Project Feasibility Study and Evaluation-Hedphan Farm. Aj Chaiyawat Thongintr

1

HedPhan Farm

Project Feasibility Study and Evaluation

Mea Fah Luang University

2

11220033330022 PPRROOJJEECCTT FFEEAASSIIBBIILLIITTYY SSTTUUDDYY

AANNDD EEVVAALLUUAATTIIOONN

HHEEDDPPHHAANN FFAARRMM

BBYY

TTHHAANNAATTCCHHAA KKHHAAMMCCHHAANN 55003311220033118855

BBUUSSIINNEESSSS AADDMMIINNIISSTTRRAATTIIOONN

SSCCHHOOOOLL OOFF MMAANNAAGGEEMMEENNTT

MMEEAA FFAAHH LLUUAANNGG UUNNIIVVEERRSSIITTYY

TTHHIIRRDD SSEEMMEESSTTEERR,, AACCAADDEEMMIICC YYEEAARR 22000099

3

Table of Content

Table of Content………………………………………………………………………….A

List of Figures List of Tables.............................................................................................C

Chapter 1: Introduction……………………………………………………………….…D

1.1 Background and Significance of the Project………………….………….……2

1.2 Project Objectives…………………………………………….………….……3

1.3 Benefits of Project…………………………………………....………………..3

1.4 Study Methods……………………………………….……………………......4

1.5 Time Frame of study…………………………………………………………....4

Chapter 2: Industry Profile…………………………………………………………….…5

2.1 Nature of Industry………………………………………………………….…...6

2.2 Situation of Industry……………………………………………………….…...9

2.3 Product & Service……………………………………………………………..12

2.4 Vision………………………………………………………………………….13

2.5 Mission………………………………………………………………………...13

2.6 Strategy………………………………………………………………………..13

2.6.1 Corporate Level…………………………………………………….13

2.6.2 Business Level ……………………………………………………..14

2.6.3 Function Level……………………………………………………...14

Chapter 3: Market Feasibility Study …………………………………………………..17

3.1 Market Analysis………………………………………………………………18

3.1.1 General Environment Analysis……………………………………..18

3.1.2 Competitive Analysis……………………………………………….21

- Company Analysis

- Customer Analysis

- Competitor Analysis

3.1.3 Market Size and Market Volume……………………………………26

3.3 Marketing Mix Strategy………………………………………………………31

3.3.1 Products & Services………………………………………………...32

3.3.2 Place ………………………………………………………………..32

3.3.3 Price………………………………………………………………...32

3.3.4 Promotion …………………………………………………………..33

3.4 Sales Forecast ………………………………………………………………...33

3.5 Marketing Expenses ………………………………………………………….41

3.6 Conclusion……………………………………………………………………45

Chapter 4: Technical Feasibility Study ………………………………………………..46

4.1 Production and Operation Analysis…………………………………………...47

4.1.1 Product Characteristics ……………………………………………..47

4.1.2 Product Process ………………………………………………….....48

- Capacity of machine and labor

- Quality control

A

4

- Source of raw material

4.1.3 Location……………………………………………………………..59

4.1.4 Store Layout ……………………………………………………......59

4.1.5 Machine, Tool and Equipments …………………………………….63

4.1.6 Logistics Management ……………………………………………...66

4.1.8.1 Inventory Management…………………………………..66

4.1.8.2 Transportation Management……………………………..74

4.1.7 Organization Management ………………………………………….76

4.1.7.1 Project construction ………………………………………76

4.1.7.2 Project scheduling…………………………………………77

4.1.7.3 Operating period…………………………………………..77

4.2 Cost of Investment ………………………………………………….………..80

4.3 Investment Cost …………………………………………………..………….81

4.4 Operating Cost…………………………………………………….………….87

4.4.1 Direct material Cost…………………………………….…………..87

4.4.2 Direct Labor……………………………………….………………..89

4.1.3 Overhead………………………………………….…….…………..50

4.5 Organization expense (Cost)…………………………….……..…….……..93

4.4.1 Salary……………………………………………………………….93

4.4.2 Bonus ………………………………………………………………93

4.4.3 Office supplies ……………………………………………………..93

4.4.4 Electricity …………………………………………………………..93

4.4.5 Water Supply ………………………………………………………94

4.4.6 Telephone…………………………………………………………..95

4.4.7 Telephone…………………………………………………………..95

4.4.8 Car Insurance……………………………………………………….96

4.4.9 Drinking Water ……………………………………………………..96

4.4.10 Borrowing …………………………………………………….......96

4.6 Conclusion ………………………………………………………...…………99

Chapter 5: Financial Analysis …………………………………………..……………..100

5.1 Income Statement …………………………………………….…...………..101

5.2 Cash Flow …………………………………………………………………..104

5.3 Balance Sheet ………………………………………………………………107

5.4 Conclusion ………………………………………………………….………110

Chapter 7: Summary ………………………………………………………….……….111

Reference………………………………………………………………………..………114

B

5

List of Figures

Figure: 2.1 straw mushroom house ………………………………………………………..6

Figure: 2.2 culture straw mushroom cultivation…………………………………………..7

Figure 2.3 life cycle of mushroom to spawn………………………………………………10

Figure 2.4 spawning of Straw Mushroom Pasteurized……………………………..……..12

Figure 3.1 straw mushroom cultivation ………………………………………………….25

Figure 3.2 mushroom houses ……………………………………………………………..25

Figure 3.3 Logo of HedPhan farm………………………………………………………...31

Figure 3.4 MFD of spawn mushroom bag label ………………………………………….32

Figure 3.5 Graph of Three Year - Sale forecast of year 1 ……………………………..…38

Figure 3.6 Graph of Three Year – Sale forecast of year 2 ………………………………..39

Figure 3.7 Graph of Three Years – Sale forecast of year 3 ………………………………40

Figure 3.8 total three year sale forecast ………………………………………………….45

Figure 4.1 spawn of straw mushroom bag ……………………………………………….47

Figure 4.2 production process charts ……………………………………………………..42

Figure 4.3 soaking of spawn substantial …………………………………………………49

Figure 4.4 Filled soaking of span substantial ……………………………………………..50

Figure 4.5 Pressure cooking 120℃ ……………………………………………………….51

Figure 4.6: Steps in spawning procedure …………………………………………………52

Figure 4.7 :Storage until colonies after 3-4 week ………………………………………...52

Figure 4.8: HedPhan location …………………………………………………………….59

Figure 4.9 HedPhan farm layout ………………………………………………………….60

Figure 4.10 HedPhan farm (in front) ……………………………………………………..60

Figure 4.11 HedPhan farm layout (back) ………………………………………………..60

Figure 4.12 Organization structure ………………………………………………………77

C

6

List of table

Table 2.1: calendar of mushroom cultivation……………………………………………. 8

Table 3.1: market size of spawn mushroom bag ………………………………………...29

Table 3.2: market volume expectation …………………………………………………..30

Table 3.3: market volume expectation of direct customer and indirect customer ……..30

