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INTRODUCTION

We are about to bring the treasure of turning the bulk of our agro-industrial

wastes into business opportunities (www.philstar.com).

In the Philippines, agriculture is one of the top industries. Agriculture is

considered as an important pillar in the Philippine economy. Experts are quite busy for

new scientific methods to be used for our agricultural productions. Oyster mushroom

production is one of their agricultural means. Oyster mushrooms are usually grown in

tropical forests even in some temperate places. Here in the Philippines, oyster

mushrooms are cultivated for food purposes. It is documented and well-known type of

an edible mushroom.

Oyster mushrooms have a savory and palatable taste. We can complement this

oyster mushroom to our different home-made dishes. Oyster mushroom has abundant

health nutrients. Its health benefits include antioxidant and anti-bacterial properties.

Vitamin D is also present in oyster mushrooms for bones. Since it provides us calcium.

Oyster mushrooms provide protein, iron, potassium, and zinc which are good for our

immune system and vitamins like B1, B2, C, folic acid, and niacin for our metabolism

(http://www.cairnsmushrooms.com.au/nutrition.html). These mushrooms are known for

Beta-Glucan. Such compounds have anti-tumor properties.

According to a former Secretary of Department of Agriculture, Mr. Proceso Alcala

that 90% of the total mushroom consumed in Philippines (including oyster mushroom) is
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imported from other countries. Only 10% of the total consumed mushrooms are locally

cultivated. The Philippines has an abundant amount of agro-industrial wastes as

materials suitable for mushroom production. A blog from Holiday Philippines notes that

mushroom production is one of the progressive business opportunities if it will be

cultivated locally because it targets the basic needs. On the contrary, present cultivation

is limited due to insufficient knowledge and funding from the government about its

cultivation (jmpmushroom, 2013).

In 2014, Department of Agriculture provides a community-based oyster

mushroom project in Bohol for food and livelihood purposes. Still rare growers of oyster

mushroom can be found in the province of Bohol that is why there is a limited supply of

oyster mushroom in the markets. It is usually seen in the supermarkets not even in local

markets

As noted, the number one tourists in Bohol are Koreans followed by Americans

and then Chinese (Tourism statistics, 2016). They are people who love eating

mushrooms. Thus, it creates another potential in the market from our foreign visitors

who eat mushrooms.

It prompts us to make a project feasibility study of an oyster mushroom

production in Ubay, Bohol because of the following situations:

An advertisement from Department of Agriculture Region VII catches our

attention that it is profitable to engage in an oyster mushroom production by using agro-

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industrial wastes. Ubay is an agricultural municipality and it showcases different

agricultural products. One of its major products is the production of rice. Thus, it

produces rice straws every after harvesting season necessary for oyster mushrooms to

grow. After harvesting the palay, it is a common practice of the farmers in Ubay, Bohol

to burn the rice straws. Thus, it causes environmental destruction without thinking the

benefits of using these rice straws. Taking into consideration, it is an eco-friendly

agricultural venture without using any hazardous chemical.

Ubay has its Bohol Experiment Station (BES) in connection with the Department

of Agriculture who will assist us with this project. The availability and accessibility of

technicians and fully-equipped personnel of this agency (BES) are willing to lend their

expertise and assistance for this project. Ubay has improved farm to market roads to

transport local products going to the markets.

Theoretical Background

This study is anchored in the following theories and concept – theory on Project

Feasibility Study, Production theory and Agribusiness concept.

A blog posted by Marin (2012) at www.trumanmox.com cites the importance of

project feasibility study in business. It is used to test the viability of the business concept

and idea. Its purpose is to give us rationale of the business venture whether to pursue it

or not. The business aspects are analyzed after considering that it studies not from the

past but the trends in the present markets. Having project feasibility study for

businesses reduces the risk for failure.

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Production is defined as the process of converting inputs (raw materials) into an

output. Production is an economic activity that generates income. It is an activity

directed towards the satisfaction of the peoples’ wants through an exchange (J.K. Hicks,

2013). According to this theory, it has four basic factors of production namely land,

labor, capital and entrepreneurship.

A Research by Jamandre defines agribusiness as "the sum total of all operations

involved in the manufacture and distribution of farm supplies; production operations on

the farm; and the storage, processing, and distribution of farm commodities and items

made from them (www.openuni-clsu.edu.ph/openfiles/modules/ab710/lesson1.doc).

Agribusiness identifies enterprises that take place within the farm gate as well as

offering products to different consumers. It involves processes such as the acquisition of

production inputs in order to make products by processing further and sell such

products.

Agribusiness may consist of all food production enterprises and the ultimate

consumers with marketing as a big factor to consider in generating profit. It is a system

of moving products and by-products to different consumer sectors. As stated by

Custodio in his book “Agribusiness Concepts and Dimension (2003),” identifies

subsystems within a system. These are essential for the whole agribusiness system.

The Input subsystem: This is the first subsystem where all other subsystems originated.

It is where components (inputs) of raw materials are produced and utilized. The

Production subsystem: Under this system, those outputs will be processed further for
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the production of raw materials to be used as an input in creating another product. The

Processing subsystem: The outputs from preceding subsystem will be consumed to

transform into varied products. The transformation depends upon the process being

applied; it can be simple or sophisticated (Rolando, 2009).The Marketing subsystem:

This subsystem deals with the transport of the produced goods from producers to end-

users (one place to another). Lastly, The Support Subsystem: it where necessary

players in the business venture are involved just like the government, state policies and

other institutions that affect the operations of the business.

Related Literature

According to Raut (2011), 300 BC is the earliest period of oyster mushroom

cultivation and it starts to produce internationally first from China as early as in 900 AD.

France initiates new techniques and approaches for mushroom cultivation until such

time it spreads throughout the European countries (Raut 2011:8).

People from different countries have a different point of views when it comes to

the word “mushroom”. For Romans, it is concerned as “food of gods”. In ancient times,

oyster mushrooms are used by Greek warriors for their strength.

(http://www.creativecommons.org/licenses/by/3.0/).

China has been known as the abundant producer of mushrooms including oyster

mushrooms. In 2008, their exports reach a total of 1.7 billion USD. About 40 % of the

world production comes from China but 95 % of China’s production is consumed in their

country (Sustainability journal, 2014).

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Some chefs and kitchen masters find that oyster mushroom when cooked has

ham-like aroma, mild and soft texture, and indulging flavor. Later on, the products they

produced are intended for commercial purposes like for healthy diet and medicinal help

(http://www.mushroom-appreciation.com).

Cellulose and lignin present in the substrates are vital nutrients for oyster

mushrooms to grow. Logs and hardwoods are the natural environments of these oyster

mushrooms. Due to the advancement in technology, they are produced at a higher yield

of production in an artificial environment but with natural design supplemented with the

nutrients needed (Stamets, 1993).

Experts create new varieties through breeding of oyster mushrooms results to

have different colors, could it be creamy-white color or gray. Some varieties are pink

and yellow. These oyster mushrooms grow in a partially decomposed organic matter.

Oyster mushrooms are unlike plants they do not have green leaves. Therefore, they do

not need warmth from sunlight for them to have food on their own through

photosynthetic processes. They are dependent on the substrates they have for them to

create food in their own way (decaying organic matter). These mushrooms will convert

complex organic matter into a simple form through breaking down and absorbing such

matter from the substrates (Raut, 2011).

Fresh oyster mushrooms are sensitive to its environment. It can easily be

dehydrated if they are placed in direct sunlight or by using the mechanical dryer as

compared to other mushrooms types. Fresh oyster mushrooms take its life span for a
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week after it has been harvested. That is why they need to undergo food processing for

production before the lapse of the shelf span or else, cook them immediately in order to

avoid spoilage of the mushroom fruits (Sahbaz et al., 2000; Giri and Prasad, 1997).

This oyster mushroom cultivation is introduced in Nepal in the year 1981. They

use chopped straws and plants’ remains for cultivation. Technologies for oyster

mushroom production are distributed to farmers. Their production method produces

quick returns of investments. Poor farmers are given equal opportunities for mushroom

cultivation even if in small scale areas to supplement their incomes and alleviate from

poverty (Manandhar, 2014).

A research by Nilesh Pakale in his “Mushroom Growing in India (Mushworld)”,

states that most growers in India are self-employed and operating small-scale farms.

Inadequate knowledge and experiences about oyster mushroom production are

identified from them that alter their biological enterprises. Since growers are just too

complacent, they suffer a low return of investments from mushroom ventures they have.

At that state, results to affect the supply and demand that takes place in the market

segmentation for oyster mushroom production. Therefore, the market price of the oyster

mushroom fluctuates. Their market is exclusively concentrated by the local mushroom

growers and cultivators (Pakale, 2014:29).

Related Studies

Substrates are the base for the mycelia to live. Substrates and other

environmental factors that must be present are necessary for our spawn to grow and

develop so that it will harvest good fruiting bodies of the oyster mushrooms. Since
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substrates are vital for the oyster mushroom growth, it is crucial to decide what kind of

substrates to be used. That is why different substrates are being studied by the experts

to determine the best substrates that are biologically efficient.

