Chapter No.

Ideal Design of Commercial

Plant Tissue Culture Laboratory
 IDEAL DESIGN OF COMMERCIAL
PLANT TISSUE CULTURE LABORATORY

Contents

7.1 Introduction
7.2 Planning
7.3 Designing a Small Laboratory
7.4 Designing a Commercial Tissue Culture Laboratory
7.4.1 Laboratory Location
7.4.2 Laboratory Structure
7.4.3 Structural Design of The Laboratory
7.4.4 Laboratory Cleanliness
7.4.5 Laboratory Power Supply
7.4.6 Laboratory Production Capacity
7.5 Green House
7.6 Financial Analysis of an Ideal Commercial Banana
Tissue Culture Laboratory
 DESIGNING A PLANT TISSUE CULTURE LABORATORY

7.1 Introduction

Plant Tissue Culture is rapidly becoming popular for the commercial

propagation of important plant species, rare species, and also for some plants
which are otherwise difficult for propagation. Tissue culture is emerging in
India as an Industry in its completeness. Currently, the demand for
micropropagated banana plants is greater than the supply. Some plant tissue
culture laboratories propagate plantlets as well harden them. Some laboratories
specialize in only the micropropagation of plantlets and leave hardening to
others.

To become financially viable, the banana tissue culture project must operate at
optimum level of production. For optimum level of production, the tissue
culture laboratory should be designed after taking into consideration the entire
available space which should be utilized to its full capacity. The laboratory
design is a major factor affecting the productivity and financial viability of the
banana tissue culture project.

Design of tissue culture laboratory generally comprises of glassware washing

area, storage room, media preparation and sterilization room, inoculation room,
primary growth room, culture transfer room, office, library etc. A green house
is required for hardening and acclimatizing the plantlets produced in the
laboratory. The floor plan of the laboratory should be designed to promote
maximum efficiency. The design should facilitate maintenance of required
temperature, humidity, illumination and ventilation and laboratory should be
free from dust particles.

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In designing the plant tissue culture laboratory, big or small, certain elements
are essential for a successfiil operation. The correct design of a laboratory will
not only help maintain aseptic conditions, but will also achieve a high standard
of work.

7.2 Planning

Planning is very much important in every aspect while starting a tissue culture
laboratory. Careful planning is required while considering the size and the
location of the laboratory. Several visits must be undertaken to observe the
location from the point of view of availing of several facilities and their
arrangement and operations. Design of the rooms, space availability for green
house etc. should be kept in mind while deciding the location and buying the
premises.

Depending upon the space availability, the laboratory can be divided into
separate rooms. The room sizes can be decided according to the production
capacity of the laboratory. The most important step in designing the laboratory
is planning the installed capacity i.e. the production capacity of the laboratory.
More laboratory space and green house space will be required for huge and
mixed type of production.

7.3 Designing a small laboratory

Before starting a big commercial tissue culture laboratory the company should
try out its operations in a small start-up laboratory until the proper techniques
and markets are developed. Such a tiny start-up laboratory can be a future
Research and Development unit of the laboratory and can be used for specific
Research and Development pursuits. A convenient accommodation for a small

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start-up laboratory is a room or part of the basement of a house, a garage, or a
room in the house. The minimum area required for media preparation, transfer
and primary growth shelves is about 200 sq. ft. from which, most of the space
can be allocated for transfer and primary growth room. With proper water and
electric supply the laboratory can start its ftinctions.

7.4 Designing a Commercial Tissue Culture Laboratory

Following points must be considered while designing the Commercial Tissue

Culture Laboratory:

7.4.1 Laboratory Location

The location of the laboratory should be decided after considering the cost of
land. Laboratory in urban area will always be expensive as compared to rural
area. Transportation, availability of raw material, manpower etc., must also be
considered while deciding the location.

A good location of the laboratory includes the following:

1. Isolation from foot traffic: Tissue culture technique requires highest
amount of cleanliness. The laboratory should be away from a place where
lot of people move around. Commercial buildings should be avoided for a
tissue culture activity.
2. No contamination from adjacent rooms: In tissue culture, contamination
in the cultures is considered as the highest risk that a laboratory owner has
to face. In all possible ways sources of contamination should be restricted.
There should not be any possibility of contamination from the neighbouring
rooms. Tissue culture laboratory should be away from industrial production
units that emanate dust, pollution etc.