Table 3.4: demand forecast of year 1 as 10% of market share……………………… ..35

Table 3.5: Demand forecast of year 2 as 15% of market share ………………………..36

Table 3.6: Demand forecast of year 3 as 20% of market share ………………………..36

Table 3.7: total demand of three year …………………………………………………….37

Table 3.8: Three Year - sale forecast of year 1 ……………………………………..…….38

Table 3.9: Three Year - Sale forecast of year 2 ………………………………………….39

Table 3.10: Three Year - Sale forecast of year 3……………………………….………... 40

Table 3.12: mixed marketing activities ………………………………….……………….41

Table 3.13: Three Years- Market Express of year 1 ……………………………………...43

Table 3.14: Three Years- Market Express of year 2 …………………...…………………43

Table 3.15: Three Years- Market Express of year 3 ……………………………………...44

Table 4.1: Preparation of spawn substantial ……………………………………………..48

Table 4.2: Activities of production spawn substantial ……………………………………49

Table 4.3: The Example of Production time of spawn of straw mushroom ………...........55

Table 4.4: Material usage in unit of Year 1 ………………………………………..…….68

Table 4.5: Purchase policy by POQ in Year 1 of 3 month purchase policy……...…… 69

Table 4.6: Material usage in Year 2 ………………………………………………..……70

Table 4.7: Purchase policy by POQ in Year 2 of 3 month purchase policy……..…… 71

Table 4.8: Material usage in Year 3 ………………………………………………………72

Table 4.9: Purchase policy by POQ in Year 3 of 3 month purchase policy ……...……72

Table 4.10: deprecation of year 1 ………………………………………………………..84

Table 4.11: deprecation of year 2 ……………………………………………………….85

Table 4.12: deprecation of year 3 ……………………………………………………….86

Table 4.13: cost per bag …………………………………………………………………88

Table 4.14: cost of operating Year 1 ……………………………………………………90

Table 4.15: cost of operating Year 2 ……………………………………………………..91

Table 4.16: cost of operating Year 3 …………………………………………………….92

D

7

Table 4.17: Organization Expense year 1……………………………………………….. 97

Table 4.18: Organization Expense year 2 ……………………………………………….97

Table 4.19: Organization Expense year 3…………………………………………..……98

E

1

Chapter 1: Introduction

1.1 Background and Significance of the Project

1.2 Project Objectives

1.3 Benefits of Project

1.4 Study Methods

1.5 Time Frame of study

2

Chapter 1: Introduction

1.1 Background and Significance of the Project

Straw mushroom is a high temperature mushroom and the most popularly grown in

Thailand because Thailand has ideal environmental conditions for straw mushroom

cultivation (30-38 C) and a long history of mushroom growing since 1940s by farmer.

Thai people know that straw mushroom growing required low cost materials and

technologies while offering a high and quick return on their money, unlike other

mushrooms. In addition, straw mushroom cultivation can use available materials readily to

grow.

Most of the farmers involved with mushroom cultivation recycle agricultural wastes to

cultivate mushrooms. Some 70% of rice farming area (hectares) cultivates straw

mushroom by utilizing straw or hay that they already have. They don’t need to buy basal

substrate material. And 30% of rice farmers cultivate they burn hay or other reason.

(Postharvest Technology Innovation Center, CMU).

At moment, some straw mushroom cultivation brings them more money than rice

which straw mushroom cultivation takes just 7-15 days to bring money to them. And

earning return around 50-60% profit that is enough for farmers to continue growing.

All region of Thailand can grow straw mushroom which almost at North and

Northeast region. Especially in Chiang Rai, there are 45.45 percent of farmers almost

grow straw mushroom after rice harvested season because they already have their hay

(material to grow straw mushroom) and the return money is also high. According

Department of Chiang Rai Rice Research Center, 2009 reordered that Chiang Rai has

110,628 farmers in year 2009 and having 1.3 -1.4 million hectares per year.

Moreover, the farmer can’t produce their own spawn of straw mushroom. They need

to buy from supplier or some middleman or wholesaler who distribute in area. From

survey, 14-16 April 2010, there is one supplier of spawn of straw mushroom in Chiang Rai

and almost grower buy from supplier Lumpang, Payao province.

3

Traditionally, rice grower also grows straw mushroom in their rice fields after

harvest during December – April which they grow since history. Additional, nowadays,

mushroom cultivation for trade they usually grow by built a mushroom house to control

mushroom production (temperature and humidity) to product throughout the year. After

harvest rice they will collect hay for use one year and store in their house. At moment,

Chiang Rai mushroom grower group together to be SMEC, have 15 community enterprises

for trade (Department of Chiang Rai plant research, 2009).

Moreover, straw mushroom grower wants the high quality of a spawn mushroom

for high return productivity and also suitable price. Therefore, our business would like to

be the supplier of spawn mushroom in Chiang Rai for respond toward straw mushroom

growers and also can possible to return investment within 3 year.

1.2 Project Objectives

To study and learn the technical and management of the spawn mushroom

business.

To analyze the possible market both Straw Mushroom and spawn mushroom

business in Chiang Rai.

To analyze the feasibility of capital budgeting and evolution the business area of

spawn mushroom business.

To calculate the financial factor of spawn mushroom business and possible return

investment within 3 year.

1.3 Benefits of Project

To understand about the situation of spawn mushroom business.

To understand process and technical factor of spawn mushroom business.

To identify the possible market of spawn mushroom business.

To understand and can evaluate about financial feasibility.

1.4 Study Method

4

1. Look for information of mushroom market in Chiang Rai

2. Study general business Industry

- Mushroom cultivation

3. Spawn mushroom business

4. Conduct market survey

- Define the target market

- Analysis the questionnaire information

5. Analysis market

- Customer

- Competition

6. Define technical and process of business

7. Analysis and evaluation Finance information

8. Type and proofread the final report

9. Final Submit

1.5 Time Frame of study

Table1 Time Frame of study, during 29 March – 12 May 2010.

Study methods

March April May

Week

1 2 3 4 1 2 3 4 1 2 3 4

1. Look for information of spawn

mushroom business

2. Topic submit

3. Study general business

Industry

4. Analysis market

5. Study technical and process of

business

6. Analysis Finance factor

7. Type and proofread the final

report

8. Final Submit

5

5

Chapter 2: Industry Profile

2.1 Nature of Industry

2.2 Situation of Industry

2.3 Product & Service

2.4 Vision

2.5 Mission

2.6 Strategy

6

Chapter 2: Industry Profile

2.1 Nature of Industry

Straw mushroom cultivation is a one of the more popular occupation long time

especially in the central, northeast and north region. In the other hand is farming area.

Because of hay from rice is the best crop material for straw mushroom cultivation. Even

other readily material can available for growing but they are not popular way.

