Business plan for a complex for growing oyster mushrooms, with a financial model
DATE OF THE REPORT: 03/18/2019
SCOPE OF THE REPORT: 138 pages, 58 tables, 17 graphs and 10 diagrams, 4 fig.
METHOD OF PROVIDING: in electronic form
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The document is an economic justification for the feasibility of building a complex for growing cultivated oyster mushrooms and describes all the stages of creating this business.
The document is a detailed description of the step-by-step process of opening a farm, supplemented by an automated tool for calculating the economic efficiency of the project (financial model). The document is updated on an annual basis, which makes it possible to timely correct the blocks related to obtaining permits, tax payments, as well as the conceptual component of the project.The business plan also includes a marketing analysis of the oyster mushroom market, containing such key market data as:
- oyster mushroom production in the Russian Federation;
- key current and announced projects on the market and their capacity;
- location of current production facilities by region;
- the volume of imports on the market;
- the volume of the total supply of oyster mushrooms in the Russian market;
- market capacity by region;
- market pricing policy;
- volume and dynamics of development of the adjacent segment - champignons;
- market development trends.
With the help of a business plan and accompanying financial model, potential investors will be able to:
- get acquainted with the main market trends and choose a promising region for the location of production;
- understand the sequence of tasks for opening a farm;- understand the production technology of oyster mushrooms;
- to understand the specifics of the business (cost structure and the mechanism for generating income, cost items of the investment stage, business efficiency);
- compare various options for implementing the project and choose the most successful one (own substrate workshop / building construction / composition of the substrate block / duration of the production cycle, etc.);
- determine the optimal pricing policy;
- choose the most effective project financing scheme;
- to determine the optimal ratio of own and borrowed funds;
- assess the risks of project implementation.The business plan was drawn up taking into account the requirements of UNIDO, has repeatedly passed the approval procedure in credit institutions of Russia.
Total area of the complex: 622 sq.m.
Number and area of mushroom chambers: 6 by 36 sq.m.
Production capacity: 84 tons per year
Substrate loading: 143 kg per 1 sq.m. cameras
Product yield: 32 kg of mushrooms per 1 sq.m. cultivation
Products sold: fresh and dried oyster mushrooms
Pricing policy: 1 kg of fresh mushrooms - 164 rubles, 1 kg of dry mushrooms - 695 rubles.
Ownership: ownership of the land, construction of a modular production building, climate modulatorConcept the mushroom farm presented in this project is basic. If necessary, it can be easily adjusted, while all financial indicators of the project can be automatically recalculated using the attached model (see below "Features").
The implementation of the project is possible in any region of the Russian Federation, in this investment project the option of opening a farm in the Moscow region, 70 km from the key sales market - Moscow, is considered.1) The business plan has been developed in cooperation with existing farm owners and industry experts, therefore it will be extremely useful for entrepreneurs who have no experience in creating mushroom farms.
2) Financial calculations were carried out using Excel-model, which is a proprietary development of Inventica.
3) The financial model is 100% automated:• Values of project parameters can be changed.
• The total number of parameters - over 500 (the month of the start of the project, the list and cost of obtaining permits, the area of premises, the specification of equipment and its cost, the staffing table, the mass of the substrate block, the yield of the finished product from the mass of the substrate, the duration of the production cycle, the cost and amount of mycelium required for the production of 1 kg of oyster mushrooms, the structure of sales channels, the share of products supplied for drying, the cost of selling products, lending parameters, etc.).
• Changing any of the project parameters leads to automatic recalculation of the model.
• The ability to quickly recalculate allows you to independently calculate various strategies and scenarios for the development of your business, even if you do not know the basics of financial modeling and investment management.
Thus, you get a universal decision-making tool, with the help of which you can correct the concept of the project, choosing the optimal values of the parameters of your future business.