Studies conducted by Tan (1981) revealed that cotton waste is the best substrate

for the cultivation of Pleurotus. Cereal Bran from mild grains is added to the cotton

waste substrate to energize the mycelia and increase the yield of mushroom (Kinugawa

et al., 1994). It is found out that sawdust and sugar cane residue are suitable substrates

for growing oyster mushroom (Ahmed, 1998).

An investigation conducted by Zhang et. al (2001) to determine the effects of the

rice straw and wheat straw on oyster mushrooms. The discovery of biological efficiency

and substrate degradation was also known. The ground straw as compared to chopped

straw yielded higher production and it was efficient. The growth of mushroom on the

ground straw is five days shorter than the chopped. However, it is found out that there is

a decrease in yield by using grounded straw as a substrate. Rice straw yields 10% more

than wheat straw under the same variables in doing the experiment.

Obodai et al. (2002) reported that it is needed for sawdust substrate to undergo

the composting process to disintegrate and separate the cellulose and lignin

components of the wood for the release of essential elements for mycelium.

Accordingly, saw dusts are not totally rich in cellulose and lignin in sawdust. The
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sawdust substrates have low amount protein for the cultivation of mushroom and it

needs additional nitrogen, phosphate, and potassium to support the mycelia.

An investigation conducted by Baysal (2003) in paper waste supplemented with

rice husk, chicken manure, and peat for Pleurotus cultivation. The said substrate with

20% rice husk yields 350.2 grams on its actual production. Silva et al. (2005), an

insufficient amount of available nitrogen (N) in the substrate of wood components is

often considered as a limitation for the mycelia to utilize the mushroom substrate.

Pleurotus are widely cultured in Asia and Europe countries because it has high

biological efficiency and no need for costly production (Mane et al., 2007). A study by

Moonmoon et al., (2010) about Oyster mushroom on sawdust and rice straw in

Bangladesh shows that on sawdust it attains 73.5 % efficient and it is better than on rice

straw substrate.

A study by Aguilar et. al (2010) shows significant differences between the

substrates. The study reveals that rice hull is the best substrate for oyster mushroom as

compared to dried banana leave and coconut husk. The reason on such study is that

chemical compound and properties essential for a mushroom to grow are not utilized.

Rice hull or rice husk manifests positive results for all parameters evaluated. Using

coconut husk, the spawn of oyster mushroom has slow progress for growth.
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The starting capital is just minimal and not too costly for oyster mushroom

production in Nepal. Mushroom houses are just made up of indigenous and locally

produced materials. Even manpower is accessible within the village. Agro-industrial

wastes like wheat and paddy straws are also acquirable within their villages as their raw

materials for mushrooms. Manandhar finds that oyster mushroom prices are unstable

and marketing strategies are not good. The price depends upon the demand and supply

of available oyster mushrooms (www.Mushworld.com).

Moreover, it is the most suitable way to earn a living for the poor and landless

farmers in Nepal. Oyster mushroom does not need wide spaces for cultivation. Some

farmers are just using their own houses in growing oyster mushrooms. Thus, oyster

mushroom production contributes to the betterment for their ways of living (Manandhar,

2014:18).

A study by Dr. Lolita D. Viyar on “Oyster Mushroom Production in Laguna State

Polytechnic University - Siniloan Campus (2014)”, they use saw dust from furniture and

woodcarving shops as their main component in the preparation of their substrates.

According to her, the demand for oyster mushroom has tremendously increased and

some demands are not satisfied. Viyar adds that the supply of mushroom is very

minimal at present and it desires them to expand the production capacity of the project

since there is an indication of increasing demand in the locality. The study does not

include the only production of fresh harvests but also includes developing processed-

food being addressed by them.

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Other than production aspect, utilization of used up or spent oyster mushroom

substrates are evaluated for their efficacy as bio-fertilizers and substrates for vermi-

compost. Accordingly, it gains popularity among farmers and food enthusiasts because

of the social, economic and environmental impact of producing oyster mushrooms.

THE PROBLEM

Statement of the Problem

The main objective of the study is to ascertain the viability of establishing an

Oyster Mushroom Production in Bulilis, Ubay, Bohol.

Specifically, it will investigate the feasibility of the project in terms of the following

aspects:

1. Management

2. Marketing

3. Technical

4. Financing and Profitability

5. Socio-economic aspect of the study

The study will come up with thorough conclusions and recommendations for its

implementation.

Scope and Limitation of the Study

The study covers the data available gathered in libraries, periodicals, journals

and online sources. Researchers visit government agencies like the Department of

Agriculture, Provincial Agriculture Office, Agricultural Promotion Center, Department of

Trade and Industry, Department of Science and Technology in Bohol Province for
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conducting relevant interviews. However, a representative from the group gathers data

and relevant information from Bohol Experimental Station and local government unit in

Ubay considering the distance from its capital city. Researchers conduct critical reviews

of the data gathered. Tasks and duties are divided among the researchers to lessen the

hassle and burden. The researchers pay equal contributions for expenses of the study.

The study will be conducted for two consecutive semesters in academic year 2017-

2018.

Assumption

The study is based on the assumption that it is feasible to establish an oyster

mushroom farm in Ubay, Bohol.

Significance of the Study

The following are the importance of the study:

To the Proponent of the Study. It will serve as her guide for the viability of

establishing an oyster mushroom production. The study will serve as a guide on how to

start up the business on what technical, management, financing, and marketing

strategies to apply. It will serve as direction to make sound decisions in every action to

be taken

To Possible Investors. This study gives logical view to those possible investors

for enabling them to interpret if they will invest or not.

To the Government. It is an essential tool to the government for keeping on the

right track and decisions to be made for implementing programs of the same nature.
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To the Future Researchers. The study will also serve as reference material for

undergraduates, graduates students and researchers who will be doing future feasibility

studies of the same nature.

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Executive Summary
Management Feasibility

The proposed business is a sole proprietorship. The farm will require a manager /

cashier who plans, organizes and controls the whole business. The manager / cashier

will implement the business plans, strategies, training and proposals, and responsible in

handling the sales receipts and disbursements. The proposed project will need the

services of a bookkeeper for preparation of the needed business financial statements

and submit reports to regulatory agencies. The management will hire qualified and

competent personnel. All in all, the proposed project will require 16 person with an

annual labor cost of Php 1,055,500. The project is feasible in terms of management

aspect because there is an access to human resources in the place that highly match

the requirements of the needed personnel and at the same time, Human Resource

Policies and Working Policies will be implemented in the administration of the business.

The work will be assigned to different employees according to their schedule.

Marketing Feasibility

The KABUTEHAN FARM will be feasible as to its marketing aspect. The target

market will comprise the permanent vegetable vendors in Talibon, Tagbilaran, Tubigon,

Candijay and Ubay who are 96.25% willing to patronize the proposed oyster mushroom

farm and also 86.67% for hotels, resorts and restaurants in Panglao, Dauis and

Tagbilaran City.

The combined projected demand of oyster mushrooms from vegetable vendors,

resorts, hotels and restaurants in kilos will be computed and reveals that 63,298.68 kilos
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in 2018; 67,861.20 kilos in 2019; 72,808.72 kilos in 2020; 77,948.74 kilos in 2021 and

83,560.43kilos will be the demand for oyster mushrooms in 2022.

The farm will have market share of 50% on the total demand. The farm will adapt

marketing programs and practices regarding the product, price, place, promotion,

people, process and packaging.

Technical Feasibility

The proposed oyster mushroom farm will also be feasible in terms of its technical

aspect. This is because the project location will be located in a very strategic area

where one of its major products is the rice production, thus, there is an abundant supply

of agricultural wastes which will be used in the production such as rice straws. Bohol

Experiment Situation (BES) is situated near the project site where the availability and

accessibility of technicians and fully-equipped personnel will be found. Also, there is an

abundant supply of water because there is an irrigation system nearby. Machineries and

equipments to be acquired are also available within the province. Legal requirements

like business permit, licensing and other regulatory mandates will be followed.

Financial Feasibility

The proposed project will have a total project cost of Php 3,520,225.68 which will

be financed by the proponent itself. The proposed business has an average projected

net income for 5 years of Php 3,030,368.8. As a result, the farm will give an average

return on investment of 86.08 %. It gives an average return on sales of 56%. This

indicates that the business operation is profitable. The profitability test further shows

that the return on equity will be desirable. It has an average return of 33%.
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The balanced sheet shows that the total assets will increase Php 5,184,056.39 in

the first year of operation to Php 14,647,007.81 at the end of five year, at an average of

Php 9,602,179.31. The total project cost of Php 3,520,225.68 will be recovered in two

(2) years and three (3) months.

Socio-economic Feasibility

Once the farm becomes operational, it will cater the demand of the consumers

that will give them quality products. It solves problems on insufficient supply in the

market. It is indeed a good contribution to the society in need of better options when it

comes to food consumption. It will help the current and incoming sellers to gain

additional source of income.

In addition, people in the locality will be hired to operate the business and this will

help decrease the number of unemployed people. It will generate additional revenue for

the government through taxes, licenses and permits and this will help improve the

economic situation in the country. These earnings could help the local government for

the betterment of the community. The farm believes that it can help the community by

welcoming new business opportunities in the future. Therefore, the proposed project will

be feasible.
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PROJECT BACKGROUND

Project Proponent

Mrs. Anita B. Felisilda is the proponent of this project. At present, she manages

her farm focusing rice production and has agri-industrial enterprise in their barangay.