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3. Constant water supply and drains for a sink: A lot of water is required in
almost every activity of tissue culture. Water is required for washing the
glass vessels and other equipments. A lot of water is required for the water
distillation unit. In general, large amount of water is required in tissue
culture activity, with which extreme cleanliness can be maintained. To have
a constant water supply, separate water connection, exclusively for the
laboratory and green house is desirable. Proper arrangement for water
storage should be done.
4. Adequate electrical supply: Tissue culture needs 24 hours of constant and
stable flow of electricity. In case of short-time power cuts the production
gets halted and some of the production cycles may be lost. In case of major
power cuts the entire production procedure gets halted for a long time and
the plants in the laboratory start blackening and drying. In such case all the
plants may be lost. Blackening and drying happens because these plants do
not get light for photosynthesis. The laboratory should have an UPS
(Uninterrupted Power Supply) unit giving atleast 10 hours of back up or
alternatively a generator which can provide the continuous power supply.
5. Good natural lighting: The Laboratory should have more of natural light
coming in the laboratory especially in washing area and media preparation
room. If a good amount of natural light is available, electricity can be saved.
6. Market and transport facility: The Laboratory should be located at such a
place from where the transport facility is easily available.
7. Proximity to the target market: The target market should be near to the
laboratory. Farmers should be able to get in touch with the laboratory for
purchase of plants as well as for technical assistance.

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7.4.2 Laboratory structure
Larger commercial laboratories are frequently built as free standing exclusive
buildings. Although more expensive to build because of land and construction
cost, the added isolation from adjacent activities will keep the laboratory clean.
Added advantage of such type of building is that it can also accommodate a
green house in the same compound. The laboratory can be expanded in any
way in future because it is a separate building.

Before starting the construction of the laboratory following points should be

taken into consideration:

1. Check with local authorities about zoning and building permits.

2. Locate the building away from sources of contamination such as gravel,

driveway or parking lot, soil mixing area, shipping dock, pesticide
storage, dust and chemicals from the fields.

3. The floor should be concrete and capable of carrying a minimum weight

of fifty pounds per square foot.

4. The Walls and the ceiling should be insulated to reduce the out side heat
and should be covered from inside with a water-resistant material.

5. Windows, if desired, may be placed wherever convenient in the media

preparation and glassware washing rooms.

6. Water service is available for twenty-four hours.

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7. Connection to a septic system or sanitary arrangements should be
provided.

8. High voltage electricity should be available for running equipments and

lights. Future expansion should be calculated before hand. A minimum
hundred ampere service is recommended.

7.4.3 Structural Design of the Laboratory

1. Glassware Washing Area and Storage Room

As per experts' suggestions, considering total area of the laboratory as five

thousand square feet, glassware washing area and store room combined should
be of three hundred square feet. The glassware washing area should be located
near the sterilization and media preparation areas. When culture vessels are
removed from the growth area, they are often autoclaved to kill contaminants
or to soften semi-solid media. The vessels can be easily moved to the washing
area if the autoclave or pressure cooker is nearby. Locate the glassware storage
area close to the wash area to expedite storage; these areas also need to be
accessible to the media preparation area.

The glassware area should be equipped with at least one large sink, preferably
two sinks. Adequate work space is required on both sides of the sink, this space
will be used for soaking glassware tubs and drainage trays. Plastic netting can
be placed on surfaces near the sink to reduce glassware breakage and enhance
water drainage. The pipes leading from the sink can be of PVC to resist
damage from acids and alkalis. Both hot and cold water should be available
with water distillation and/or deionization devices nearby. Mobile drying racks
can be stored nearby and lined with cheesecloth to prevent water dripping and
loss of small objects. Locate ovens or hot air cabinets close to the glassware

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washing and storage area. Dust-proof cabinets, low enough to allow easy
access, can be used in the storage area.

2. Media Preparation And Sterilization Room

As per experts' suggestions, considering total area of the laboratory as five

thousand square feet, media preparation and sterilization room combined
should be of three hundred square feet. The water source and glassware storage
area should be at a convenient location from the media preparation area.
Benches, suitable for comfortable working while standing (about 3 to 3.5 ft.)
and long enough (about 6 ft.) to hold equipment and prepare media are
essential. Their tops should be made with molded plastic with laminated
surfaces which can tolerate frequent cleanings. In the process of media
preparation, a lot of heat and humidity is generated. Hence this room requires
the exhaust fans. It is ideal to have one or two windows in this room.

There is a variety of equipment available for micropropagation laboratories;

these equipments are generally located in the media preparation area. The
equipment budget will determine the type and the make of the equipment and
number of units purchased.