CHAPTER 1. PROJECT SUMMARY 10
ESSENCE OF THE PROJECT, DESCRIPTION OF ACTIVITIES 10
MAIN OBJECTIVES OF THE PROJECT 10
DIRECTION OF MARKETING EFFORTS 11
TOTAL PROJECT COST 11
FINANCIAL PROSPECTS AND KEY PROJECT INDICATORS 13
CHAPTER 2. MARKET RESEARCH 14
VOLUME OF RUSSIAN PRODUCTION OF CULTIVATED MUSHROOMS 14
DYNAMICS OF PRODUCTION OF CULTIVATED MUSHROOMS IN GENERAL 14
PRODUCTION STRUCTURE BY MUSHROOM SPECIES 16
CHAMPIGNON PRODUCTION DYNAMICS 16
CHAMPIGNON PRODUCTION STRUCTURE BY REGION 17
OUR MUSHROOM PRODUCTION DYNAMICS 18
KEY INDUSTRY PROJECTS 19
GROWING CHAMPIGNONS 19
Growing oyster mushrooms 28
BIOGREEN 28
CASCADE 28
MASLYANINSKOE LUKOSHKO 29
AVK 29
AGRICO 30
ECO GOURMET 30
GRIBOEDOFF 30
THE RIGHT WAY 30
MUSHROOMS OF SIBERIA 31
WEEDERN 31
CDC "INVEST" 31
MUSHROOM FARM 31
IMPORT-EXPORT OPERATIONS ON THE MARKET OF FRESH CHAMPIGNONS 32
VOLUME OF IMPORT OF FRESH CHAMPIGNONS 32
AVERAGE COST OF IMPORTATION OF CHAMPIGNONS 34
SUPPLYING COUNTRIES OF FRESH CHAMPIGNONS 34
VOLUME OF EXPORT OF FRESH CHAMPIGNONS 36
IMPORT AND EXPORT OPERATIONS ON THE MARKET OF OTHER CULTIVATED MUSHROOMS (Oyster mushrooms, SHIITAKE, ERINGI, ENOKI, POLYA, etc.) 36
VOLUME OF IMPORT OF MUSHROOMS 36
AVERAGE COST OF IMPORTATION OF EXOTIC MUSHROOMS 37
SUPPLYING COUNTRIES OF MUSHROOMS 38
VOLUME OF EXPORT OF MUSHROOMS 39
TOTAL OFFER OF CULTIVATED MUSHROOMS ON THE MARKET 39
CHAMPIGNONS MARKET VOLUME 39
OUR MUSHROOM MARKET VOLUME 41
PRICE POLICY ON THE MARKET 42
CHAMPIGNONS 42
Oyster mushrooms 43
CONCEPT OF DEVELOPMENT OF RUSSIAN MUSHROOM FOR THE PERIOD 2015-2020. 44
MARKET CAPACITY 46
RECOMMENDED CHAMPIGNON PRODUCTION VOLUME BY SUBJECTS TAKING INTO ACCOUNT DEMAND 46
RECOMMENDED PRODUCTION VOLUME OF OYSTERS BY SUBJECTS TAKING INTO ACCOUNT DEMAND 48
PROSPECTS FOR THE DEVELOPMENT OF THE MARKET OF CULTIVATED MUSHROOMS IN THE RUSSIAN FEDERATION 50
FACTORS OF GROWTH IN DEMAND FOR CULTIVATED MUSHROOMS 50
NICHE FOR SMALL PRODUCTIONS 51
GROWTH IN DEMAND FOR OYSTERS AND OTHER EXOTIC MUSHROOMS 52
FURTHER IMPLEMENTATION OF IMPORT SUBSTITUTION POLICY 53
INCREASED INTERNAL COMPETITION BETWEEN MANUFACTURERS 54
WORLD MARKET OVERVIEW 54
CHAPTER 3. LEGAL ISSUES 57
ORGANIZATIONAL AND LEGAL FORM 57
OKVED CODES 60
REGISTRATION OF SP OR LLC 61
SANITATION DOCUMENTS 64
EXPERTISE OF THE ROOM BY ROSPOTREBNADZOR 64
STATE REGISTRATION OF PRODUCTS 65
DECLARATION OF CONFORMITY TR CU 66
CERTIFICATE ISO HACCP 67
OTHER SANITATION DOCUMENTS 67
APPROVAL OF DESIGN DOCUMENTATION AND OBTAINING CONSTRUCTION PERMISSION 68
REGISTRATION OF STATE SUPERVISION DOCUMENTS 70
BUDGET FOR PERMISSIONING DOCUMENTS 71
CHAPTER 4. PROJECT CONCEPT 73
ESSENCE OF THE PROJECT 73
PHYSICAL PARAMETERS OF THE OBJECT 74
PRODUCT DESCRIPTION 74
SIZES, MINERAL COMPOSITION AND VITAMINS 75
TERMS OF DELIVERY AND PACKAGING 77
PRODUCTION TECHNOLOGY 77
SALES MARKET AND PRODUCT RANGE 81
SALES MARKET 81
PRODUCT RANGE 82
PRICE POLICY 82
CHAPTER 5. MARKETING PLAN 83
MARKETING POLICY AND MARKETING OBJECTIVES OF THE PROJECT 83
ADVERTISING POLICY 83
MAIN CHANNELS AND METHODS OF ADVERTISING AND PROMOTION 84
MEDIA AND INTERNET 85
ADVERTISING AND SOUVENIR PRODUCTS 85
PROMOTIONS 85
ADVERTISING ACTIONS OF THE INVESTMENT STAGE 85
ADVERTISING ACTIVITIES OF THE OPERATIONAL STAGE 86
CHAPTER 6. INVESTMENT STAGE OF THE PROJECT 87
IMPLEMENTATION PLAN OF THE INVESTMENT STAGE 87
DESIGN 87
CONSTRUCTION WORKS AND INFRASTRUCTURE 88
PURCHASING OF EQUIPMENT AND TECHNOLOGY 89
EQUIPMENT AND GETTING TECHNOLOGY 89
CAR 89
INITIAL PURCHASE OF SUPPLIES 89
EXPENDITURE BUDGET FOR THE INVESTMENT STAGE 90
CHAPTER 7. PROJECT OPERATIONAL STAGE 92
MAIN COSTS IN THE OPERATING STAGE 92
UTILITY COSTS 92
ELECTRICITY 92
WATER SUPPLY 92