She is a graduate of Diploma in Agricultural Technology. She acquired enough

knowledge and skills from her experiences and trainings to run this type of business.

According to her, she will finance the project cost solely from her own resources.

Business Name

The business will be named “KABUTEHAN FARM” which connotes from the

noun “KABUTE” which is the Tagalog term for mushroom and with the suffix -HAN.

Combining the word KABUTE and suffix –HAN creates another word KABUTEHAN.

Hearing this word “KABUTEHAN” means “GOODNESS”.

Business Location

This oyster mushroom farm will be located in Purok 7, Brgy. Bulilis, Ubay, Bohol. It

will be placed in the idle land of the proponent for almost 1 hectare. Ubay is 110

kilometers away from Tagbilaran City. The town is known for being abundant showing

different agricultural products one of its bests is rice production. The barangay Bulilis is

situated after barangay San Pascual and barangay California from the national road.

Figure 1 shows the location map of the town of Ubay.

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Fig 1. Location Map

Form of Business Organization

The proposed business will operate under a sole proprietorship form of business

organization. The proponent choose this type of business organization because of a

faster and easier creation of the business, the legal requirements and restrictions are

minimal and she will be having a free hand in the decision making. Most of all, the

proponent will not be sharing the income to anyone and it has a tax advantages.
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MANAGEMENT ASPECT

Good management is necessary to every business organization. Efficient and

effective management serves as the backbone of successful organizations.

Management is the art of planning, organizing, directing and controlling human efforts,

financial and physical functions to attain the desired goals. It utilizes organizational

resources through the efficient use of scarce resources and done in the best and

cheapest way to accomplish organizational objectives.

Organizational Chart

The figure and table shown below presents the organizational chart of the

management flow as well as the position, qualification and responsibilities of the

personnel involved in agri-business.

MANAGER /
CASHIER

BOOKKEEPER PRODUCTION TECHNICIAN

OFFICER / DRIVER
FFFDDDDRIVER

FARM WORKERS
/ UTILITY MEN

Fig. 2. Organizational Chart

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Personnel Matrix

The proposed project requires the services of the following personnel in the administrative personnel. The rest of

the personnel are in the technical aspects.

No. of Salary and

Qualifications Responsibilities Status
Position Personnel Benefit
Manager /  Must be at least 30  Plans, organizes Regular Php 10 ,000.00
Cashier years old and control the 1 per month
 A graduate of whole business
management or any  Implements With 3% increase
business related business plans and every 2 years
course strategies
 Knows the basic of  Responsible in Plus:
accounting. handling sales 13th month pay
 Have experience in receipt and SSS
supervising farm disbursement PhilHealth
works Pag-ibig

Monthly Rice
Allowance
Bookkeeper  A graduate or non-  Performs accounting Retainer Retainer’s Fee of
graduate of services 1 ₧ 2,000.00 per
accountancy or any  Records all month
related accounting business
related courses transactions and With 3% increase
 Must be responsible prepares financial every 2 years
statements
 Submit reports to
regulatory agencies
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Human Resource Policies

The proposed business will employ human resources policies to publish the

uniform sets of rules by which employees must abide. These human resource policies

are considered as conditions in pursuance to their employment within the organization.

The policies contain employment guidelines, attendance and time records, wage and

salary, benefits and loans, health and safety, and employment termination and

retirement (See Appendix G).

Working Policies

The following are the work policies in the administration and operation of the

KABUTEHAN FARM”

Working Hours. KABUTEHAN FARM is open daily for business from 7:30 in the

morning until 5:30 in the afternoon.

General Policies. The following implementing rules and policies are to be strictly

adhered by all employees.

1. Attendance. It is encouraged that every employee should report to the

workstation at least 10 minutes before the start work.

2. Leave of absence. In case of planned leave, the employee should inform the

manager 2 days before the scheduled leave. In case of emergency or sickness

leave, employee should inform the manager of the whereabouts of the employee

3. Real time waste works or unnecessary activities are not allowed.

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4. Wear the clean and decent clothes. No wearing of undershirts and sleeveless

blouses.

5. No personal business transaction is allowed inside the premises unless

authorized by the owner.

6. No smoking and drinking before and during work time.

7. Work carefully always.

8. Concentrate on your scheduled works.

9. Put a smile in your face and be respectful at all times.

10. Be loyal to your work as well as to your employer.

MANAGEMENT PROPOSALS

In order to maintain a competitive edge in the marketplace, the proposed farm

through administrative personnel must set aside a time for training and development of

their employees. The management will consider the training of employees in their

current jobs and to develop more their skills in the workplace. Some of the proposals

include the following:

1. Deliver Effective Training – The manager and production officer will conduct

quarterly briefing, trainings and workshops in order to enhance and improve the skills of

their teams. Learning objectives must be set to ensure the right set of employees. This

can be hand’s – on trainings, seminars or meeting with the group.

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2. Employee Assessment Program - The management will assess the whole

organization by using the behavioural assessment of the employees to which includes

the following traits:

 Work Ethics

 Behavior

 Attitudes

 Commitment

This evaluation will be one of the best assessment solutions to select, retain and

develop employees. This proposal allows the employee’s opportunity to develop and

contribute to the farm’s long term objectives. This assessment solution helps to identify

the strengths and areas of opportunity for development.

3. Conducting Employee Opinion Survey – The management will set criteria to

survey the employees in the workplace to focus on specific issues like evaluating the

work climate of a certain employee. It is a method to understand their needs, views,

suggestions and recommendations in the organization. Administrative and Production

personnel will be involved in the decision making and commitments that affect them.

4. Team Building Events – The employees may encounter another employee that

creates conflicting priorities, personality styles and potentially wrong member in the

team. The team leader must determine the overall goals of the organization and the

employee will give feedback to determine their perceptions on the issue. This is the

management’s duty to create team building sessions to uphold strong ties between
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them. This team building will take into account the personality and help group to find

ways to achieve their goals.

Office Supplies & Equipment

Shown below are the list of office supplies, machineries and equipments and the

office furniture and fixtures to be used in administration of the proposed business. It

entails the corresponding material descriptions, unit, the quantity, their unit cost and

their total cost.

Office Supplies Unit Quantity Unit Cost Total Cost

(Php) (Php)
Stapler and Pieces 2 88.00 176.00
Staple wires
Pen Box (50 1 150.00 159.00
pieces)
Pencil Box (50 1 250.00 250.00
pieces)
Adhesive tape & Piece 1 175.26 175.26
dispenser
Push pins Box 1 145.00 145.00

Puncher Piece 1 75.60 75.60

Fastener Box 1 75.25 75.25

Columnar Pieces 10 20.00 200.00

Notebook Pieces 5 10.00 50.00

Writing Pads Pieces 5 15.00 75.00

Post-it Notes Pieces 5 5.00 25.00

Folders Pieces 10 5.50 55.00

Wall clock Pieces 1 145.65 145.65

Scissors Pieces 2 30.00 60.00

Clips Box 1 23.75 23.75

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Glue sticks/ Glue Bottle 3 38.95 116.85

Rubber bands Pack 1 5.60 5.60

Correction tapes Pieces 2 18.65 37.30

Envelopes Pieces 10 3.75 37.50

Long Bond Paper Ream 3 155.45 466.35

Short Bond Paper Ream 3 145.50 436.50

Markers Pieces 2 35.00 70.00

Calculator Pieces 1 179.99 199.99

Ink Pieces 2 91.25 182.50

Tissues Pack 4 63.00 252.00

Logbook Pieces 3 40.00 120.00

Bulk Bottled Pieces 1 985.00 985.00

Water Refills &
Accessories
TOTAL Php 4 591.10

Office Unit Quantity Unit Cost Total Cost

Machineries & (Php) (Php)
Equipments
Computer Piece 1 17 500.00 17 500.00

Printer Piece 1 2 499.50 2 499.50

Telephone Piece 1 1 344.00 1 344.00

TOTAL Php 21 343.50

Office Unit Quantity Unit Cost Total Cost

Furnitures and (Php) (Php)
Fixtures
File Organizer Piece 1 2 716.25 2 716.25
Cabinet
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Whiteboards/ Piece 1 288.00 288.00

Noticeboards
Ceiling Fan Piece 1 565.00 565.00

Chairs/ Plastic Pieces 5 195.00 975.00

chairs
Office Table Piece 1 989.00 989.00

TOTAL Php 5 533.25

Personnel Budget
The personnel budget covers the salaries and wages, benefits of the personnel

in the administration. The personnel budget increases every 2 years as presented in

financial assumption.

Table 1. Salary of Personnel in the Administration (for one year)

No. of Rate per No. Of Annual

Designation
Employees Month Months Salary
Manager/Cashier 1 ₧ 10,000 13 ₧ 130,900
Bookkeeper 1 ₧ 2,000 12 ₧ 24,000
Total 2 ₧ 12,000 - ₧ 154,000
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MARKETING ASPECT

Marketing is the activity, set of institutions, and processes for creating,

communicating, delivery, and exchanging offerings that have value for customers,

clients, partners, and society at large. (American Marketing Association-Board of

Directors, 2012). It is a management process in which goods or services are delivered

from one place to customers.

