Break Even Sales =(FixedCost)/PV Ratio) = 151.29 Lakhs

Break Even Capacity ofOperation:Utilize

d Capacity 39.10 %Rated

Capacity 35.02 %

Cash-flow statement:

For the Period Ended ConstructionPeriod


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 TermInvestment 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

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Security Deposit 65 0 0 0 0 0

Repayment of Loan:


Account Payable 0 10000 2645 0 0 0

Repayment of Interest on:


Increase in Current Assets 3037 1000 224 173 204 210Payment 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 ConstructionPeriodYear-0

Year-1

Year-2

Year -3 Year -4

Year -5

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 313Storage & 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

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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 LiabilitiesShort 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%

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mis205 sustainablr agro products edited

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