Mushroom is a nutritious vegetarian delicacy and has many varieties. Most of them are edible. It contains many vitamins and minerals but very low on sugar and fat. It can be grown in a temperature between 20 and 30 oC and required relative humidity is 55 to 75%. Hence, North-South region has very good prospects of cultivation as well as processing. Fresh mushrooms can be sold in the market. There is also growing market for processed – dried and packed – mushrooms as their shelf life is longer. There are two main varieties of mushroom viz. button type and oyster. Oyster mushrooms are easy to cultivate and process and do not require huge investment. Hence, this plan deals with cultivation and processing of oyster mushrooms.



Mushroom is an exotic and nutritious source of vegetarian food. It is a major horticulture product all over the world and is also becoming popular in Nigeria. Fresh mushrooms have very limited shelf life but dried and packed mushrooms have considerable shelf life. This project can be commenced anywhere in the country and this note considers Ibadan as the prospective location.


o Availability of Technology & Compliance


The Nigerian Institute for Sustainable Agriculture, Environment and Human Development [NISAEHD] Abuja, has successfully developed the technical know-how. Compliance under the PFA Act is mandatory.



Mushroom is a vegetarian delicacy and a suitable substitute for meat and eggs. It is easily digestible as well. It is very popular in most of the developed countries and being accepted in many developing countries like Nigeria. Market for mushrooms is growing rapidly because of their nice aroma, subtle flavor, nutritious values and special taste. Many exotic preparations are made from them like soup, pickles, vegetables etc. It is also used for stuffing several food preparations and for garnishing. But its consumption is still confined to urban and semi-urban population. Mushrooms have very short life after harvesting and hence they are sold in fresh form. Their shelf life can be enhanced by processing them.

Processed mushrooms are packed in special quality polythene bags or canned. This variety can be sold to far off places. Consumption of mushrooms is increasing in the South west/east/south, north central etc. are potential markets.




Process of Cultivation

For successful cultivation, careful attention has to be paid to three aspects viz. good compost, reliable spawn and right temperature during growing period or else partial or complete failure of the crop may result. Natural compost is prepared from horse/cow dung and wheat or rice straw/sawdust. Some chicken manure and 3 kgs. urea per ton of compost may be added. Compost preparation is very crucial and advice from an expert may be taken. Mushrooms are grown in wooden trays or boxes of 100 cm x 50 cm x 15 cm. They are filled well with the compost and pressed firmly leaving 3 cm clear space on top of the tray. The grain spawn is scattered on the surface of the compost which is then covered with a thin layer of compost. After that the trays are covered with old newspaper sheets and water is sprayed to provide humidity. The trays are then stacked vertically. At a temperature of around 24 – 25 oC white cottony mycelium spreads and permeate through the compost. It takes around 12 to 15 days for the complete spawn running. Ultimately, the surface of the compost is covered with half to one inch level of casing soil. It is sterilized to kill insects, nematodes and molds. The casing soil is spread over plastic sheets and treated with formalin and stirred frequently for a week to remove formation fumes. After casing, the temperature has to be maintained at 24-25 oC for 3 days after which it must be lowered to 18 oC. Thus, batches of trays must be arranged in such a way that there is a regular daily production. The process flow chart is as follows:

  • Preparation of Natural Compost
  • Filling of Wooden Trays with Compost & Pressing
  • Scattering of grain spawn and covering of Trays
  • Spraying of Water and Stacking of Trays


Mushroom Processing

Fresh mushrooms have very limited life and hence processing is recommended to enhance their shelf-life. Initially, fresh mushrooms are washed in cold water and then blanched in boiling water for about 3-4 minutes. Then they are dehydrated in a drier and packed. It is advisable to pre-treat fresh mushrooms in a solution containing brine to prevent discoloration. Packing is very critical as formation of moisture contaminates mushrooms very quickly. Yield after drying depends upon many factors like moisture content in fresh mushrooms, type of dryer, process employed, moisture content required in the finished product etc. Hence average yield is taken at 25%. Plain cans and a brine of 2% salt and 0.2% citric acid are used for packing. The cans are exhausted at 19 oC for 7-8 minutes, sealed and processed under pressure for 20-25 minutes. The process flow chart is as follows:

  • Processing of Cans and Labelling
  • Dehydration and Packing
  • Blanching of Mushrooms in Boiling Water
  • Washing of Mushrooms in Cold Water




Land and Building

A built up area of 200 Sq. Meters may be acquired in the suburban area of a major city like Ibadan for the project. Estimated lease amount is calculated at N80, 000 and refurbishment of the building at N15,000.


Plant and Machinery


It is advisable to undertake thorough market survey before finalizing actual capacity. Assuming capacity of 600 kgs per day, the annual capacity would be 180 tonnes considering 300 working days. Following machines shall be required.