Market Description

Oyster Mushroom is newly introduced to some Boholano farmers way back in

2014. Thus, these products are not common to people or in the market. According to

our interview to all mushroom growers, they sell their products in their respective public

market / vegetable vendors. Some are in their respective communities. The oyster

mushroom growers supply resorts, hotels and restaurants in Bohol.

Thus, the target markets of our propose oyster mushroom farm will be the following:

 Vegetable vendors of the following municipalities / city

 Jagna

 Talibon

 Tubigon

 Ubay

 Tagbilaran City

 Resorts, Hotels and Restaurants in the following municipality / city

 Dauis
 28

 Panglao

 Tagbilaran City

Demand Analysis

The researchers get a record from LGU – Market administrators to determine the

number of vegetable vendors to our target markets in the past 4 years.

Table 2. Historical Number of Vegetable Vendors

% of
Year Jagna Talibon Tubigon Ubay Tagbilaran Total
Increase
2014 39 27 32 20 93 211 0%
2015 45 30 32 23 101 231 9.48%
2016 47 35 26 25 111 244 5.63%
2017 50 33 29 30 120 262 7.38%
Source: LGU – Market Administrators, 2017
Based on the historical number of vendors, the annual average percentage of

increase of the past four years is 7.50%, which we computed as follows:

9.48% + 5.63 % +7.38%

Average Increase in the number of Vendor = .
3 years

The researchers get another list of number of resorts, hotels and restaurants

from Department of Tourism in coordination with Bohol Tourism Office in the past 4

years.
 29

Table 3. Historical Number of Resorts, Hotels and Restaurants

% of
Year Dauis Panglao Tagbilaran Total
Increase
2014 10 50 25 85 0
2015 14 57 25 96 12.94%
2016 16 55 23 94 -2.08%
2017 15 59 25 99 5.32%
Source: Department of Tourism and Bohol Tourism Office, 2017
Therefore, the annual average percentage in resorts, hotels and restaurants in

12.94% +(−2.08%) + 5.32%

Dauis, Panglao and Tagbilaran City is 5.39% = .
3 years

Based on the historical data gathered from their respective LGU – Market

administrators as shown in Table 2, we computed that there is an annual increase of

7.50 % on the total number of vegetable vendors. We use the average increase in the

demand projection for the next 5 years as follows:

Table 4. Projected Number of Vegetable Vendors

Population of Average Projected

Year Vegetable Population Annual
Vendors Growth Population
2018 262 20 282
2019 282 21 303
2020 303 23 326
2021 326 24 350
2022 350 26 376

Based on the historical data gathered from Department of Tourism and Bohol

Tourism Office as shown in Table 3, it shows that the number of resorts, hotels and

restaurants has increased by an annual average of 5.39%. This become our basis for
 30

the computation of the annual projected increase of resort, hotels and restaurants for ht

next 5 years as shown below.

Table 5. Projected Number of Resorts, Hotels and Restaurants

Population of
Average Projected
Resorts,
Year Population Annual
Hotels and
Growth Population
Restaurants
2018 99 5 104
2019 104 6 110
2020 110 6 116
2021 116 6 122
2022 122 7 129

Demand Projection

For the vegetable vendors, the projected annual demand is based on the result

of questions number 7, 8 and 12 in our survey questionnaire for vegetable vendors

specifically those respondents who specified that they will patronize the product, the

frequency and quantity of purchase. Below is used to compute the demand and its

projection for next 5 years.

Vegetable Vendor’s Demand = (Population of vegetable vendors) x (% of patronage) x quantity

x frequency x number of months

Vegetable Vendor’s Demand = (Population of vegetable vendors) x (96.25%) x 5 kilos

x 4 times per month x 10 months
 31

Table 6 summarizes the five-year projected demand of the vegetable vendors for

the oyster mushrooms.

Table 6. Projected Demand of Oyster Mushroom for Vegetable Vendors

Vegetable Vendor’s Annual Demand

Year
(in kilos)
2018 54,285
2019 58,327.5
2020 62,755
2021 67,375
2022 72,380

For the resorts, hotels and restaurants, the projected annual demand is based on

the result of Questions number 6, 7 and 11 in resorts, hotels and restaurant’s

questionnaire specifically those respondents who specified that they will patronize the

product, the frequency and quantity of purchase. Below is used to compute the demand

and its projection for the next 5 years.

Resorts, Hotels and Restaurant’s Demand = (Population) x (% of patronage) x quantity x

frequency x number of months

Resorts, Hotels and Restaurant’s Demand = (Population) x (86.67%of patronage) x 5 kilos x

2 times per month x 10 months
 32

Table 7 summarizes the five-year projected demand of resorts, hotels and

restaurants for oyster mushrooms.

Table 7. Projected Demand of Oyster Mushroom for Resorts, Hotels and Restaurants

Resorts, Hotels and Restaurant’s

Year
Annual Demand (in kilos)
2018 9,013.68
2019 9,533.70
2020 10,053.72
2021 10,573.74
2022 11,180.43

Table 8. Combined Total Demand (in kilos)

Resorts,
Vegetable
Year Hotels and Total
Vendors
Restaurants
2018 54,285 9,013.68 63,298.68
2019 58,327.50 9,533.70 67,861.20
2020 62,755 10,053.72 72,808.72
2021 67,375 10,573.74 77,948.74
2022 72,380 11,180.43 83,560.43

Supply Analysis

Oyster mushroom growers started producing last 2014. There are about 12

community and station based oyster mushroom growers who supply the entire Province

of Bohol as to the records of Bohol - APC. The researchers get a record of historical

oyster mushroom supply in the past 4 years from Bohol Agricultural Promotion Center.
 33

Table 9. Historical Supply of Oyster Mushroom (in kilos)

Year Total Supply % of Increase

2014 989 0%
2015 1,523 53.99%
2016 1,440 -5.45%
2017 1,559 8.26%
Source: Bohol – APC, 2017

Based on the historical data of oyster mushroom supply gathered from Bohol –

APC, the annual average increase in supply of oyster mushroom in the entire Province

of Bohol is 18.93%, which was computed as follows:

53.99% + (−5.45 %) + 8.26%

Average Increase in the Entire Province of Bohol = .
3 years

Table 10 shows the projected supply in the next 5 years.

Table 10. Projected Supply of Oyster Mushroom (in kilos)

Average Total
Year Total Supply Increase in Projected
Supply Supply
2018 1,559.00 295.12 1,854.12
2019 1,854.12 350.98 2,205.10
2020 2,205.10 417.43 2,622.53
2021 2,622.53 496.44 3,118.97
2022 3,118.97 590.42 3,709.39
 34

Demand – Supply Analysis

The proposed project can only cater 50 % market share considering the current

and projected supply as well as the production capacity and the financing from the

proponent.

Table 11 presents the demand, supply and the gap between them and the

market share.

Table 11. Demand – Supply Gap (in kilos)

Market Total Share

Year Demand Supply D – S Gap
Share
2018 63,298.68 1,854.12 61,444.56 50% 31,649.34
2019 67,861.70 2,205.10 65,656.60 50% 33,930.85
2020 72,808.72 2,622.53 70,186.19 50% 36,404.36
2021 77,948.74 3,118.97 74,829.77 50% 38,974.37
2022 83,560.43 3,709.39 79,851.04 50% 41,780.22

Projected Sales Volume

Table 12 show the annual projected sales volume. There are 5% of spoilage are

expected to be deducted from total share to get the total net sales volume.

Table 12. Projected Sales Volume (in kilos)

Percentage of Projected Sales

Year Total Share
Spoilage Volume
2018 31,649.34 5% 30,066.87
2019 33,930.85 5% 32,234.31
2020 36,404.36 5% 34,584.14
2021 38,974.37 5% 37,025.65
2022 41,780.22 5% 39,691.21
 35

Projected Sales Income

Table 13. Projected Sales Income

Price per kilo Total Sales

Projected Sales
Year with 5% Increase Income
Volume
(Php) (Php)
2018 30,066.87 200.00 6,013,374.00
2019 32,234.31 210.00 6,769,205.10
2020 34,584.14 220.50 7,625,802.87
2021 37,025.65 231.53 8,572,548.75
2022 39,691.21 243.11 9,649,330.06

Proposed Marketing Programs and Practices

The proposed marketing practices of KABUTEHAN FARM will be based on the 7

P’s of Marketing.

Product. The KABUTEHAN FARM will give importance to their target markets

especially their customers by supplying good quality of products. Customers can talk to

the staff especially if there are problems arise in providing the products. The

management shall address the problems right away. The management must maintain

good customer care in entertaining their requests and concerns.

Price. The current selling price of fresh oyster mushroom in the market ranges

from Php 250 to Php 300 depending on their sources of supply. The price of the

proposed oyster mushroom farm are based on standard prices of the most oyster

mushroom growers which is Php 200 per kilo which is competitive enough against the

other existing mushroom growers. This price is the most preferred amount according to

our survey respondents in question number 9 for vegetable vendors with 60% who

favoured this amount and question number 8 for resorts, hotels and restaurants with
 36

93.33% who respond to this amount. The management decides to provide an increase

price of 5% annually.