Banana tissue culture laboratories need the following basic equipments:

1. Refrigerator/freezer: This is needed to store chemicals and stock

solutions at a particular temperature.
2. Water distillation unit: Sterile water is used in all the operations in the
laboratory, especially while preparing the media. Laboratory can purchase
distillation and deionization devices; these would normally be located in
the glassware washing area. Small, inexpensive, low production

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 distillation devices can be purchased from the glass blowers or can be
bought which are made to design.
3. Weighing Balances: High quality weighing balances are essential for a
micropropagation laboratory; this is one area where it is difficult to find
an inexpensive substitute. Top pan balance is used for measuring larger
quantities above 10 grams, while analytical balance is used for measuring
smaller quantities of 2 miligram.
4. Hot plate/stirrer: At least one hot plate with an automatic stirrer is
needed to make semi-solid media. Using a stove and hand stirring the
media while it heats can eliminate this purchase; however, the time saved
by using a stirring hot plate is worth the money spent.
5. pH meter: This is needed to measure pH of the media. Some laboratories
use pH indicator paper, however this method is considerably less accurate
and could severely affect the results.
6. Autoclave: An autoclave is a vital part of a micropropagation laboratory.
High-pressure heat is needed to sterilize the media, water, glassware, and
utensils. Certain spores from fungi and bacteria will only be killed at a
temperature of 121 F and presence of 15 pounds per square inch.
Electrically operated steam autoclaves are more dependable and faster to
operate.
7. Bottle Washing Unit: Since large numbers of bottles or vessels in which
plants are to be grown are required to be washed repeatedly before and
after use, an automatic bottle-washing unit would be helpfiil for this
purpose.
8. Laminar Air - flow stations: This is a clean bench with protection of
Ultra Violet light with HEPA filters which assures cleanliness at the time
of inoculation and subculture. In these stations shoots developed on
explants are separated from clusters and transferred to fresh medium
under sterile condition. Inoculations are also done here.

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9. Dissecting Kits: These are necessary for separation of shoots and
preparation of microcuttings. They are scalpels, forceps, blades etc.
10. Air-conditioners with Stabilizers: Maintenance of desired temperatures
in growth room, inoculation room or culture transfer room would be
possible by air-conditioning these areas.
11. Microscopes: Stereo microscope - This would enable dissecting out
small size meristem from shoot tips by removing the protective covers of
leaves. Compound microscope - This enables detection of bacteria and
fungus in culture and plant tissues.
12. Computer System: Computerization of laboratory in the following
aspects would be helpful:
Production Planning
Time scheduling of Sub - culturing
Quality control of plantlets
Growth room status
Material requirement
Market planning etc.
Excess automation for production should be avoided.

13. Optional equipments: A variety of non-essential equipments are

available for tissue culture laboratories. Individual needs and equipment
cost will determine what can be purchased. Microwave ovens are
convenient for defrosting frozen stocks and heating agar media.
Dissecting microscopes are useful to have in the laboratory for
meristeming, dissecting floral and shoot apices and observing plant
culture growth. Labwashers or regular dishwashers, can be useful.
Automatic media dispensers are helpful when pipetting large volumes of
media. The Average cost of the above mentioned equipments runs
between ten thousand to thirty thousand each. These equipments are used
for convenience by some laboratories but are not essential to own.

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3. Primary Growth or Culture Incubation Room

As per experts' suggestions, considering total area of the laboratory as five

thousand square feet, there should be three primary growth or culture
incubation rooms measuring one thousand square feet each. Temperature,
relative humidity, lighting units and shelves need to be considered in the
culture room. All of these environmental considerations will vary depending on
the size of the growth room, its location and the type of plants grown. For
example, a small primary growth room located in a Mumbai will require good
amount of air conditioning and 24 hours cool atmosphere, considering outside
humid environment. The ballasts from the fluorescent lights should be
separated and should be located outside the primary growth room to reduce
generation of heat near the cultures.

Temperature is the primary concern in culture rooms. It affects decisions on

lights, relative humidity and shelving. Generally, temperature is kept between a
minimum of fifteen degrees to a maximum of twenty five degrees. Cooling the
room is usually a greater problem. Installing air conditioners of higher capacity
is a must. Air cooler and fans are not to be used due to faster air circulation.
Using outside windows to cool culture rooms invites contamination problems
in summer and humidity problems in winter. Some laboratories are designed in
such a way that double walls are provided for insulation and at some places
mud is filled up in these walls for keeping the inside atmosphere cool.