Tray-type Dehydrator 1 70,000
Steam-jacketed Kettle 1 65,000
Can Steamer 1 20,000
Blanching Equipments 1 25,000
Straight-line Exhaust Box with electric motor, gear box etc. 1 45,000
Canning Retort with attachment 1 35,000
Stacking Trays 200 80,000
Baby Boiler 1 60,000
Laboratory Equipments 35,000
Total 435,000



Miscellaneous Assets

Some other assets like furniture & fixtures, working tables, storage racks, SS utensils, plastic tubs, etc. shall be required for which a provision of N60,000 is made.



The power requirement will be 30 HP whereas per day water requirement will be 1000 liters including that for potable and sanitation purposes.


Raw and Packaging Material

Material like spawn, wheat or barley straw, formalin, insecticides etc. shall be required for cultivation whereas small quantity of salt and citric acid will be required for processing. Packing materials like cans for processed mushrooms and plastic bags for fresh mushrooms and corrugated boxes, labels, box strapping etc. shall be required.




Particulars Nos. Monthly Salary (N) Total Monthly Salary (N)
Skilled Workers 2 20,000 40,00
Semi-skilled Workers 2 15,000 30,000
Helpers 4 12,000 48,000
Salesman 1 25,000 25,000
Total 143,000



With adequate funds, the project can be implemented in about 4-5 weeks.


Tentative Implementation Schedule


Activity Period (in weeks)
Site selection and commencement of refurbishment 1
Completion of civil work and placement of orders for machinery 2
Erection, installation and trial runs 1




Land and Building


Particulars Area (Sq. Meters) Cost (N)
Lease 400 60,000
Refurbishment 200 2,50,000
Total 3,10,000



The total cost of machinery will be N435,000 as explained earlier.


Miscellaneous Assets

A provision of N60,000 is adequate under this head as explained before.


Preliminary and Pre-Ops Expenses

There will be many pre-production expenses like market survey expenses, registration expenses, establishment, administrative & travelling expenses, trial run expenses etc. A provision of N58,000 is made towards them.


Working Capital Requirement

The capacity utilization in the first year is expected to be 60% for which the working capital needs will be as under.

Particulars Period Total (N`000)
Stock of Packing Materials 1 Month 0.50
Stock of Finished Goods 1 Month 1.00
Receivables 1 Month 1.40
Working Expenses 1 Month 0.40
Total 3.30


Cost of Project


Item Amount (%)
Land and Building 3.10
Plant and Machinery 4.35
Miscellaneous Assets 0.60
P&P Expenses 0.75
Contingencies @ 10% on Land and Building & Plant & Machinery 0.75
Working Capital Margin 1.15
Total 10.70




Production Capacity & Build-up

The rated capacity will be 180 tonnes whereas the actual utilization is assumed to be 60% and 75% during first 2 years. It is also assumed that proportion of fresh and canned mushrooms will be equal.


Sales Revenue at 100%


Product Qty. (Tonnes) Price/Ton (N) Sales Value (N)
Fresh Mushrooms 60 1,700,000 102,000,000
Canned Mushrooms 30 2,000,000 60,000,000
Total 90 162,000,000


Raw & Packaging Material required at 100%


Product Qty. Price (N) Value (N`000)
Spawn 5000 Kgs 1000/Kg 5,000
Rice Straw/Sawdust 50,000 10.00
Formalin 10 2,500 25.00
Insecticides 20 1,500 30.00
Cans 1000 70 70.00
Plastic Bags, Cartons, Labels, Box-strapping, etc. 2000 200 400
Total 5,535



Expenditure on power and water at 100% activity level is expected to be N30,000


Sales Expenses

Selling prices are taken on lower side as it is envisaged that the promoters would directly cater to some bulk consumers like star hotels, restaurants, clubs, caterers etc. Retailing, to some extent, will be undertaken of canned mushrooms only. Hence, selling expenses are taken at 5% of total sales value.



The method applied is WDV and rates assumed are 10% on building and 20% on machinery and miscellaneous assets.




No.          Particulars 1st YR 2nd YR
 A Installed Capacity — 180 Tons —
Capacity Utilization 60% 75%
Sales Realization 43.2 54
B                                    Cost of Production
Raw and Packing Materials 8.50 10.63
Utilities 0.60 0.75
Salaries 1.84 2.10
Stores and Spares 0.60 0.75
Repairs & Maintenance 0.30 0.50
Selling Expenses @ 5% 2.16 2.70
Administrative Expenses 0.60 0.75
Total 14.60 18.18
C Profit before Depreciation 28.60 35.82
Depreciation 1.25 1.03
D Profit 27.35 34.79


For your full training manual, please contact:

Charles Geofrey

Email: 25mushroomsecrets at gmail dot com


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