Place. To ensure good production of oyster mushrooms the production area is

located in Purok 7, Brgy. Bulilis, Ubay, Bohol. The place is good for oyster mushrooms

to grow because it is free from any possible contaminants that might affect the growth of

the oyster mushrooms. The place is surrounded with trees that give cooling

environment for the oyster mushrooms. The proposed project shall be placed in a good

location wherein it is accessible to the raw materials needed for oyster mushroom

production.

With regards to the target markets, they are very accessible to any means of

transportations.

Promotion. The management shall administer a committee composed of 5

persons. This group of persons will be oriented by the management because they are

going to launch and promote these oyster mushrooms to the target markets by

conducting business development forum in the different target markets especially

vegetable vendors. This will be conducted because there is a need to determine and

established markets for consumptions. The management shall coordinate with

Department of Agriculture through Bohol – APC to promote the oyster mushrooms and

encourage customers to patronize the buying of such products. The seminar will take

for half-day in every target market and must be done within a month in the first year of

operation. To encourage the number of participants, they will be informed that there are

sample to be given after the seminars.

 37

To increase the target consumers and potential buyers, the management will

employ print advertisements like flyers which will be given in the target markets. these

flyers will be distributed at the end of every quarter. The management will create an

official social media accounts to cater the needs of the customers and prospect buyers

in accessible way like facebook, instagram, twitter and the like. According to Bohol –

APC, majority of the usual consumers tend to be of the older age. To address the issue,

there will be a radio advertisement. It will be aired for 30 seconds every day at 7:00 a.m

food for a month at every end of the quarter. This advertisement will be aired at DYRD –

Bohol AM station on a contractual basis.

For our target resorts, hotels and restaurants, the management shall hire product

and sales promotion team composed of 5 persons in behalf on the management to

conduct proposal and negotiations to our target resort, hotel and restaurants in Dauis,

Panglao and Tagbilaran City. This is to be done in 1 week within the first month of

operations of the business. A budget also will be allocated to support the marketing

programs.

People. All staff and personnel will always be oriented the proper etiquette of

taking care our customers. The personnel are expected to be friendly, approachable,

hardworking and courteous in entertaining the target customers even with their co-

workers.

Process. The KABUTEHAN FARM will always consider the quality control for an

efficient and effective process in producing oyster mushrooms. The management shall

ask assistance in Department of Science and Technology to ensure the desired

outcome of the processes. Also, quality control in production area must be observed
 38

Packaging. A good packaging for the products will be used at the same time to

ensure the best quality of the products. The management shall ask advices from

Department of Science and technology on what would be the best packaging design to

ensure the quality, cleanliness and freshness of the product.

Exhibit A

KABUTEHAN SAMPLE FLYER

 39

Marketing Budget

Table 14 shows the marketing budget to be incurred in the first year of operation.

The budget focuses on promotion aspects of the proposed project.

Table 14. Marketing Budget

Budget
Total Budget
Marketing Programs Amount Frequency
(Php)
(Php)
Vegetable Vendors
once every
Information Awareness 56,750.00 56,750.00
year
Campaign
Every
Flyers and Posters 750.00 3,000.00
quarter
Every
Radio Advertisement 10,000.00 40,000.00
quarter
Outsourcing of a team
30,000.00 1 week 30,000.00
for sales promotion
GRAND TOTAL 129 750.00
 40

TECHNICAL ASPECT

This aspect covers the study of the product, production processes, alternative

processes, material requirements, technological assistance, project site, building and

other facility layouts, manpower requirements and the production budget. This covers

the project description of the proposed oyster mushroom farm.

Product Description

Oyster mushroom (Pleurotus sp.) is an easily cultivated edible mushroom. The

caps of the oyster mushrooms are milky white with a silky surface and grow up to 10 cm

in diameter. The cap of oyster mushroom are broad and fan or oyster shape. The gills

are white to cream color. The spore print is white lilac gray. It has firm and thick flesh.

This mushroom is considered as rapidly growing and extremely aggressive fungus.

One cup of oyster mushroom provides about 28 calories and 35 grams of fat,

2.85 grams of protein, and 2 grams of fiber. The same amount provides 361 mg of

potassium, 0.095 grams of vitamin B6 and 33 ug of folate. The nutrients of oyster

mushroom vary when accompanied with meat or bread.

 41

Production or Operation Process

Flow of Production

Rice Wash Agar Shredding of Rice

Media Straws and Mixing
with Saw dusts

Inoculation

Packing of
Fruiting Bags

Grain Spawn
Production

Grain Spawn
transfers to Fruiting Steaming of
Bags Fruiting Bags

Storing to
Mushroom Houses

Production Period /
Packing Delivery
Harvesting

Disposal and
Reproduction

Fig. 3. Flow of Production

 42

Rice Wash Agar Media

Rice Wash Agar is a mixture to be made for mycelia expansion. This process

must be done within the laboratory room to be free from contamination. This agar

serves a food nutrient’s to be eaten by the fungi for production. In preparing, we need to

have 1 kilo of milled rice. Ensure that this rice is in good quality. The rice is to be

washed with 1 liter of distilled water. The rice wash solution is to be boiled in a clean pot

using electric stove. On its boiling point, we need to add 1 tablespoon of white sugar

and 2 gelatine bars. The media is now ready. We need sterilized bottle to be filled with

the agar we made. The bottles are to be filled with 50ml each. It is estimated we can

make 30 bottles for 1 liter of rice wash agar.

The filled bottles are to be pasteurized using our autoclave at 120 degrees

Centigrade for 30 minutes. After that, is has to be cooled by laying it horizontally in a

cool-dry place.

Inoculation

Since we made our Rice Wash Agar, farm worker assigned for Inoculation

Process must acquire a freshly harvest oyster mushroom fruit from Bohol Experiment

Station. This process must be done within the laboratory. The personnel assigned in

this process must observe cleanliness and wear appropriate attire inside the laboratory.

Now, the person is ready for inoculation.

The fresh oyster mushroom fruit must be placed in a petri dish to ensure proper

handling. The personnel must light the alcohol lamp for sterilizing the inoculation blade

and to heat up the working place to avoid contamination. The personnel must prepare
 43

70% solution alcohol to wipe the fresh oyster mushroom fruit. The personnel must get a

tissue from the innermost portion of the fruit. The size of the tissue is like a grain of rice.

This tissue is to be placed at the center of the rice wash agar. These bottles are to be

placed in a dry, cool and dim storage area. After three weeks, the bottles are colonized

with mycelia growth.

Grain Spawn Production

This Grain Spawn Production is prepared for multiple mushroom seeds. The

personnel in the laboratory must prepare 10 kilograms of unmilled rice. The personnel

must observe the quality of this unmilled rice. This unmilled rice is to be soaked for

overnight. After soaking, it has to be washed with clean water and remove the grain

once it floats. Then, these grains are to be boiled and it must be ensured that it is 30%

cooked. After that, it has to be drained using out sterilized strainer and to be put in a

clean cotton cloth for drying and consider maintaining the moisture content. The

personnel may use Manila paper for drying.

Once it is cool, it has to be packed in 150 grams each using the Polypropylene

bags (PP). These packages are to be sealed with rubber bands. These must be

sterilized using our autoclave at 110 degrees Centigrade. These packs are to be

cooked. These matured mycelia from our rice wash agar are now ready to transfer in

our grain spawn and it takes another 3 weeks for production within the packed grains.
 44

Shredding of Rice Straws and Mixing with Saw Dusts

Good quality must be observed in selecting and choosing rice straws to be used

as substrates. These rice straws are to be shred with our biodegradable shredder into

pieces. The farm worker must shred desired kilograms of rice straws to compensate the

number of fruiting bags needed in production. After shredding, it has to be soaked

overnight to maintain the moisture content of our substrate. After soaking, it has to be

drained and let it dry considering the desired moisture content.

After that, the rice straws are to be mixed with saw dust substrates with a ratio of

70% rice straws and 30% saw dust and in every 10 kilograms of the substrates to mixed

with 100 grams agricultural line to maintain the acidity of our substrates.

Packing of Fruiting Bags

Once the substrates are ready, the farm worked are going to pack the substrates

in Polypropylene bags (PP) weighing 1 kilogram each. These fruiting bags are to be

sealed with cotton and rubber band to hinder the entrants of contaminants.

Steaming of Fruiting Bags

After packing of the fruiting bags, it is now ready for steaming to ensure that the

substrates are free from contaminants. Contaminants are to be killed using this process

because contaminants might ruin the production of fresh oyster mushroom fruits.

Steaming will run for 2 hours from boiling point at 110 degrees Centigrade. After

steaming, the substrates are to be placed in a clean, dry and cool environment.
 45

Grain Spawns transfer to Fruiting Bags

We have prepared grain spawns and our fruiting bags are ready for production of

oyster mushroom. This process will be done at the laboratory, because this is very

crucial in transferring the mushroom seeds to the fruiting bags. This, the personnel in

laboratory room must disinfect the environment using anti-bacterial fresheners or even

70% solution alcohol. The personnel must prepare the alcohol lamp, the grain spawns

from Polypropylene bags (PP) and Puller. The personnel must sterilize the puller using

the alcohol lamp. Each fruiting bag is to be filled with 10 grains of spawns. It has the

same process in transferring the spawn to the fruiting bags. After this, the fruiting bags

will be sealed with cotton on its mouth with clean paper and rubber band to secure the

quality of producing the fruits.