Some plant cultures can be kept in complete darkness. However, most culture
rooms are lighted at 1 lux with some going up to 5 to 10 lux. Different plant
species require different amount of light at different stages of growth. This is
called as a photo period. Typical photo period is required for the growth of the
banana plants in the culture vessels at every stage. For example, at shooting
and multiplication stages, the banana plant requires fourteen to sixteen hours of

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photo period, whereas at the incubation stage it requires a full dark period. It is
also observed that rooting requires comparatively less photo period.

For providing the photo period required for photo synthesis of the plants, cool
white fluorescent lights are used. Automatic timers are needed to maintain the
desired photo period. Heat generated by the lights may cause condensation and
temperature problems. During the photo period, the temperature in the culture
room should be maintained cool with the help of air conditioners.

Maintaining a desired humidity in the culture incubation room is an important

task from the plant production point of view. Relative humidity is difficult to
control inside growing vessels, but fluctuations in the culture room may have a
harmful effect. Cultures can dry out if the room's relative humidity is less than
50%. Humidifiers can be used to correct this problem. If the relative humidity
becomes too high, a de-humidifier is recommended.

Shelving within primary growth rooms can vary, depending upon the space
availability and the plants grown. Specially fabricated culture racks with wire
mesh are recommended. These racks should be plastic coated to avoid rusting
and should be white in colour to reflect the room's light. Some laboratories also
use wooden racks. The plastic coated metal racks are more expensive than
wood, but provide better air circulation with wire mesh of 1/4 or 1/2 inch air
spaces. Distance of two to four inches between the lights and shelves will
decrease bottom heat on upper shelves and condensation in culture vessels.

A room that is eight feet high will accommodate five shelves each, eighteen
inches apart, when the bottom shelf is four inches off the floor. The top and
bottom shelves may be difficult to work.

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Apart form the above equipments such as refrigerator, rotary shakers, a stand-
by Generator set, fire extinguisher, oven, air filters and furniture would be
necessary.

4. Aseptic Transfer Area or Inoculation Room

As per experts' suggestions, considering total area of the laboratory as five

thousand square feet, there should be two aseptic transfer areas or inoculation
rooms measuring one thousand square feet each. In addition to the primary
growth room, the aseptic transfer area needs to be as clean as possible. It is
preferable to have a separate room for aseptic transfer. This decreases spore
circulation and allows personnel to leave shoes outside the room. Special
laboratory shoes and aprons should be worn in this area. Laminar air flow
stations are placed in this room and used for all aseptic work. Ultraviolet lights
are installed in transfer areas to disinfect the room. Ultraviolet lights should be
used when people and plant material are not in the room. Safety switches can
be installed to shut off the ultraviolet lights when regular room lights are turned
on. Surfaces inside the aseptic transfer area should be smooth to minimize the
amount of dust that settles.

5. Administrative Office and Library

As per experts' suggestions, considering total area of the laboratory as five

thousand square feet, administrative office and Library combined should be of
four hundred square feet. The office of the laboratory will be mainly used for
general administration of the laboratory as well as for managing Purchases,
Sales and Marketing.

The office of the laboratory should have the facilities such as Fax Machine,
Telephone, Computers etc. for quick communication.

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The library of the laboratory should be equipped with all the leading journals
and books on biotechnology and plant tissue culture, latest science journals,
business magazines and other reference material.

7.4.4 Laboratory cleanliness

Cleanliness is the major consideration when designing a plant tissue culture

laboratory. On an average fifteen percent of the total operating expenditure is
incurred for maintaining cleanliness in the tissue culture laboratory. Most
companies are not aware of their losses from contamination, but estimates run
from less than one percent to fifty percent. When plant tissue culture is used for
production, it is considered that the cost of the product is high and no losses
from contamination are acceptable. Routine cleaning and aseptic procedures
can reduce the losses to less than one percent.

Laboratories should have easy to wash walls and floors. Acrylic or washable
wall paints can be used for painting. High Efficiency Particulate Air fifters or
air curtains of a reputed manufacturing brand can be installed over air intakes
of the laboratory. If possible, an enclosed entrance should precede the
laboratory. Sticky mats or Dettol water for cleaning feet should be laid at the
entrance to help collect dirt from outside. Shoes should be removed while
entering the laboratory.