Because of straw mushroom is low-cost activity and high margin return if they

have experience. They are many farmer grow mushroom because they have their hay. And

also Thailand can produce straw mushroom more 600,000 ton per year, and also is the

biggest producer in the world. (The Thailand Research Fund Regional Office 2010)

A method of cultivation straw mushroom in Thailand usually cultivates 2 methods.

First method is called a mushroom house/farm which is modified from a culture

mushroom cultivation in term of control a temperature and humidity. Then producer can

plant all the year. (See figure 2.1)

Figure 2.1 straw mushroom farm/house

Generally, producer usually conducts a mushroom house size 4.00x10.00x2.50

mates and contain 2 shelves which also made by paddy rice too. For this method will

spend 25-28 days of growing period to harvesting until 2 month mushroom produce will

be eliminate.

Growers also order a spawning mushroom bag from the wholesaler distribute in

local area. And this method usually cultivate to trade or as a main occultation which can

6

7

generate high return and low investment. Because there are many cropping material instant

of rice paddy and can generate productivity such as water hyacinth, banana leaves or

Cassava peeling.

A culture mushroom cultivation is traditional mushroom a long time by farmer.

Because they have their own paddy and no need to buy, soak in water, drained, and then

packed (layered) in the wooden frames. then placing spawn mushroom inside with each

layer as the frame is packed or filled until full the wooden frames. After that covering with

plastic sheets and placed under shade outdoors, it can harvest after 7-10 days (see figure

2.2). This method almost plant by farmer after rice harvesting season (December – April)

as a second occupation.

Figure 2.2: a culture straw mushroom cultivation

Department of Agriculture has studied and found that one cake should use 10 kilos

of hay and ½ spawn mushroom to get 1.5-2 kilos/cake. Normally, grower will buy a spawn

mushroom from wholesalers who distribute in local areas and some of them is bought

mushroom back by them. They can sell at approximated 40-50 bath/kilo (Department of

Chiang Rai plant research, 2009).

Depend on a second occupation; a culture of straw mushroom cultivation from

farmer will not occur in a farming period (May-November)

7

8

Table 2.1 calendar of mushroom cultivation

product Harvest

days

Current year Next year

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

Rice 150

Referring : Rice Research Center, Chiang Rai 2010

Rice growing

Rice harvesting A culture straw mushroom cultivation Straw mushroom house cultivation

Tendency of mushroom cultivation in Chiang Rai

Mushrooms can grow well in temperatures 35-40 degrees, and Thailand is

agricultural country which can plant straw mushroom throughout the years, and

they turned to planting many throughout the country.

A mushroom cultivation, low cost-activity, low risk, harvest fast (7-15 days).

- A mushroom house cost is 6,000-10,000 bath, mushroom producing at

150-250 kg/house/month and sell at 40-50 bath, on average, earns

7,000 baht/ house/month (Chiang Mai new, 2009).

- A cultural mushroom cost is 300-500 baht of 50 cakes, mushroom

produce 1 kg/cake, sell at 40-50 bath on average, earns 4,500-6,000

baht/ month (Chiang Mai new, 2009).

There are the middleman sell a straw mushroom and purchase their product back

in front of farm at 40-50 baht per kilogram which the profit will be reduced when

In year dealing with an intermediate but if a good agreement can be made, it also

saves on expenses related to marketing.

Chiang Rai has a vest of hay form rice cultivation. Farming area of farmers in

Chiang Rai is all around 1.3 -1.4 million hectares per year in the area that is

growing still scattered around the area. (Rice Research Center, 2010).

According the research of Department of Agricultural Extension that “one hectare

of rice plating areas, having hay 3,000 kg, 10 kg of hay (cake), produce 1 kg of

mushroom.

8

9

There are developed various methods of mushroom cultivation methods. Farmers

can choose to mushroom cultivation as appropriate and necessary. Or habits of

each location of capital and material culture that is proper. For example, a

research and development of mushroom cultivation of Theng district by

Department of Agricultural Extension, Chiang Rai.

Market needs mushroom so much which the Thailand demand is about 8,000 tons

per year or 98 percent of the whole country. (Department of Agricultural

Extension, Chiang Rai).

There are government agencies, universities and schools, and several private of

provinces such as Kanchanapisek University a district, Agricultural Promotion

Center, Chiang Rai, community enterprising Chiang Rai support and training in

agricultural turned mushroom growing seasons after harvest instead of burning

straw increased.

At moment, they set up community enterprise of straw mushroom agricultural in

Chiang Rai 15 community and around 3,570 straw mushroom house cultivation

for long-term using.

2.2 Situation of Industry

Spawn is very important for the mushroom grower because they wise a good

quality spawn of the desired mushroom species to contrite on the mushroom growing

process and can be obtained at reasonable price.

History of spawning of straw mushroom culture in Thailand

Spawning of straw mushroom (Pure Culture) in Thailand is discovered by Dr Khan

Chanvijan who is the researcher of Bureau of Science and Technology Information in 1937

by mixture of shells lotus and rodeo.

In year 1970, Thailand Institute of Scientific and Technological Research (TISTR)

can produce a pure spawning of straw mushroom by a mixture of waste oil from cotton

seeds out and rodeo successful. Then bring a pure spawning mushroom to grow in a

9

10

cropping material (Hay). Follow by the research of Dr Khan Chanvijan that straw

mushroom can divide spawn production into 3 process.

1. Producing a pure culture or mother spawn (There are 2 methods)

a. a mixed of cotton seeds or lotus wasted and rodeo.

b. a fresh and healthy fruiting body of certain fungi.

2. Producing Spawning mushroom

To increase a quantity of productivity for grow with a cropping material

such as peel lotus seed rice straw, cotton, dried water hyacinth leaves and rodeo.

The best cropping material is a mixed of rode and peel lotus or paddy.

3. Mushroom Cultivation (There are 2 methods)

a. A culture mushroom cultivation

b. A mushroom house/farm

Figure 2.3 life cycle of mushroom to spawn

Spawn mushroom producer in Thailand

Thailand is the biggest straw mushroom grower in the world which can produced at

least 500,000 tons per year. Then it needs to use spawn mushroom average at least 320-

350 million tube bag. Therefore spawn of straw mushroom entrepreneur earn revenue of

10

11

selling its more than 20 million per year. (Thailand’s one shop center of mushroom news,

December 2009)

However, mushroom grower wants a good quality spawn mushroom. The producer

who want to trade spawn mushroom should understand that spawn mushroom has high

variance both temperature and humidity and can’t keep in a refrigerator. Even spawn

mushroom still relive but it will less or non productivity. a good quality spawn mushroom

should relive during 1-7 days only (Thailand’s one shop center of mushroom news, March

2010).