Storing to Mushroom Houses

Each fruiting bags is filled with spawns. The farm workers are going to transfer

the bags to the designated mushroom houses. These fruiting bags are to be hanged in

their rooms. We need to wait for almost 1 month, the mycelia colonize entire fruiting

bags.

Production Period / Harvesting

After a month, it is expected that the mycelia will colonize the entire fruiting bags.

Then, the farm workers will be assigned to detach the sealer in the tip of the fruiting

bags for them to grow at the hole and produce the oyster mushroom fruits. These

mushroom fruiting bags are estimated to produce fruits for 3 months from the day of first

harvest. Not all fruiting bags will produce the oyster fruits at the same day. Some fruiting
 46

bags will bear fruits and some fruiting bags are in the other day. There is an alternate

production of oyster mushroom fruits but the farm will harvest the fruits every day.

Packing of Oyster Mushroom Fruits

Since, there is an everyday harvest, the personnel farm workers will be assigned

to pack the fresh harvest fruit in a clean cellophane. The packing of oyster mushroom

fruits will depend upon the number of kilos ordered from customers and the target

markets. The farm has standard kilo to be packed and sealed and that is 1 kilogram per

pack.

Delivery

Immediate delivery to our customers and target markets is one of concerns of the

farm for them to meet their demand. It is to ensure customer care and satisfaction of our

product. Upon pending of delivery, the farm has cooler where oyster mushroom fruit are

to be stored to maintain the good quality before delivery.

Disposal of Fruiting Bags and Reproduction

Three months is the average production and harvesting period for our fruiting

bags. After that period, we have to replace our fruiting bags. The substrates inside the

fruiting bags are to be decomposed because they are agro-industrial waste and can be

used as a fertilizer to other plants. The farm will implement proper disposal of used

Polypropylene bags (PP) to conserve and protect the environment. They will not burn

the Polypropylene bags (PP) but these will be used as pots of any plants in the form to

maintain the protection of the environment.

 47

For reproduction of another mushroom seeds and fruiting bags we need to

repeat the steps and process mentioned above. There is no more lag of time for

producing mycelia, for making spawn and for preparing fruiting bags because in the 3

months of producing, harvesting period, the farm workers will utilized the time for them

to prepare the replacements of fruiting bags. This technique will be implemented to

guarantee continuous supply of the oyster mushroom fruits.

Table 15. Production Schedule (in kilos)

PRODUCTION SCHEDULE (in kilos)

Planting Harvesting 2018 2019 2020 2021 2022
January April 3,516.59 2,827.57 3,033.70 3,247.86 3,481.69
February May 3,516.59 2,827.57 3,033.70 3,247.86 3,481.69
March June 3,516.59 2,827.57 3,033.70 3,247.86 3,481.69
April July 3,516.59 2,827.57 3,033.70 3,247.86 3,481.69
May August 3,516.59 2,827.57 3,033.70 3,247.86 3,481.69
June September 3,516.59 2,827.57 3,033.70 3,247.86 3,481.69
July October 3,516.59 2,827.57 3,033.70 3,247.86 3,481.69
August November 3,516.59 2,827.57 3,033.70 3,247.86 3,481.69
September December 3,492.42 2,827.58 3.033.66 3,247.91 3,481.63
October January 2,827.57 3,033.70 3,247.86 3,481.69
November February 2,827.57 3,033.70 3,247.86 3,481.69
December March 2,827.57 3,033.70 3,247.86 3,481.69
Total 31,625.34 33,930.85 36,404.36 38,972.37 41,780.22
 48

Replenishment Schedule
Table 16. Replenishment Schedule
Year 1
Month First Batch Second Batch Third Batch

January Preparation of RWA and Mother culture,

Raw Materials: Rice Straws and Saw
Dust
February Grain Spawn Production or Mushroom
Seeds Preparation
March Preparation of Substrate, Mixing of
Substrate, Processing of Fruiting Bags,
Steaming and Transferring of Mushroom
Seeds
April Production of Fresh Oyster Mushroom Preparation of RWA and Mother culture,
Fruits, Temperature Control, Raw Materials: Rice Straws and Saw
Contamination Control, Pest Control Dust
May Spraying, Harvesting, Packing and Grain Spawn Production or Mushroom
Delivery, Disposal of Fruiting Bags at the Seeds Preparation
June end of its life Preparation of Substrate, Mixing of
Substrate, Processing of Fruiting Bags,
Steaming and Transferring of Mushroom
Seeds to Fruiting Bags
July Production of Fresh Oyster Mushroom Preparation of RWA and Mother culture,
Fruits, Temperature Control, Raw Materials: Rice Straws and Saw
Contamination Control, Pest Control Dust
August Spraying, Harvesting, Packing and Grain Spawn Production or Mushroom
Delivery, Disposal of Fruiting Bags at the Seeds Preparation
September end of its life Preparation of Substrate, Mixing of
Substrate, Processing of Fruiting Bags,
Steaming and Transferring of
Mushroom Seeds to Fruiting Bags
October Production of Fresh Oyster Mushroom
Fruits, Temperature Control,
November Contamination Control, Pest Control
Spraying, Harvesting, Packing and
December Delivery, Disposal of Fruiting Bags at
the end of its life
 49

The table 16 above shows the replenishment schedule. It entails the processes

of producing oyster mushroom and how operations will run all throughout the year. The

schedule covers different processes that begin with the first process until the harvesting

of fresh oyster mushroom and until the end of its life. You will notice in the year 1 of its

first quarter, there is no production of fresh oyster mushrooms yet. Month of January

until March are period for preparation of mother culture, subculture and preparations of

fruiting bags. It approximately consumes 3 months before fruiting bags can actually

produce and harvest oyster mushroom fruits. For continuous production, you notice in

the month of April to June is the production and harvesting period of first batch of

fruiting bags before it ends. The same period in the month of April to June will be used

for preparation of mother culture, subculture and preparations of fruiting bags for next

production. So, by the end of the first batch another batch will batch will produce oyster

mushroom. Therefore, there is no lagging of time in producing and harvesting unlike in

the first quarter of the year since it is the beginning period. Thus, in the following years,

there is continuous and undisrupted production and harvesting of the mushroom fruits to

compensate the demand in the markets.

 50

Production Capacity

The operations occur in the production aspect are operating at average and

normal capacity. The farm’s operations and processes depends the number of the

fruiting bags to be used in every batch of production. Its aim is to make 45 000 of

fruiting bags in every batch before it ends. Every fruiting bag has to make 1 kilogram of

substrates before it is filled with the sub-tissue culture / spawn. Every preparation of rice

wash agar can accommodate 20 bottles/ glass jars/ petri dishes for mycelia production.

Each bottle has 40 to 50 ml of rice wash agar. These 20 bottles will be filled and

colonized by the mycelia or the fungi which are more than enough for subculture

production using the 30% cooked palay. These 20 bottles of mycelia is more than

enough for 10 kilograms of grains. The grains are to be packed in 150 grams. The

mother culture can accommodate almost 100 packs of spawn of subculture. Those

subcultures are also more than enough for 44 000 fruiting bags in the mushroom

houses. Every mushroom houses has 4 000 fruiting bags which are to be placed for

production. It has about 20 mushroom houses.

Machineries and equipment are also operating at normal capacity. Agricultural

trailer / tractor has 800 kilograms capacity for hauling agricultural substrate like rice

straws and saw dusts. Biodegradable shredder has normal capacity of shredding 600

kilograms per day. Since the farm has 2 shredders, it can accommodate almost 1 200

kilograms of rice straws every day. The autoclave machine can accommodate 20

bottles per load and 25 to 30 load of grains for subculture preparation. The pneumatic

machine can carry 1700 fruiting bags in every 2 hours of streaming and process. While

a delivery van can accommodate 250 kilograms per delivery.

 51

Alternative Production Process

In preparing a media for our mother culture, instead of Rice Wash Agar, we can

use and make Potato Dextrose Agar (PDA). This PDA is expensive as compared to our

Rice Wash Agar because of the commercial potatoes to be bought in the market but

with the same effect as to mycelia growth.

For substrates aside from rice straws and saw dust we can also use the dried

banana leaves and rice hull as another agro-industrial wastes needed for preparing the

fruiting bags. These dried banana leaves and rice hull are locally available near the

proposed project site.

One of the concerns of establishing an Oyster Mushroom Farm is brownout.

There are times when brownout may occur unexpectedly. A prolonged brownout is

detrimental and may hinder the processes in the farm. Therefore, in order to address

this problem in brownout, the management will let the farm workers to manually chop

the rice straws instead of an automatic electric biodegradable shredder. For prolonged

brownout, a standby power generator will be rented until the back of the power supply

for continuous processes and production.

 52

Technology and Technical Support

The table below shows different government agencies that can assist and advice

the proponent of our proposed business in securing permits and licenses, registering

the business, acquiring machineries and equipment to be used, and other technical

assistance.