The traffic pattern and workflow in a laboratory must be considered in order to

maximize cleanliness. The cleanest rooms or areas are the culture room, i.e. the
primary growth room, and the aseptic transfer area. The location of these rooms
should be at the back-end in the innermost part of the laboratory so as to
obstruct a direct entry from the outside of the building. The media preparation
area, glassware washing area or storage area should be located surrounding

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culture rooms. The primary growth room and aseptic transfer room should be
enclosed with doors leading to each other. Installing pass-through windows can
minimize traffic through these areas. Ideally, the media preparation area should
lead to the sterilization area, which would lead to the aseptic transfer room and
eventually the primary growth room.

7.4.5 Laboratory power supply

Professional electricians must do electrical installation because tissue culture

laboratory requires an unusually more supply of electricity. Fire safety also
needs to be considered. Most of the wiring will require 110 volts temperature.
For the safety of the laboratory, fire alarms should be connected directly to
telephone lines to give fast warnings of the problems. A generator set should be
available to operate essential equipments during emergency.

7.4.6 Laboratory production capacity

The size of the tissue culture laboratory could be expressed in terms of the
capacity to produce tissue cultured plants. Total production capacity of the
laboratory should be calculated according to the floor area available at disposal.

It was found in the data analysis from sample population of this research work
that the commercial tissue culture laboratories set up in Maharashtra are of
different scales viz. small scale, medium scale and large scale. These
laboratories have production capacities which vary from Seventy five thousand
to eight and half million tissue cultured banana plants approximately, per year.
The minimum production size advised by the tissue culture experts in the
research work is one million tissue cultured banana plants per year. Tissue
culture experts have estimated that to produce one million tissue culture banana

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plants, five thousand square feet area of the laboratory is required. For
hardening tissue cuhured banana plants produced in the laboratory and for
maintaining mother plants of banana species, a green house facility of five
thousand square feet is required.

To generate maximum revenue, the laboratory should undertake product

projections and carry out maximum production.

7.5 Green House

According to tissue culture experts, for a laboratory producing one million

banana plants, a green house measuring five thousand square feet should be
available. Green house is a structure covered with a transparent material which
permits natural light for plant growth. Green house is essential for production
of good quality banana plantlets produced in the commercial tissue culture
laboratory. It enables the protection of banana plantlets against rain, frost,
storms, sudden infestations of insects, periods of excessive moisture etc. Tissue
culture grown banana plants can be protected from natural calamities if they are
kept in the green house for further growth. If required, the green house
structure can also enable control of temperature, light and humidity. According
to some green house workers, production is ten times higher in green house
than in open field.

The frame for green house should be of bamboo, wood or steel structure. Wood
or bamboo frames should be used for narrow green house, generally under six
meters in width. Pipe frames can serve well upto width of twelve meters.
Greenhouses under fifteen meters width or over could be built on a strong
frame. Flat steel, tubular steel or angle irons are welded together to form a
strong frame. To construct a low-cost green house, a bamboo or a wooden

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structure is used. Green house made up of steel costs more, but is found
beneficial in the long run.

Various types of materials are available for covering roofs of green houses.
They are float glass, plastic films, fiberglass reinforced plastic, acrylic panels
and polycarbonate panels. Each has its advantages and disadvantages.
Ultimately cost and efficacy decide the selection of the roofing material. There
are places where glass is still dominant for reasons including tradition, belief
that light intensity is higher inside and strength to hold up against wind loads.
However, the predominant choice of the green house industry during 1999-
2000 appears to be the plastic film. Plastic roof green houses are the least
expensive to build. Various plastic films are used in building the green house.
Polyethylene has been the principal choice of plastic films for greenhouses,
especially in Maharashtra. There are various films available as per the sunlight
requirement. Some films transmit seventy-five percent of the visible light of the
sun and some transmit sixty percent and some fifty percent. The disadvantage
of this film is its short life. The best quality ultraviolet light resistant
polyethylene films generally last for three years. Ultraviolet light from the sun
causes the plastic to become brittle and dark in color.

There are five major types of greenhouses:

• Tunnel Type: Tunnels of about two meter height can be constructed by
bending bamboo or steel tubes. The structure is covered with
polyethylene.

Ground-to-Ground Type: This can be constructed by using steel tubes.

Usually it has width ten meters, length thirty to forty meters and height at
the centre three to four meters. Covering material is high density
polyethylene.

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 • Even span or Gable type: This type has two roof slopes which are of
equal pitch and width. Height at the gutter is about three meters and
around the centre it is about four to four and half meters. Round or square
steel tubes can be used. The covering materials could be glass,
polycarbonate or polyethylene.

• Quonset Type: The roof of this type is semi-round in shape. The

covering material could be a polyethylene or polycarbonate panel.