To produce a spawn mushroom need to start with a mother spawn mushroom

production to find the best spawn which the this process is complex and very carefully;

concerning with high investment too, as be mention before. However, at moment many

spawn mushroom entrepreneur doing business by shout cut way that is buy a mother

spawn mushroom to produce a spawn mushroom again and recheck by them.

At moment, new spawn of straw mushroom can by a mother spawn mushroom of

any educative organization or agricultural agency such as KasendSart University or Bio-

technology organization.

Therefore the characteristic of the spawn mushroom entrepreneurs have to

industrious and trusting because they have to check a productivity process and quality of

mushroom. Even produce a mother spawn mushroom or spawn mushroom.

11

12

2.3 Product & Service

A spawning of Straw Mushroom Pasteurized

Container plastics bag size 6 ½ x 12 ½ niches, weigh 500 garme.

Figure 2.4 A spawning of Straw Mushroom Pasteurized

A mother spawning of Straw Mushroom

Container glass bottle contained 300 ml

Figure 2.5 A spawning of Straw Mushroom Pasteurized

12

13

2.4 Vision

To become a biggest of spawn of straw Mushroom and provide a good quality

spawn in Chiang Rai province.

2.5 Mission

HedPhan Farm’s mission is produce and sell a good spawn of Straw Mushroom

pasteurized at a reasonable price which to concentrate on the mushroom growing process

for mushroom grower. We believe with our process and specialist employee and also

technology using that made the customer trust with our product; providing product that are

more productivity and best quality for gain the high market share.

2.6 Strategy

Strategy refers to a plan of action designed to achieve a particular goal of HedPhan

Farm which we can follow;

2.6.1 Corporate Level

“HedPhan farm is a new business that plan to conduct next year located in Chiang

Rai province. To develop and growth our film and can reach the vision. For corporation

level, we concern for applying strategic management by pursue a combination of these

strategic.

- Seeking ownership and increase control of a firm’s suppliers by produce a

mother mushroom by ourselves instant of buy from suppliers which this

strategy need to spend a few year to find a best technical or experiment a good

spawn mushroom.

- Conducting a laboratory to experiment or produce a mother spawn mushroom

to fright increase a quality product than other competitor.

- Force our product to sell outside province.

- Entering a shop to trade equipment of mushroom cultivation.

13

14

2.6.2 Business Level

For business level, we focus in one strategy that is FOCUS STRATEGY under

concentrate our resources by entering in a narrow market or pull market. And there is

product to competitively satisfy its needs. Therefore we focus on conformance quality and

productivity of spawn of straw mushroom only. Even other competitor often sell verity

kind of spawn mushroom. This strategy we wish to create customer loyalty and add a

various outstanding value over the competitor. We believe that the mushroom grower

desires a good quality spawn, increase productivity process and reasonable price. We focus

on these strategies.

- Experiment and checking before sell to customer.

- Produce straw mushroom by concerning a good quality and productivity

- Producing Straw mushroom every week because it can relive within 7 days and

also putting a date producing and

- Create brand and logo under name “HedPhan Farm” to desirable firm image.

- Using technological innovation to develop a straw quality.

Mean for achieving strategy

- Outsourcing a scientist or specialist to check a quality produce.

- Joint with a support activity that offer or provide to mushroom grower that is

set up by government , education, researcher or information news such as

spending our place to experiment, selling low price when using with

government project.

2.6.3 Function Level

Functional level strategy including of marketing management, human resource

management, logistic management and inventory management. These strategies are

achieved and support process in business level.

14

15

Marketing management

Marketing functional is a responsibility to perform marketing effort which

attract to customer by verity communication. As our company provide a good

quality product and reasonable price to customer then to serve what our company

having and provide. Then we need to published and eliminate a completely existing

competitors and a barrier of new entre competitors.

Fist marketing, our company uses local radio also to promote us (Radio Chiang Rai

92.75MHz). Reason that mushroom grower is a farmer and agriculturist, generally,

agriculturists usually listen radio during working. And also the target group of

radio is a local people, therefore, there are a large chance to attract them to know

us.

Second marketing, our company will advertising on a local news paper and any

website of Chiang Rai because it is low cost. When they want to find mushroom

information. The easy way by search from internet and find on news paper

especially agricultural news paper.

Third marketing, we proud to create logo and branding in attract customer

to remember us and crate film image under name “HedPhan Farm”

Fourth marketing, we will use and joint with other organization to do

training course offer to a mushroom grower or other people in Chiang Rai because

if they know how to plant and would like plant , so they need to buy spawn

mushroom.

Human resource management

Human resource functional is concerned about employment process. The

best employee will make company gain more profit. For hiring the best

employees, we need to require a job qualification and application. After we

accept them we have to training them before work too because to produce a

spawn mushroom should be careful and trust and so on to warrant our product.

Moreover, we always evaluate worker every month to recheck their performance.

15

16

We concern that the first impression is very important for marketing selling and to

increase productivity our company will govern under “good relationship”.

Logistic management

Logistic management is a responsibility for customer service both

transport and inventory management. We emphasize about forecasting demand

because a spawn mushroom can relive with 7 days. The importing to increase

inventory turnover is forecasting demand. And also some raw material is rare to

find such as rode, then we have to carefully about supplier too.

Manufacturing Management

This strategy is very important to support business strategy that is focus

strategy on a good quality product and its can generate more mushroom. Then we

need to check a quality of spawn mushroom every 3 month, especially rice

harvest period.

Finance Management

- Using financial software and computer to support finance part.

- Setting a reasonable price (10 bath per tube bag).

- Preparing financial statements to systematic, clear, and accurate in every month.

Checking finance account every month and using this one to forecast demand.

16

17

Chapter 3: Market Feasibility Study

3.1 Market Analysis

3.1.1 General Environment Analysis

Social

Political

Economic

Technology

3.1.2 Competitive Analysis

Company Analysis

Customer Analysis

Competitor Analysis

3.1.3 Market Size, share, trend

3.2 Marketing Mix Strategy

3.2.1 Products & Services

3.2.2 Place

3.2.3 Price

3.2.4 Promotion

3.3 Market Share, Market Size, Market Volume

3.4 Sales Forecast

3.5 Marketing Expenses

17

18

Chapter 3: Market Feasibility Study

3.1 Market Analysis

A marketing analysis is invested of a market that is used to inform a firm's

planning activities particularly around decision of: inventory, purchase, work force,

expansion/contraction, facility expansion, and purchases of capital equipment, promotional

activities, and many other aspects of a company. It also is the tools most used for making

sales forecasts and analyzing markets.

3.1.1 General Environment Analysis

Political Factors

Supporting services from government help to promote mushrooms as a

source of livelihood and have the potential to improve condition and knowledge for

mushroom growers then mushroom grower will increasing or increasing more producing.

The supporting for mushroom cultivation from government sector from community can

include,

Setting up community to allocate capital and creative a self-reliant

such as the Small and Micro Community Enterprise (SMCE) At moment,

Chiang Rai has 15 SMCE of straw mushroom cultivation.