Table 17. Technology and Technical Assistance

Type of Assistance Office/Establishment Address/Tel. Nos./ Email

One stop business centre,
Trade business Provincial Capitol Building/
management, business Department of Trade and 2nd floor FCB Bldg. CPG
name, registration and Industries (DTI) Avenue, Tagbilaran City.
renewal. Tel. (038) 411-3302, 411-
3533, 411- 3236.
Near BMCI Hospital for DA
Tagbilaran City.
Rey Pamugas

Gabi Ubay, Bohol for BES

Dept. of Agriculture (DA),
Helen Bantilan
Technical Assistance and Bohol Experiment
09077978573
Seminars Station(BES) and
Bohol APC
Near City Hall Building for
APC , Tagbilaran City
Gina Olaguir
09070480498

Technological Inquires
and Assistance for Department of Science Tagbilaran City
Machines And Equipment. and Technology (DOST) 09075434689
Packaging Advice
Nutritional Value and
Cebu City, Cebu
Facts, Bureau of Food And Drugs
09355592865
Barcode Inquires
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Bill of Materials

Project : SB-01 : Storage Building

Location: Ubay Bohol
UNIT PRICE TOTAL COST
ITEM NO. MATERIALS DISCRIPTION UNIT QUANTITY (Php) (Php)

A. Walls and Columns

101 Coco Lumber (4''x 4'' x 6m) Pcs 4 50.00 200.00
103a Portland Cement Sack 20 249.00 4,980.00
102 nails #4 Kgs 1 30.00 30.00
102(1) nails #3 Kgs 1 100.00 100.00
102(2) nails #2 Kgs 1 90.00 90.00

B. Truss and Ceiling

103 Roof Pcs 24 300.00 7,200.00
104 Insulation 36 30.00 1,080.00
105a Coco Lumber ( 2''x 2'' x 6m) Pcs 34 30.00 1,020.00
105b Coco Lumber ( 3''x 4'' x 6m) Pcs 10 35.00 350.00
105c Coco Lumber ( 2''x 3'' x 6m) Pcs 14 66.00 924.00
106 Plywood 1/4'' (1.2m x 2.4 m) Pcs 17 266.00 4,522.00

C. Masonry Works
103 CHB 4'' Pcs 100 19.95 1,995.00
3
108 Sand m 1 1,050.00 1050.00
3
109 Gravel m 0.5 1,170.00 585.00

C. Labor
1 20,000 20,000

TOTAL 44,126.00
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Project : MH-00 : Mushroom Houses

Location: Ubay Bohol
UNIT PRICE TOTAL
ITEM NO. MATERIALS DISCRIPTION UNIT QUANTITY (Php) COST

A. Walls and Columns

101 Coco Lumber (4''x 4'' x 6m) Pc 6 50.00 300.00
103a Portland Cement Sack 5 249.00 1,245.00
102 nails #4 kg 1 30.00 30.00
102(1) nails #3 Kg 1 100.00 100.00
102(2) nails #2 Kg 1 90.00 90.00

B. Truss and Ceiling

103 Roof Pc 56 300.00 16,800.00
104 Insulation 50 30.00 1,500.00
105a Coco Lumber ( 2''x 2'' x 6m) Pc 42 30.00 1,260.00
105b Coco Lumber ( 3''x 4'' x 6m) Pc 20 35.00 700.00
105c Coco Lumber ( 2''x 3'' x 6m) Pc 14 66.00 924.00
106 Plywood 1/4'' (1.2m x 2.4 m) Pcs 12 266.00 3,192.00

C. Masonry Works

108 Sand m3 0.5 1,050.00 525.00

109 Gravel m3 0.5 1,170.00 585.00,

D. Labor
1 20,000 20,000

TOTAL 47,251.00
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SB-FB : Storage Building for

Project : Finished fruit bags
Location: Ubay Bohol
UNIT PRICE TOTAL
ITEM NO. MATERIALS DISCRIPTION UNIT QUANTITY (Php) COST

A. Walls and Columns and Partitions

101 Coco Lumber (4''x 4'' x 6m) Pcs 4 50.00 200.00

103a Portland Cement Sack 20 249.00 4,980.00

102 nails #4 Kg 1 30.00 30.00

102(1) nails #3 Kg 1 100.00 100.00

102(2) nails #2 Kg 1 90.00 90.00

B. Truss and Ceiling

103 Roof Pcs 24 300.00 7,200.00

104 Insulation 36 30.00 1,080.00

105a Coco Lumber ( 2''x 2'' x 6m) Pcs 46 30.00 1,380.00

105b Coco Lumber ( 3''x 4'' x 6m) Pcs 10 35.00 350.00

105c Coco Lumber ( 2''x 3'' x 6m) Pcs 14 66.00 924.00

106 Plywood 1/4'' (1.2m x 2.4 m) Pcs 37 266.00 9,842.00

C. Masonry Works

103 CHB 4'' Pcs 100 19.95 1,995.00

108 Sand m3 1 1,050.00 1,050.00

109 Gravel m3 0.5 1,170.00 585.00

D. Labor

1 20,000 20,000.00

TOTAL 49,806.00
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Project : MO-00 :Management Office

Location: Ubay Bohol
UNIT PRICE TOTAL COST
ITEM NO. MATERIALS DISCRIPTION UNIT QUANTITY (Php) (Php)

A. Walls and Columns and Partitions

101 Coco Lumber (4''x 4'' x 6m) Pcs 6 50.00 300.00

103a Portland Cement Sack 35 249.00 8,715.00

102 nails #4 Kg 1 30.00 30.00

102(1) nails #3 Kg 1 100.00 100.00

102(2) nails #2 Kg 3 90.00 270.00

B. Truss and Ceiling

103 Roof Pcs 24 300.00 7,200.00

104 Insulation 36 30.00 1,080.00

105a Coco Lumber ( 2''x 2'' x 6m) Pcs 60 30.00 1,800.00

105b Coco Lumber ( 3''x 4'' x 6m) Pcs 20 35.00 700.00

105c Coco Lumber ( 2''x 3'' x 6m) Pcs 14 66.00 924.00

106 Plywood 1/4'' (1.2m x 2.4 m) Pcs 72 266.00 19,152.00

C. Doors and Windows

107 Wooden Door Set 3 3,200.00 9,600.00

108 Windows Set 4 3,212.00 12,848.00

D. Masonry Works

108 Sand m3 2 1,050.00 2,100.00

109 Gravel m3 1.5 1,170.00 1,755.00

E. Labor

1 40,000 40,000
TOTAL 106,574.00
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Project : LAB-01 : Laboratory

Location : Ubay Bohol
UNIT PRICE
ITEM NO. MATERIALS DISCRIPTION UNIT QUANTITY (Php) TOTAL COST

A. Walls and Columns and Partitions

101 Coco Lumber (4''x 4'' x 6m) pcs 4 50.00 200.00

103a Portland Cement sack 50 249.00 12,450.00

102 nails #4 kgs 1 30.00 30.00

102(1) nails #3 kgs 1 100.00 100.00

B. Truss and Ceiling

103 Roof pcs 8 300.00 2,400.00

104 Insulation M 15 30.00 450.00

105a Coco Lumber ( 2''x 2'' x 6m) pcs 8 30.00 240.00

105b Coco Lumber ( 3''x 4'' x 6m) pcs 12 35.00 420.00

106 Plywood 1/4'' (1.2m x 2.4 m) pcs 5 266.00 1,330.00

C. Doors and Windows

107 Sliding Glass Door set 1 3,200.00 3,200.00

D. Masonry Works

108 Sand m3 3 1,050.00 3,150.00

109 Gravel m3 3 1,170.00 3,510.00

109a Rebars kgs 120 1,100.00 132,000.00

E. Electrical Works

110 duplex wire box 1 1,950.00 1,950.00

111 Light Switch ( one gang ) pcs 1 67.00 67.00

111a socket ( three gang ) pcs 1 150.00 150.00

112 Flexible Pipe M 3 370.00 1,110.00

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112a PVC pipe (6 m ) pcs 3 190.00 570.00

113 Flourescent Light pcs 1 370.00 370.00

F. Labor
1 60000 60000

TOTAL 223,697.00

The tables above present the description of material with their corresponding

unit, quantity, unit price and the total cost in constructing the administrative building,

storage room, laboratory and 20 mushroom houses.

Total Cost for Admin. Building, Storage room, Laboratory and the Mushroom
Houses

Building Description No Total Cost

SB-01 Storage Building 1 ₧44,126.00
MH-Nos Mushroom House 20 945,020.00

SB-FB Storage House for Fruit Bags 1 49,806.00

MO-00 Management Office 1 106,574.00
LAB-01 Laboratory 1 223,697.00
Excess 200,000.00

Total Cost ₧1,569,223.00

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Utilities

Utilities include water, electricity and communication in the business. Here

presented is the nominal cost of utilities that will be consumed in the proposed project

Table 18. Annual Utility Cost

Unit Cost Consumption Total Cost
Utility Sources
(Php) Rate (Php)
Electric Power Boheco II 10/kwh 5400 kwh 54,000
San Pascual
Water 10/cu. M 4800 cu. M 48,000
Waterworks
Communication
Smart, Globe 1200 14,400
and Telephone
Transportation Ceres Lines 250 3,000
Power
Rental 3000/mo 6,000
Generator
Total 125,400

There is a standard electric consumption in production machinery and equipment

for every use. Not all machineries and equipment will be used at a time There will be a

series of use for machinery and equipments to conserve electricity. An average of 280

cu. m of water will be used in the farm to minimize the cost for water supply.