The cost of the green house depends upon the type of material used for
construction of the green house. The green house cost also includes the cost of
misting system, sprinklers, water points, exhaust fans, cooling pads, humidity
chambers and racks.

It is to be noted that greenhouse location is as important as the greenhouse

design itself Factors to be considered while selecting the location are room for
further expansion, well-drained site, favorable climate, labour availability,
accessibility of the laboratory area and reasonable proximity to utilities and
target market, a plentiful supply of good quality water and electricity.

In the commercial tissue cultural propagation of banana, green house is

required primarily for the following reasons:

• To harden the plantlets gradually in natural environment.

To raise and maintain mother plants for future production cycles.
To carry out research and experiments in hardening.

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Green house will enable the control over light intensities and humidity, which
is necessary for hardening of banana plants. Green house is required for the
acclimatization of bottle-grown banana plants to the natural environment in the
Green house.

However, in case of hundred percent export oriented projects, it may be

possible to export the plantlets directly from the laboratory without subjecting
them to hardening.

Laboratory developed at Mahatma Phule Krishi Vidyapeeth, Rahuri.

Mahatma Phule Krishi Vidyapeeth at Rahuri has developed one ideal plant
tissue culture laboratory as a guideline to the agriculture students. For
designing and implementation of this laboratory, the Government of
Maharashtra has given a financial grant of rupees forty lakhs. An architectural
firm, 'Ravindra Shinde and Associates', has designed the laboratory. The
design of this laboratory can be seen at the end of this research work as
Annexture No. 4.

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7.6 Financial Analysis of an Ideal Commercial Banana
Tissue Culture Laboratory

Based on the views expressed by Banana Tissue Culture Experts and the
researcher's observation during field visits, following financial analysis can be
obtained in respect of an ideally designed banana tissue culture laboratory.

Laboratory Details:
1) Unit Size: One Million Banana Plantlets
2) Laboratory Area: 5000 Sq.ft. Green House Area: 5000 Sq.ft.

Estimated Cost

Particulars Year
1 2 3 4 5
1 Fixed Cost 72,30,000 - - - -

2 Recurring Cost 5,43,263 11,28,023 15,43,688 20,14,871 21,80,058

Total Cost 77,73,263 11,28,023 15,43,688 20,14,871 21,80,058

(a) Fixed Cost:

Item Particulars Amount (Rs.)
1) Tissue culture laboratory (Annexure 'A') 35,00,000
2) Laboratory Equipments (Annexure 'B') 29,30,000
3) Furniture, Fixtures and Office equipments 50,000
(Annexure 'C')
4) Water supply system (Annexure 'D') 20,000
5) Green house & green house equipments 7,00,000
(Annexure 'E')
6) Protocol Charges 30,000
TOTAL 72,30,000

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Annexure 'A'
Tissue culture laboratory
No. Description Area Amount
(Sft.) (Rs.)
1) Glassware washing area & Storage room 300 35,00,000
2) Media preparation & Sterilization room 300
3) Primary growth or culture incubation
Rooms (3 Nos. of 1000 sq. ft. each) 3000
4) Aseptic transfer or inoculation room
(2Nos. of 500 sq.ft. each) 1000
5) Administrative Office & Library 400
Total(Rate @ Rs 700/- per Sq.ft.) 5,000 35,00,000

Annexure 'B'
Laboratory Equipments
No. Particulars Rate Amount
1) Autoclave 1,50,00C
2) pH meter 15,00C
3) Digital Balance 10,00C
4) Laminar Flow Station 4 Nos. 60,000 2,40,00C
5) Distillation Unit 50,00C
6) Computer 25,00C
7) Air Conditioners 5 Nos. of 1.5 Tonnes 1,75,00C
8) Incubation Racks 250 Nos.
Cost: 2,400 x 250 6,00,000
Tube Light with Fitting 4,000 Nos.
Cost: 4,000 X 200 8,00,000 14,00,000
9) Generator 30,00C
10) Refrigerator 10,00C
11) Bottles including Autoclavable caps 1,50,000 5 7,50,00C
12) Misc. glassware i.e. Test Tubes Beakers, 5,000
Flasks etc.
13) Other light fittings of the rooms with cable, 70,000
wiring, boards, MSEB deposits, charges etc.
Tola 29,30,00C