(http://smce.doae.go.th/).

Supporting knowledge skill to provide knowledge of mushroom

cultivation such as Chiang Rai Information Centre under website:

(http://www.chiangrai.go.th/service).

Providing training train to farmer such as a mushroom production

course (1 day) by Center of promotion and development of agriculture, Chiang

Rai.

18

19

Support new knowledge and technical under taking project research

such as project of new method of mushroom cultivation by Department of

Agricultural Extension

Supporting public policy indirect such as the project of management

of rice by Ministry of Agriculture and Cooperatives.

However some support from activities or information also makes

company lost opportunity such as provide information about a spawn

mushroom production.

Economical Factors

Economic factor affect the cost of production and customer demand. For affecting

the cost of production, it made the price fuel price or fertilizer changing which mushroom

production have to produce every week to serve customer. If the price of fuel increase, cost

of transportation will increase.

According to Department of Agricultural News, May 2010, previous year’s

product price is the motivation for agriculturists to increase the production or change

to other products such as rubber tree or corn. If the price of rice increases they will turn to

grow rice 10% and invest decrease if price of rice is decrees.

Moreover Thailand have to concern about climate change and policy of

government then Chiang Rai is considered an area with optimal climate for cultivation,

with sufficient rain and good soil; it can increase the agricultural production. However,

this depends on the climate for each year.

Technological Factors

The mushroom production wants technology to check and control production such

as temperature and humidity which help to increase customers stratify in product.

Manufacturing equipment reduces labor, or production of mushroom infection. It

helps increase productivity even more. For example, Now University of KhonKan created

19

20

2 in 1 machine of mushroom soaking and compacting at the same time to reduces the time

in the grinding and stuffing.

Social and Environmental Factors

Environmental

Temperature and humidity is significant of mushroom growing. The landscape

industry as a significant contributor to growth. The temperature range of growing straw

mushroom is 38-40 degrees Celsius for optimal germination of mushroom spores. Good

fiber growth at 32-38 degrees Celsius and the flowers of mushroom are at 30 degrees

Celsius. Notice that on summer straw mushroom can harvest after 7-10 day and around 15

days, on rainy season can harvest after 8-12 days and around 15 days and the winter can

harvest after 15-18 days or more around 15 days (Technical of growing mushroom: book).

If they spend more time to harvest, a using of spawn mushroom will decrease. Moreover,

temperature and humidity, also significant for spawn mushroom production such as

growing of fungi.

The suitable temperature of growing mushroom is between 28-32 degrees Celsius.

If temperature is too low, production of mushroom will be slow, and in contrast if

temperature is too high, production of mushroom will fast. According a cultural mushroom

cultivation, the will start to grow mushroom in December month and gather (increase) in

January and February until March they will rather (decrease) to April just a few grower

(Technical of growing mushroom: book).

Social Factor

A Social factor affects a number of mushroom growing on each season. Generally,

farmer usually plant a straw mushroom after rice harvest called a culture mushroom

cultivation as a second occupation. The growing period is December-April (Department

of Chiang Rai plant research, 2009). Demand of spawn mushroom is increase too and large

volume which many commercial person can profit in this period such as wholesaler who

distribute spawn mushroom, a middleman who buy mushroom at farm, and trend at final

market.

20

21

3.1.2 Competitive Analysis

Company Analysis

Spawn is very important for the mushroom grower because they wise a good

quality spawn of the desired mushroom species to contrite on the mushroom growing

process and can be obtained at reasonable price.

The availability of good quality spawn is the limiting factor for mushroom

cultivation in Thailand such as high shipping costs and the difficulty to keep the spawn

cooled during transport. If good quality spawn of the desired mushroom species can be

obtained at a reasonable price, it would be wiser to concentrate on the mushroom growing

process. If not, spawn will have to be produced or multiplied by the mushroom grower.

Moreover, mushroom grower wants a good quality spawn mushroom. To produce

spawn of straw mushroom for commercial, the producer should understand that spawn

mushroom has high variance both temperature and humidity and can’t keep in a

refrigerator. Even spawn mushroom still relive but it will less or non productivity which

make customer unsatisfied.

Quality is very important for a new commercial business. Therefore the

characteristic of the spawn mushroom entrepreneurs have to industrious and trusting

because they have to check a productivity process and quality of mushroom. Even produce

a mother spawn mushroom or spawn mushroom.

To produce a spawn mushroom can start with a mother spawn mushroom

production to find the best spawn which the this process is complex and very carefully;

concerning with high investment too, as be mention before. However, at moment many

spawn mushroom entrepreneur doing business by shout cut way that is buy a mother

spawn mushroom to produce a spawn mushroom again and recheck by them.

In addition, good inventory management is important for commercial business.

Because spawn mushroom can relive at least 7 days even spawn still produce mushroom

but spawn can use in a composted substrate.

21

22

So, at the first start business, we will not product a mother spawns because a

mother spawning production is high investment and complicate which have to product

under only a laboratory with specialist for a good quality. Then we start HedPhan Farm

Business provide and sell a spawning of straw mushroom pasteurized by container

plastics bag size 6 ½ x 12 ½ niches sell at 10-15 baht per tube bag. Our business use the

shortcut that buy a mother spawning converting to a spawning of straw mushroom

pasteurized.

Competitor Analysis

The competitor analysis is analyzing the film that product the spawn of straw

mushroom with HedPhan Farm both in Chiang Rai and nearly Chiang Rai. From interview

the straw mushroom grower and survey that we divide our competitors into direct and

indirect one. Each competitor serves the same product but different service, promotion

price.

Direct competitor is providing business in Chiang Rai. There is only one business

under trade by Mrs. Raweewan ChaiJumpa. Her business located in Moo 16, Bhandoo

city, Meang district (rural area). She is the first spawn mushroom business for 20 year

which starts with selling of spawn of straw mushroom by one package design called a tube

bag. Fist time sells at 15 baht per tube bag and after a merchant from Payao entry the

market in Chiang Rai, she change to sell 10 baht per tube bag.

Business size : medium

Product : spawn of straw mushroom container plastics bag

size 6 ½ x 12 ½ niches.

Price : 10 bath/ tube bag.

Promotion : order processing 100 tube bag/times.

Employee : 3 workers, adjust 3-5 part-time workers (hire neighbor).

Production : 10,000 - 12,000 tube bags/month.

: 20,000 - 60,000 tube bags/month (after rice harvested season)

Shipping : door to door, wholesaler, and customer directly.

22

23

Strength Analysis

She is the first straw mushroom spawning in Chiang Rai. She has high market

share in Chiang Rai. Because of do business long time then she have contact to buy

material especially rodeo. And also low cost investment because she bought any machine

since last 20 year and at that time the machines is low price.

Weakness Analysis

Producing own a mother mushroom without certainly control which may effect to

production. (From interview the mushroom growers, they commented that her

spawn product nowadays is less productivity and they change to buy other place).