Gasoline, Oil and Lubricants, Repair and Maintenance

Table 19. Annual Gasoline, Oil and Lubricant, Repairs and Maintenance

Unit Cost
Expenses Sources Consumption Total (Php)
(Php)
Gasoline Shell/Petron/Caltex 42/liter 12600 liter 529,200
Oil and CRU Hardware
500/month 12 mos. 6,000
Lubricants Supply
Repair and
---------- 2500 12 mos. 30,000
Maintenance
Total 565,600
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The table above shows the amount and schedule expense of Gasoline, Oil and

Lubricants and Repair and Maintenance The monthly budget for Gasoline amounts to

105 liters per month; while the Oil and Lubricants amount to Php 500 per month. The

monthly cost for Repairs and Maintenance of machineries, equipment and other

facilities amounts to Php 2 500 per month.

Production Machineries and Equipments, and Furniture and Fixtures

The tables below show the different production machineries and equipment, and

furniture and fixtures to be purchased that will cater the needs of these machines and

equipment to meet the production schedules and operations.

Production Unit Quantity Unit Cost Total Cost

Machineries and (Php) (Php)
Equipments
Electric Stove Pc 1 1,680.00 1,680.00

Air conditioner Pc 1 7,000.00 7,000.00

Saw Pc 1 135.00 135.00

Autoclave Pc 1 13,500.00 13,500.00

Weighing Scale Pc 1 299.75 299.75

Pneumatic Boiler/ Pc 1 359,797.00 359,797.00

Sterilizer
Biodegradable Pc 2 85,000.00 170,000.00
Shredder
Delivery Truck Pc 1 155,000.00 155,000.00

Tractor Pc 1 85,000.00 85,000.00

Chillers/ Coolers Pc 2 8,000.00 16,000.00

Electric Sealer Pc 2 1,189.50 2,379..00

Weighing Scale (10 Pc 1 1,050.00 1,050.00

Kilos)
TOTAL Php 813,300.75
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Production Unit Quantity Unit Cost Total Cost

Furnitures and (Php) (Php)
Fixtures
Table pc 1 845.00 845.00

Chair pc 2 195.00 390.00

Glass Cabinet pc 1 2,685.00 2,685.00

White Board pc 1 250.00 250.00

TOTAL Php 4 170.00

Materials Handling Design & Equipment

The farm will use a tractor / agricultural trailer to transport the raw materials

purchased from various suppliers to the storage area. We will use glass bottles where

we will put the oyster mushroom tissue for the needed time to propagate the said tissue.

Built-in cabinets will be used to store those mother cultures. Plastic trays will play an

important role for transporting the spawn to the mushroom houses for planting and the

same will be utilized for harvesting the fruits to the packaging area. Coolers will serve as

storage for packed fresh oyster mushroom. Moreover, the delivery truck will be used as

a tool in disposing the finished product to the target markets.

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Raw Materials and Supply Requirements

The tables below present the necessary raw materials / inventory and supply

requirement in producing oyster mushrooms. It has the material description, unit, unit

cost and the total cost.

Unit Cost Total Cost

Raw Materials Unit Quantity
(Php) (Php)
Bugas Pinagaling
kg 20 40.75 815.00
(Bukid Rice)
3 Gulaman Bars
bar 20 12.00 240.00

1 liter Distilled Water

liter 5 23.00 115.00
3 tablespoon sugar kg ½ 22.00 22.00
Tipasi nga humay kg 40 20.00 800.00
PP Bags pck 1 760 34.95 61,512.00
PVC Pipe m 283 143.00 40,469.00
Rubber bands
pck 1 760 10.00 17,600.00
(100pcs/pack)
Rice Straw kg 200,000 7.00 200,000.00
Sawdust kg. 60,000 2.00 120,000.00
Agricultural Line kg 2,000 20.00 40,000.00
TOTAL Php 481,573

Production Unit Quantit Unit Cost Total Cost

Supplies y (Php) (Php)

Bottle (Tanduay bttle 50 2.00 100.00

Lapad)
PP Bags (6x12) 100 pck 4 34.95 139.80
pcs./ pack
PVC Pipe m 4 145.00 145.00

Rubber bands (1 pcs.) pc 400 25.00 100.00

Cloth (Cotton) m 5 23.75 118.75

Aluminum Foil roll 8 49.00 392.00

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Rubbing Alcohol (70% liter 4 157.50 630.00

solution)
Alcohol Lamp pc 3 55.00 165.00

Surgical Blade/ set 1 360.00 360.00

Inoculation Needle
Petri Dish/ Platiko pc 10 100.00 100.00

Measuring Cups pc 6 17.00 102.00

Lab Gown pc 3 150.00 450.00

Plastic Gloves pck 1 130.00 130.00

Face Mask pc 4 10.00 40.00

Hair Net pc 4 6.50 26.00

Laddle pc 6 23.75 142.50

Nylon (No. 40) m 100 000 275.00 275.00

Gloves pc 5 100.00 500.00

Shovel pc 5 200.00 1,000.00

Tray pc 10 68.00 680.00

Alcohol Lamp pc 10 55.00 550.00

Weighing Scale pc 3 500.00 1,500.00

Pump Sprayer pc 10 845.00 8,450.00

Plastic Cellophane pck 50 66.85 3,342.50

(10x30) (100’s)
Cellophane Bags pck 20 189.30 3,786.00
(Jumbo) (24x30)
Cartons (48x36x24) pc 200 5.00 1,000.00

Printed Logo (2x3) pc 2 000 7.00 2,000.00

TOTAL Php 300,949.55

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Man Power Requirement

No. of Salary and

Qualifications Responsibilities Status
Position Personnel Benefit
Farm  Must be at least 18  Prepares the RWA, 12 Regular ₧ 5,000.00 per
Workers / years old Spawn / Grain month
Utility Men  At least High School Production,
Graduate  Acquires the raw With 3% increase
 Flexible to Working materials in both every 2 years
Schedule rice straws and saw
 Versatile in dusts. Plus:
Production  Prepares the 13th month pay
Operations substrates, make SSS
 Meet requirements in the fruiting bags, PhilHealth
time steam the fruiting Pag-ibig
 Hardworking bags, store the
fruiting bags, Monthly Rice
 Care – taker of Allowance
mushroom houses,
harvest the fresh
oyster mushroom
and pack the fruits.
Production  At least 25 years old.  Performs the 1 Regular ₧ 7500.00 per
Officer /  At least 2 years in supervision in month
Driver College level planting and
 Flexible to Working producing of oyster With 3% increase
Schedule mushroom every 2 years
 Versatile in  Ensures the
Production quantity and quality Plus:
Operations control measures 13th month pay
 Has driver’s License like the SSS
and has experience temperature and PhilHealth
in driving moisture of the Pag-ibig
mushroom houses
 Delivers the Monthly Rice
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harvested fruits to Allowance

different target
markets.

Technician  Has experience /  Conducts 1 On call On call’s Fee of ₧

expert in horticulture inspections in 2,000.00 per
making the spawn month
and in growing the
oyster mushroom With 3% increase
fruits in the every 2 years
mushroom houses

Personnel Budget
The operation personnel budget covers the salaries and wages, benefits of the personnel in the production. The

production labor cost budget increases every 2 years as presented in financial assumption.

Table 20. Production Labor Cost Budget

No. of Rate per No. of Annual

Designation
Employees Month Months Salary
Production officers/Driver 1 ₧ 7,500 13 ₧ 97500
Farm Workers 12 ₧ 5000 13 ₧ 780,000
Technician (On call) 1 ₧ 2000 12 ₧ 24,000
Total 14 ₧ 14,500 - ₧ 901,500
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Waste and Waste Disposal Method

The proposed business shall ensure measures to be an eco-friendly business

and will expose its waste in proper management of any trashes, residues from

production and other used material on regular basis. The farm will follow guidelines,

rules and regulations set by the Local Government Unit in the Municipality of Ubay in

proper way of disposing wastes. They will abide any environmental acts and regulations

to protect the nature. It will employ specific measures for each type of waste.

The management will implement paper less in handling the business transaction

and operations. Thus, the helps of Electronic device / computer ton hold the records will

be used. Since it is inevitable to use papers, the management will provide trash bins for

segregation of any wastes into biodegradable, non-biodegradable and for hazardous

waste in the farm. Furthermore, the management will also implement different waste

disposal methods namely:

Composting – waste will be classified as biodegradable specifically the used

oyster mushroom substrates after the harvest will be stored in a compost pit to make

suitable, nutrient rich compost that can be used as plant manure and fertilizer for

vegetable propagation, this can be done through vermi compost for fast decaying of

organic matter. This biological reprocessing tremendously improves the fertility of the

soil.

3R’s (Reduce, Reuse, Recycle) – waste will be classified as non-biodegradable,

specifically the use of PP bags will be used as vessels for vegetable propagation. The

management will set a place within the project for site for a small vegetables plantation.
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Those used PVC and rubber bands will be reused if these usable and if not will be

dispose in proper way.

It will be the responsibility of the utility men and farm workers to see if the farm’s

environment is clean and there is and observance in the proper disposal.