DYNAMICS OF UTILITY COSTS 93
Wages Fund 93
COST OF RAW MATERIALS AND SUPPLIES 94
COSTS FOR AUXILIARY MATERIALS (FILM, PACKAGES) 94
COSTS OF DISINFECTION MEANS 95
COSTS FOR fuels and lubricants 95
ADVERTISING COSTS 95
OTHER COMMERCIAL AND ADMINISTRATIVE EXPENSES 96
OPERATING BUDGET 97
OPERATING STAGE INCOME 99
OPERATING INCOME 99
CHAPTER 8. FINANCIAL PLAN 101
CONDITIONS AND ASSUMPTIONS 101
INFLATION 101
TAX ENVIRONMENT 102
PROFIT AND LOSS STATEMENT 105
CASH FLOW STATEMENT 108
FORECAST BALANCE 111
BUDGET TAX PAYMENTS 112
CHAPTER 9. ASSESSMENT OF PROJECT PERFORMANCE 113
OPERATING EXPENSES STRUCTURE 113
ANALYSIS OF ECONOMIC EFFICIENCY 113
PROJECT PROFITABILITY 113
NET PROFIT 114
DISCOUNTING RATE CALCULATION 114
NPV, PAYBACK PERIOD AND IRR OF THE PROJECT 116
PROJECT COST 117
BREAKTHROUGH POINT 118
KEY INVESTMENT AND FINANCIAL INDICATORS OF THE PROJECT 119
CHAPTER 10. RISK ANALYSIS 120
ORGANIZATIONAL RISKS 120
PERSONNEL RISKS 122
PRICE RISKS 122
TECHNOLOGICAL RISKS 123
FINANCIAL RISKS 124
ECONOMIC AND MARKET RISKS 126
FORCE CIRCUMSTANCES (FORCE MAJEURE) 127
CHAPTER 11. APPENDICES 129
STANDARDS FOR TECHNOLOGICAL DESIGN OF COMPLEXES FOR GROWING OYSTER MUSHROOM 129
TECHNOLOGY FOR GROWING OYSTERS 129
NOMENCLATURE OF ROOMS 135
CONSUMPTION RATE 137
TECHNICAL CONDITIONS (TU) FOR FRESH CULTURED OYSTER MUSHROOMS 139
LIST OF CHARTS
Schedule 1. Dynamics of the volume of production of cultivated mushrooms in the Russian Federation (thousand tons), 2011-2018 14
Graph 2. Comparison of expert estimates of the volume of Russian cultivated mushroom production (thousand tons), 2011-2018. 15
Schedule 3. Dynamics of the production volume of fresh champignons in the Russian Federation (thousand tons), 2011-2018 17
Schedule 4. Dynamics of the production volume of fresh oyster mushrooms in the Russian Federation (thousand tons), 2011-2018 19
Schedule 5. Dynamics of import volume of fresh champignons in physical terms (thousand tons), 2006-2018 33
Chart 6. Dynamics of the import value of 1 kg of fresh champignons, USD 34
Schedule 7. Dynamics of the import value of 1 kg of fresh champignons, rubles. 34
Schedule 8. Dynamics of imports of other cultivated mushrooms in physical terms, 2011-2018 37
Schedule 9. Dynamics of the import value of 1 kg of fresh exotic mushrooms (USD), 2011-2018 38
Schedule 10. Dynamics of the import value of 1 kg of fresh exotic mushrooms (rubles), 2011-2018 38
Schedule 11. Volume of the market for fresh champignons in the Russian Federation (thousand tons), 2011-2018 40
Schedule 12. Market size of fresh oyster mushrooms in the Russian Federation (thousand tons), 2011-2018 41
Schedule 13. Income, expenses and net profit for project 114
Schedule 14. Cumulative total project net profit 114
Chart 15. Cumulative Cash Flow and NPV 117
Chart 16. Sensitivity of NPV to changes in sales volume 118
Chart 17. Sensitivity of net profit to changes in sales volume 119
LIST OF DIAGRAMS
Diagram 1. Structure of cultivated mushroom production by species, in kind, 2011-2018 16
Diagram 2. Structure of champignon production by federal districts, 2018 18
Diagram 3. Structure of import deliveries of fresh champignons by countries of origin, in kind, 2011-2018 35
Diagram 4. Structure of import of fresh champignons by countries of origin in physical terms, 2012, 2018 35
Diagram 5. Structure of import supplies of exotic mushrooms by countries of origin, in kind, 2011-2018 39
Diagram 6. Dynamics of the level of import dependence of the champignon market, 2011-2018 40
Diagram 7. Dynamics of the level of import dependence of the oyster mushroom market, 2011-2018 42
Diagram 8. Structure of world production of champignons, 2016 55