Her business management is traditional by family.

Indirect competitor is outside Chiang Rai. There are, Lumpang Farm, PhiJin

Farm, Payao Farm. Almost sell though the middle mans and wholesalers that they buy

from these farm at 10 baht and they sell to mushroom grower 11-14 baht/tube bag.

Business size : medium - large

Product : Spawn of straw mushroom container plastics bag

size 6 ½ x 12 ½ niches.

Price : 10 - 15 baths/ tube bag.

Promotion : almost promote via website and mount to mount

Employee : 5 workers

Production : 30,000 - 50,000 tube bags/month.

: 50,000 – 100,000 tube bags/month (after rice harvested season)

Customer Analysis

At present straw mushroom cultivation is a popular occupation in Chiang Rai

because straw mushroom is a good cash return; they is low-cost activity investment with

west material such as paddy, water hyacinth or banana leaves, and rather easy to grow and

harvest at shortly days. Moreover, market demand for domestic consumption also requires

consistent throughout the year.

23

24

In additional, Government agencies, universities and schools and several private

sector in Chiang Rai such as Kranjapatisenk University, department of Chiang Rai plant

research and Chiang Rai community enterprise provide and support agriculturist turn to

grow a straw mushroom after rice harvest instant of burning paddy. Also educate and

promote a mushroom cultivation by new methods or new alternative crop material.

Customer behavior

Straw mushroom cultivation can classify into two growing methods.

First method is called a culture mushroom cultivation. This method usually

grown after rice harvest season (December – April) by farmer in their field farm or house

area by utilizing straw or hay that they already have (see table 3.1) since history.

Calendar of rice cultivation period

product Harvest

days

Current year Next year

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

Rice 150

Referring : Rice Research Center, Chiang Rai 2010

Rice growing


They don’t need to buy basal substrate material. They soak hey in water, packed

(layered) in the wooden frames (base 40x35x40 cm, high 1.5 m). Then placing spawn

mushroom inside with each layer as the frame is packed or filled until full the wooden

frames (2 cake/1 tube bag) in row. After that covering with plastic sheets and placed under

shade outdoors, it can harvest after 7 days, around 15 days harvesting (see figure 3.1).

Mushroom can produce approximate 1.5-2 kilogram/cake and sell at 40-50 bath/kilogram.

On average, 10 pp can make a cake as 4 rows each row has 22 cake standard (Technical

mushroom cultivation, book).

Almost cultural mushroom grower will grow it in December and February because

these two month temperature is 28-32 C that make mushroom grow well. After March

24

25

until April they will reduce growing and their hay have been already spent (Technical

mushroom cultivation book).

Figure 3.1 straw mushroom cultivation

The second method called a mushroom house/farm can which is modified from a

culture mushroom cultivation for long term use. This made of thatch and bamboo or other

kinds of wood poles and shading net or brick in term of control a temperature and

humidity. Then grower can plant all the year depend on their investment.

Figure 3.2 mushroom house

Generally, producer usually conducts a mushroom house standard size

4.00x10.00x2.50 mates and contain 2 shelves and have 5 levers (Spread spawn 6 tube

bag/layer). This method spends 25 days for growing and harvest after this day around 2

month. Mushroom will stop to grow. They can produce 500-600 kilogram per mushroom

house.

25

26

From interview about the purchasing of spawn mushroom in Chiang Rai grower

that;

1. The first time, almost grower buys the spawn mushroom from Bhandoo farm.

Since 2-3 year, the spawn mushroom is less productive. They change to buy other

place (Lumpang, Payao agency).

2. Almost, a cultural of straw mushroom cultivation by from middleman and they will

purchase mushroom back.

3. A mushroom house cultivation buy spawn from middleman or direct at farm. If

they buy any middleman, they always buy form them.

According customer behavior, we focus the cultural spawn mushroom cultivation as a

direct customer because it is 45.45% of farming grower mushroom in Chiang Rai as

hobby occupation after harvested rice season during December to April.

Moreover, almost they buy from middle-men who buy outside Chiang Rai such as

Lumpang, PhiJinch and they distribute to farmer local areas. Famers usually buy from

them because they have no choice that they don’t know where to buy it, and they also offer

opportunity that they purchase mushroom production back and sell at other market which

farmer no need to find their market. If they know that having one more spawn mushroom

in Chiang Rai and good quality they will turn to buy and also benefit with a middleman to

that the will reduce it cost such as flue.

And the indirect customer should be a cultural market because the number of this

group is small even they have chance to buy spawn mushroom all year.

3.1.3 Market Size and Market Volume

The market size level of company base on a chosen marketing plan and an assumed

marketing environment because each group is defensible. As have a discussion that the

straw mushroom growers plant mushroom by two methods. There are a cultural mushroom

cultivation and a mushroom house cultivation and also each methods grow difference

period depend on their objective as show table below.

26

27

Calendar of rice cultivation period

Harvest Days Current Year Next Year

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

150

Referring: Rice Research Center, Chiang Rai 2010

Rice growing

Rice harvesting

Culture straw mushroom cultivation

Straw mushroom house cultivation

Spawn straw mushroom cultivation is variable of season factor that regular hill and

vlleys in the time series and usually repeat every year. This situation occur because of

customer behavior or buying patter to calendar date or climatic changes. However the

number of grower in each period also difference. Look for overall market size of a cultural

mushroom cultivation and mushroom house cultivation.

Market size is the number of total volume in a particular a spawn of straw

mushroom market per one year. We divide into the main target and second target which

show the calculation next topic.

Market size of cultural straw mushroom cultivation

To analysis we will use customer behavior to calculate market size of cultural straw

mushroom for using spawn.

According Department of Chiang Rai plant research 2009 said that there are 45.45

percents of rice cultivation grower plant straw mushroom after rice harvesting (December-

April). In year 2009, Chiang Rai has 110,628 families of rice cultivation.

Hence, there are 50,280 rice cultivation growers (families) who grow straw

mushroom cultivation (110,628 x 45.45%)

Chiang Rai has rice harvested area is 1,321,029 hectares per year (Agricultural

statistics of Rice Research Center, May 2009).

27

28

Hence, on average, one rice grower has 11≈10 hectares

Calculation from;

1,321,029 hectares

110,628 families

And hay of 10 hectares can grow straw mushroom by cake 88 cakes (Technical

mushroom cultivation, book) And one cake spend ½ spawn mushroom bag

Hence, 50,280 cultural mushroom growers (with average rice harvested area) use

spawn straw mushroom 2,212,320 tube bag per year.

Calculation from;

50,280 mushroom grower x 88 cake 𝑥1

2 𝑠𝑝𝑟𝑎𝑤 𝑏𝑎𝑔

Hence, during December–April of one year Chiang Rai farmer will spend spawn

mushroom about 2,212,320 tube bags per year for a cultural mushroom cultivation.