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(b) Recurring Cost:
Particulars Rate Year1 Year 2 Year 3 Year 4 Year 5
Production 10,000 5,00,000 7,50,000 10,00,000 10,00,000
Sales 6.5 NIL 32,50,000 48,75,000 65,00,000 65,00,000
Costs
Inoculation 20,000
Media Preparation 2,625 1,05,600 1,74,240 2,55,552 2,81,107
Power 30,000 1,65,000 2,47,500 3,30,000 3,30,000
Hardening Cost 0.50 / plan 5,000 2,75,000 4,53,750 6,65,500 7,32,050
Wages
Scientist 1 5000 p.m 60,000 66,000 72,600 79,860 87,846
Operators 8 2000 p.m 1,92,000 2,11,200 2,32,320 2,55,552 2,81,107
Attendant 3 500 p.m 18,000 19,800 21,780 23,958 26,354
Subtotal A 3,27,625 8,42,600 12,02,190 16,10,422 17,38,464
Admin Cost
Salary
Office Attendant 1 2500 p.m 30,000 33,000 36,300 39,930 43,923
Rates & Taxes 10000 p.a 10,000 11,000 12,100 13,310 14,641
Insurance 36250 p.a 36,250 39,875 43,863 48,249 53,074
Printing And
Stationery 2500 p.a 30,000 33,000 36,300 39,930 43,923
Periodicals 5000 p.a 5,000 5,500 6,050 6,655 7,321
Repairs & Maint 25000 p.a 25,000 27,500 30,250 33,275 36,603
Subtotal B 1,36,250 1,49,875 1,64,863 1,81,349 1,99,483
Selling & Dist. Exp.
Packaging 0.50/plan 5,000 5,500 6,050 6,655 7,321
Advertising 25000 p.a 25,000 27,500 30,250 33,275 36,603
Subtotal C 30,000 33,000 36,300 39,930 43,924
Subtotal A + B + C 4,93,875 10,25,475 14,03,353 18,31,701 19,81,871
Contingencies 10% 49,388 1,02,548 1,40,335 1,83,170 1,98,187
Total 5,43,263 11,28,023 15,43,688 20,14,871 21,80,058
Profit -5,43,263 21,21,978 33,31,312 44,85,129 43,19,942
Depreciation @ 20% 14,46,000 11,56,800 9,25,440 7,40,352 5,92,282
Profit Before Tax -19,89,263 9,65,178 24,05,872 37,44,777 37,27,660
Loss Carried
Forward -19,89,263 -10,24,085
Taxable Income NIL NIL 13,81,787 37,44,777 37,27,660
Taxes @ 40% 5,52,715 14,97,911 14,91,064
Profit After Tax 8,29,072 22,46,866 22,36,596
Variable Cost/Unit 2.26 2.06 2.01 2.18
* Variable Cost Per Unit = Total Recurring Cost / No Of Units

(c) Depreciation

Particulars Yearl Year 2 Years Year 4 Years

Fixed Assets
Opening WDV 72,30,000 57,84,000 46,27,200 37,01,760 29,61,408
Less Depreciation @ 20% 14,46,000 11,56,800 9,25,440 7,40,352 5,92,282
Closing WDV 57,84,000 46,27,200 37,01,760 29,61,408 23,69,126

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Annexure ' C
Furniture, Fixtures & Office equipments

No. Particulars Amount

1) Tables, Chairs & Stools, Cupboards, Telephone, 50,000
Miscellaneous
Tota 50,00C

Annexure 'D'
Water Supply System

No. Particulars Amount

1) Separate water line, purchase of pipes & fittings, paying, 20,000
PMC charges & deposits, related plumbing work including
water storage tank (Sintex 20 Itrs.) & Sink fitting
Tota 20,000

Annexure 'E'
Green house & green house equipments

No. Description Area (Sft.) Amount

1) Green House area 5,000 5,00,000
2) Green House making charges 2,00,000
Total (Rate @ Rs.700/- per Sq.ft.) 7,00,000

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Financial Viability

(1) Calculation of Internal Rate of Return

SR + (Surplus at SR /(Surplus at SR + Deficit at ER) * Diff Between ER and SR)
* SR = Start Rate * ER = End Rate
20 + [( 4,85,760 / (4,85,760 + 10,32,071) * (30-20)]
IRR = 23.20 %

• Calculation of IRR
Particular i Cash flow Disc factor Present Value Disc factor Present Value
20% 30%
Year 1 -77,73,263 1.00 -77,73,263 1.00 -77,73,263
Year 2 19,77,578 0.83 16,47,322 0.77 15,20,757
Year 3 31,32,136 0.69 21,73,703 0.59 18,51,093
Year 4 42,45,116 0.58 24,57,922 0.46 19,31,528
Year 5 41,08,040 0.48 19,80,075 0.35 14,37,814
4,85,760 -10,32,071