Diagram 9. Structure of investment expenses 91
Diagram 10. Structure of operating expenses 113
LIST OF FIGURES
Figure 1. Map of location of mushroom production in the Russian Federation, early 2019 18
Figure 2. Technology of growing oyster mushrooms 78
Picture 3. Scheme of operation of a straw chopper 79
Figure 4. Schedule of investment stage 87
LIST OF TABLES
Table 1. Schedule of expenses of the investment stage (in thousand RUR) 12
Table 2. Main investment and financial indicators of the project 13
Table 3. The largest mushroom cultivation projects implemented in the Russian Federation, 2019 26
Table 4. The largest oyster mushroom cultivation projects implemented in the Russian Federation 31
Table 5. Dynamics of the volume of imports of fresh champignons in value terms (rubles and USD), 2006-2018 33
Table 6. The volume of export of fresh champignons from Russia in physical and value terms, 2012-2018 36
Table 7. Dynamics of the volume of imports of other cultivated mushrooms in value terms (rubles and USD), 2011-2018 37
Table 8. The volume of export of fresh champignons from Russia in physical and value terms, 2011-2017 39
Table 9. Retail prices for champignons in the Russian Federation, March 2019 42
Table 10. Retail prices for the sale of oyster mushrooms in the Russian Federation, March 2019 43
Table 11. Recommended production of mushrooms and compost for growing mushrooms by regions of the Russian Federation, 2018 46
Table 12. Recommended production volume of oyster mushrooms and compost for growing champignons by regions of the Russian Federation, 2018 48
Table 13. Vitamin content (mg / 100 g) in cultivated oyster mushrooms in comparison with some food products 53
Table 14. Volume of production of champignons in Europe, 2016 55
Table 15. Comparison of forms of ownership (individual entrepreneur and LLC) 59
Table 16. Budget for registration of permits 71
Table 17. Composition and area of industrial premises of the enterprise 74
Table 18. Comparison of the content of minerals in oyster mushroom with their content in other products, mg / 100 g 76
Table 19. Comparison of the content of vitamins in oyster mushroom with their content in other products, mg / 100 g 77
Table 20. Structure of sales of products of the complex 82
Table 21. The cost of developing design documentation for construction 87
Table 22. Construction and installation works and infrastructure creation 88
Table 23. Production equipment and special machinery 89
Table 24. Budget of expenses of the investment stage, thousand rubles. (with VAT) 90
Table 25. Water consumption by directions of use on a mushroom farm 93
Table 26. Utilities by year (excluding VAT), thousand rubles. 93
Table 27. Staffing table 94
Table 28. Forecasted annual inflation of payroll costs 94
Table 29. Costs of raw materials and materials for the production of 1 kg of oyster mushrooms 94
Table 30. Parameters for determining the consumption of disinfectants 95
Table 31. Parameters for determining the consumption of gasoline for the delivery of products 95
Table 32. Directions of the marketing budget 96
Table 33. Selling and administrative expenses, thousand rubles / month. 97
Table 34. Forecasted annual inflation on operating expenses 97
Table 35. Operating budget of expenses (excluding VAT), thousand rubles. 98
Table 36. Structure of sales of products of the complex 99
Table 37. Forecasted annual inflation on operating income 99
Table 38. Operating budget of income by years, thousand rubles. one hundred
Table 39. Rates of inflation 101
Table 40. Rates of the main taxes for the unified agricultural tax 103