Market size of straw mushroom house cultivation

According the community enterprise, Chiang Rai, there are 3,750 (averages)

mushroom houses in Chiang Rai (these number not including a temporally mushroom for

mushroom cultivation in after rice harvesting season).

According mushroom house grower customer behavior that mention before,

“mushroom house standard size 4.00x10.00x2.50 mates contain 2 shelves and have 5

layers (spread spawn 6 tube bags/layer)”.

Then, one mushroom house spawn mushroom will use;

= 2 shelves x 5 layers x 6 tube bag/layer

= 60 tube bags per time

Then, mushroom house grower will spend;

= 3,750 house x 60 tube bag

= 225,000 spawn mushroom per time for use

28

29

According customer behavior, one year they grow mushroom;

=365 𝑑𝑎𝑦𝑠

25 𝑑𝑎𝑦𝑠 𝑔𝑟𝑜𝑤𝑖𝑛𝑔 +30 𝑑𝑎𝑦𝑠 ℎ𝑎𝑟𝑣𝑒𝑠𝑖𝑛𝑔

= 4.29 times per year

Hence, one year they will spend spawn mushroom;

= 225,000 tube bags per time x 4.29 time per year

= 965,250 tube bags per year

Therefore, the total market size of spawn straw mushroom is;

= 2,212,320 tube bags + 965,250 tube bags

= 3,177,570 tube bags per year

Table 3.1 market size of spawn mushroom bag

Spawn Mushroom Bag Market Size

Customer Target Market Size

Cultural mushroom grower 2,212,320

Mushroom house 965,250

Total 3,177,570

Market Volume

According to information of comparative analysis, there is only one direct

competitor (Bhandoo Farm) in Chiang Rai and its spawn straw mushroom is less

productivity then the growers change to buy other place. Especially, mushroom house

grower they buy from Lumpang and Phichi province.

Moreover, the middle-men also buy spawn mushroom from outside Chiang Rai,

even they buy as same as 10 baht per tube bags. To analysis that the product control and

product quality by Bhandoo Farm is less efficiency. Hence, to force with direct competitor

and we expect market share in first year is 10% of total market size and market share

29

30

increase initial 5% per year which consider from competitive effect. That they trend to buy

our product and we can maintain existing customer base.

Calculate market volume in first year;

= 3,177,570 tube bags per year of total market size x 10% of market share

= 317,757 tube bags per year

Hence, the total market volume is 317,757 tube bags in first year

We expect market share increase 5% every year (3 years) has shown table 3.2

Table 3.2 market volume expectation

Year Following Market Share Increase Total market share Market volume

(tube bags/year)

1 10% - 10% 317,757

2 10% 5% 15% 476,636

3 15% 5% 20% 635,514

Total 1,429,907

Table 3.3 market volume expectation of direct customer and indirect customer

Year Following Market Share Market Size Market

share

Market volume

(bag/year)

1 Direct customer

( cultural mushroom grower) 2,212,320

10% 221,232

Indirect customer

( mushroom house grower) 965,250

96,525

2 Direct customer


15% 331,848

Indirect customer


144,788

3 Direct customer


20% 442,464

Indirect customer


193,050

Total market volume 1,429,907

30

31

3.3 Marketing Mix Strategy

The marketing mix is the way in which the marketing strategy is put into action

under 4 Ps (Products & Services, Place, Price, and Promotion). To maintain existing

customer base and force them trend to buy our product, we set marketing mix strategy

following;

3.3.1 Product strategy

We create logo under named “ เห็ดพาน ฟาร์ม” to make customer know and remember

our business and tack on bag as show figure 3.3

Figure 3.3 Logo of HenPhan farm

We create a normal logo because it is easy to remember and consisting with farm

location in Phan district.

Spawn mushroom is initial base of mushroom production. If spawn mushroom can

produce more mushroom and rely with environment, mushroom grower always buy from

that supplier. If spawn mushroom is weak of production, they will change to buy from

another supplier. Or, if spawn mushroom is reasonable price and strong quality they will

change to buy that supplier.

In additional, the significant to maintain existing customer base is the quality

product that for sure mushroom grower want spawn mushroom that can produce more

mushroom or high productivity (good fiber mushroom and spread overall bag). So, we

have to control production process to control quality of product and tack sticker label of

31

32

inculcation date or manufacturing date (MFD) with pack of features for dedication to

satisfying customer accept as true. Size 2 cm x 4 cm, the date will be hand writing, See figure.

Figure 3.4 MFD of spawn mushroom bag label

Moreover, we will ship product directly in front straw mushroom farm by pick-up

to make them stratify with customer service, and the beginning month (January to April)

we will road selling directly toward their farm or house as 10 baht per bag which cheaper

than middleman.

3.3.2 Price strategy

Because our company is base on quality of product, our products are set up price

on reasonable price as 10 baht per tube bag same as competitor in Chiang Rai (Bhadoo

Farm).

Moreover, if middleman want to buy the whole volume at least 1,000 bag, we

will discount to sell at ceiling price 9.5 baht per bag.

3.3.3 Place strategy

- HedPhan Chiang Rai is located in Muang Kham city, Phan district, Chiang Rai

which far from Phan transportation 5 kilometers. We located Farm nearly Phan

transportation because reduce the shipping cost and increasing customer’s

decision when can’t buy at our farm.

- As mushroom production learning.

- Setting up the training course 1 time per year.

32

33

3.3.4 Promotion

- Service door to door.

- Vinyl board size 3.5 m x 1 m of 5 units and tag around Chiang Rai.

- Distribute brochure while ship product to mushroom grower in new market

area.

- Focus on advertisement;

Radio: FM98.75MHz, Chiang Rai Community.

Method: Short sport and speaking “product and place and contacting”

Time : 1-3 pm

Social Marketing:

Post short advertisement on following webboard

- http://www.chiangraionline.com/webboard/index.php

- http://www.chiangraitoday.net/publicrelation/publicrelationall.aspx

- http://www.kasetporpeang.com/forums/index.php

Short massage: HedPhan Farm selling the quality spawn of straw

mushroom bag in Chiang Rai as 10 baht per bag and delivery thought out

province. Tel 087-1917039 or 053-671036.

3.4 Sales Forecast

Forecast demand

To forecast demand in first year we use casual or explanatory method relate with

customer behavior and environmental and also according with market volume and

marketing activities that make them to know us and force to buy as calculate topic 3.2

that;

The mushroom house cultivation grower

This customer behavior always use spawn mushroom throughout the year. The market

volume in first year is 96,525 tuber bag depend on 10% market share.

33

34

Calculate demand per month;

HedPhan market volume = 96,525 tube bag per year

Demand of spawn mushroom per month = 96,525 /12

= 8,044 tube bag per month

Hence, overall the year we can sell spawn mushroom for a mushroom house

grower is 8,044 tube bags per month.