(2) Benefit Cost Ratio

PV of Net Cash Inflows / PV of Net Cash Outflows
*PV = Present Value
BCR= 1,29,88,625 / 1,20,02,181
BCR=1.04

(3) Net Present Worth

PV of Net Cash Inflows - PV of Net Cash Outflows
1,29,88,625-1,20,02,181
NPW= 9,86,444/-

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• Calculation of Present Value
Particulars Inflows DF @ 20% Present Value
Year 1 - 1.00 -
Year 2 32,50,000 0.83 27,07,250
Year 3 48,75,000 0.69 33,85,200
Year 4 65,00,000 0.58 37,61,550
Years 65,00,000 0.48 31,34,625
PV of net Inflows 1,29,88,625
Particulars Outflows
Yearl 77,73,263 1.00 77,73,263
Year 2 11,28,023 0.83 9,39,643
Year 3 15,43,688 0.69 10,71,937
Year 4 20,14,871 0.58 11,66,006
Years 21,80,058 0.48 10,51,333
PV of net outflows 1,20,02,181
Net Present Value at 20 % 9,86,444

(4) Breakeven Point for the project

Breakeven Ratio = Fixed Cost / Contribution Per Unit
Fixed Costs =72,30,000
Contribution Per Unit = Selling Price per unit - Variable Cost per unit
= Rs. 6.50 (-) Rs. 2
- R s . 4.50
Breakeven Point = 16,06,666 plantlets

Notes:
It was found from the data analysis that 58 % of the banana tissue culture
Laboratories in Maharashtra were situated in and around Pune. Experts
feel that climatic conditions at Pune are most suitable and in view of the
availability of accommodation including the area for green house, the
ideal laboratory location is considered to be at the outskirts of Pune.
In the year 1999-2000 the industry rate of banana tissue cultured plants
was Rs. 10/- per plant. According to the interviews taken by the
researcher, the agriculturists could not afford Rs. 10/- per plant. In the

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 financial analysis of the ideal tissue culture laboratory, the sale price is
considered at Rs. 6.50/-, which is the price at which the laboratory would
yield profit. This price could also be affordable to the farmers.
3. It was found that in the first year of the project, the production does not
result into sales as part of the plantlets are used for next year's production
and part of the plantlets are distributed for popularizing the theory of
tissue culture.
4. The tax rate assumed at 40% is with a conservative thought line of tax
structure.
5. The variable cost after calculation is rounded off to Rs. 21-
6. According to the accepted industry norms, tissue culture venture having
IRR higher than 17% is considered to be viable. The IRR of ideal banana
tissue culture project is 23.20%; hence it is not only viable but also found
to be profitable.
7. According to the industry norms. Cost Benefit Ratio of 1.04 for Banana
Tissue Culture Project is considered as satisfactory.
8. For any project to be viable the Net Present Worth should always be
positive. In the project under consideration the Net Present Worth is Rs.
9,86,444/-, which is satisfactory, according to the experts.
9. The calculation of IRR is done by Trial and Error Method, with a start
discount rate of 20%, which results into a positive net cash flow. It is
fiirther increased by the discount rate of 30%), which results in a negative
net present value. Then the exact internal rate of return is calculated by
interpolation.
10. For the calculation of IRR, NPW and Benefit Cost Ratio, the taxes and the
tax shield on depreciation is ignored.
11. The first year of the project incurs losses due to no sales and high
depreciation charge and recurring costs. In the second and the third year,
the business would yield income as the sales begin; even when the losses

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 of the first year would be set off against the surplus in the second and the
third year. In the fourth year and thereafter the business would yield
profits.
12. The depreciation has been calculated by written down value method at a
20% per annum on the fixed assets.
13. The cost relating to the fixed assets and the other production and overhead
cost are considered at the prevailing market rates viz. 1999-2000.
14. The cost of mother plants is considered as production costs, which will be
incurred, in the first year itself
15. It is assumed that the owner will incur the project cost. Alternatively bank
loans can be availed and additional interest and service charges will be
incurred which may have to be considered.
16. The costs incurred and the income earned is entirely on cash basis.
17. The total production in the first three years is 12,60,000 plantlets. The
production in the fourth year would be 10,00,000 plants whereby the total
production would be 22,60,000 which will exceed the breakeven point of
the project which is calculated at 16,06,666 plantlets.

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