Table 41. Rates of contributions to state extra-budgetary funds 103
Table 42. Forecast of changes in the marginal wages used to calculate the amount of insurance payments for the period 2019-2023, thousand rubles. 104
Table 43. The size of fixed payments of individual entrepreneurs for themselves in the Pension Fund and the MHIF in 2018-2020, rubles 104
Table 44. The maximum amount of insurance premiums paid by individual entrepreneurs for themselves in 2018-2020, rubles. 105
Table 45. Profit and loss statement (in thousand RUR) 105
Table 46. Cash flow statement (in thousand RUR) 108
Table 47. Balance sheet, thousand RUR (at the end of the year) 111
Table 48. Budget of tax payments (in thousand rubles) 112
Table 49. Profitability indicators 113
Table 50. Initial data for calculating the cost of equity 115
Table 51. Calculation of WACC 115
Table 52. Calculation of NPV 116
Table 53. Calculation of NPV + TV 117
Chart 16. Sensitivity of NPV to changes in sales volume 118
Chart 17. Sensitivity of net profit to changes in sales volume 119
Table 54. Main investment and financial indicators of the project 119
Table 55. Change in key indicators with an increase in the investment stage by 1 month 120
Table 56. Change in key indicators with a decrease in the cost of services by 1% 123
Table 57. Change in key indicators when the investment budget is exceeded by 1% 124
Table 58. Change in key indicators with a decrease in the planned sales volume 126
Today, the market for cultivated mushrooms has developed an extremely favorable environment for investment in the industry. Non-core investors interested in diversifying their core business are showing particular interest in the mushroom business.
Inventica highlights the following key industry benefits for the future investor:
The market demonstrates a colossal growth rate
The main driver for the development of domestic production was the food embargo introduced in 2014 in response to economic sanctions from the West. In particular, the ban included mushrooms from Poland, which previously accounted for over 90% of the total import of cultivated mushrooms in the Russian Federation, which, in turn, formed almost 85% of the supply of the Russian champignon and oyster mushroom market.
With the introduction of a ban on supplies, Russian companies have an opportunity to rapidly increase the production of products that are in stable demand in the market. In 2017-2018 the annual increase in the volume of production of cultivated mushrooms in Russia exceeded 50%.
State support gives additional acceleration to the market
In 2017, the Ministry of Agriculture of the Russian Federation proposed to support mushroom production by including it in the State Program for the Development of Agriculture for 2013-2020. Mushroom projects can now count on reimbursement from the state budget of 20% of capital costs (for the Far East - 25%).
The market has a rather low base in terms of the volume of mushroom consumption per person.
So, at the end of 2018, the consumption of champignons amounted to only 0.44 kg per person, which is significantly less than in developed countries (from 2 to 5 kg per person per year). The volume of consumption of exotic mushrooms (oyster mushrooms, shiitake, eringi, etc.) in Russia is insignificant, while all over the world these mushrooms show an increase in consumption, confidently displacing traditional champignons from the market.
If we focus on the world level of per capita consumption, then the optimal consumption for Russia is the consumption of at least 300 thousand tons of products per year, which is almost 4 times less than the current production base of the market.