The cultural mushroom cultivation grower

These customer behaviors usually use spawn mushroom only after rice harvested

season during December – April, totally 5 months. The market volume in first year is

110,616 tube bags depend on 10% market share.

However, their behavior is not use the same spawn mushroom rate all the months

because of their limit hay and environmental. The first month after rice harvested the start

to sell; we assume all farmers grow straw mushroom. We analysis by using ratio of total 5

month per number of using spawn mushroom has show table

Calculate demand during December to April

Month Ratio Percent Demand

(bag)

Dec 5 33% 221,232

Jan 4 27% 96,525

Feb 3 20% 331,848

Mar 2 13% 144,788

Apr 1 7% 442,464

Total 15 100% 193,050

34

35

Hence, Demand in Fist year has show table

Table 3.4 demand forecast of year 1 as 10% of market share

DEMAND FORECAST OF YEAR 1

Month Cultural mushroom grower

(bag)

Mushroom house grower

(bag) Total

Jan 59,733 8,044 67,777

Feb 44,246 8,044 52,290

Mar 28,760 8,044 36,804

Apr 15,486 8,044 23,530

May - 8,044 8,044

Jun - 8,044 8,044

Jul - 8,044 8,044

Aug - 8,044 8,044

Sep - 8,044 8,044

Oct - 8,044 8,044

Nov - 8,044 8,044

Dec 73,007 8,044 81,051

Total 221,232 96,525 317,757

Calculate demand forecast in Year 2 and 3

As mention in topic 3.2 of chapter 3 that our company expected the market share

increase 5% of total market size every year as 15% in year 2 and 20%. Hence, the demand

in year 2 and 3 has shown next page.

35

36

Table 3.5 Demand forecast of year 2 as 10% of market share



(bag)


(bag) Total

Jan 89,599 12,066 101,665

Feb 66,370 12,066 78,436

Mar 43,140 12,066 55,206

Apr 23,229 12,066 35,295

May - 12,066 12,066

Jun - 12,066 12,066

Jul - 12,066 12,066

Aug - 12,066 12,066

Sep - 12,066 12,066

Oct - 12,066 12,066

Nov - 12,066 12,066

Dec 109,510 12,066 36,158

Total 331,848 144,792 391,222

Table 3.6 Demand forecast of year 3 as 20% of market share



(bag)


(bag) Total

Jan 119,465 16,088 101,665

Feb 88,493 16,088 78,435

Mar 57,520 16,088 55,206

Apr 30,972 16,088 35,295

May - 16,088 12,066

Jun - 16,088 12,066

Jul - 16,088 12,066

Aug - 16,088 12,066

Sep - 16,088 12,066

Oct - 16,088 12,066

Nov - 16,088 12,066

Dec 146,013 16,088 121,575

Total 442,463 193,056 635,519

36

37

Summary Demand Forecast

Table 3.7 total demand of three year

Summary Demand Forecast

Month First Year Second Year Third Year

Jan 67,777 101,665 101,665

Feb 52,290 78,436 78,435

Mar 36,804 55,206 55,206

Apr 23,530 35,295 35,295

May 8,044 12,066 12,066

Jun 8,044 12,066 12,066

Jul 8,044 12,066 12,066

Aug 8,044 12,066 12,066

Sep 8,044 12,066 12,066

Oct 8,044 12,066 12,066

Nov 8,044 12,066 12,066

Dec 81,051 36,158 121,575

Total 317,757 391,222 635,519

3.4.2 Total Sale Forecast

According price strategy in topic 3.3, our company sale 10 baht per unit (on

average). Three year sale forecast show table next page

37

0

Table 3.8 Three Year - sale forecast of year 1

SALE FORECAST OF YEAR 1

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Demand

(bag) 67,776 52,290 36,804 23,530 8,044 8,044 8,044 8,044 8,044 8,044 8,044 81,050 317,757

Price

(baht) 10 10 10 10 10 10 10 10 10 10 10 10 10

Total

Sale 677,764 522,902 368,039 235,300 80,438 80,438 80,438 80,438 80,438 80,438 80,438 810,503 3,177,570

Figure 3.5 Graph of Three Year - Sale forecast of year 1

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Bah

t

Month

Three Year - Sale forecast of year 1

38

39

1

Table 3.9 Three Year - Sale forecast of year 2



Demand

(bag) 101,665 78,435 55,206 35,295 12,066 12,066 12,066 12,066 12,066 12,066 12,066 121,575 476,636

Price

(baht) 10 10 10 10 10 10 10 10 10 10 10 10 10

Total Sale

(baht) 1,016,646 784,352 552,059 352,950 120,656 120,656 120,656 120,656 120,656 120,656 120,656 1,215,755 4,766,355

Figure 3.6 Graph of Three Year – Sale forecast of year 2

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000


Bah

t

Month

Three Year - Sale forecast of year 2

39

2

Table 3.4 Three Year – Sale forecast of year 3



Demand

(bag) 135,553 104,580 73,608 47,060 16,088 16,088 16,088 16,088 16,088 16,088 16,088 162,101 635,514

Price

(baht) 10 10 10 10 10 10 10 10 10 10 10 10 10

Total Sale

(baht) 1,355,528 1,045,803 736,078 470,600 160,875 160,875 160,875 160,875 160,875 160,875 160,875 1,621,006 6,355,140

Figure 3.7 Graph of Three Years – Sale forecast of year 3

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000


Ba

ht

Month

Three Years – Sale forecast of year 3

40

3

3.5 Market Expense

Following table 3.8 mixed marketing activities to calculate

Table 3.12 mixed marketing activities

Mixed Marketing Activities

Month Current Year Next Year

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

Advertisement

Door to Door / / / / / / / / / / / / / / / / / / / / / / / /

Vinyl /

Brochure / /

Center Learning / /

Training Course /

Radio FM98.75MHz

1-3 pm

FM98.75MHz

1-3 pm

Social Marketing

(webboard)

http://www.chiangraionline.com/webboard/index.php

http://www.chiangraitoday.net/publicrelation/publicrelationall.aspx

http://www.kasetporpeang.com/forums/index.php

Rice growing


41

0

Market Expense Description

Door to Door

Door to door every week

Flue Cost: 500 per week or 2,000 per month

Vinyl Advertisement

At Design Alive

Sixe 3.50 x 1.00 meters

Price 420 baht per unit (5 units)

Brochure

At Mr. copy shop

1,000 units

Price 250 baht per time

Center Learning

Expense 1,500 baht per course

Training Course of straw mushroom cultivation

Expense 10,000 baht per course

Radio

98.75 MHz, Chiang Rai Community.

80 baht per time

80 baht per day or 1760 baht per month (Monday-Friday)

Social Marketing

Free

42

43

Summary marketing expense for each three year has show table 3.9

Table 3.13 Three Years- Market Express of year 1

Market Expense Year 1

(Baht)

Market activities Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Door to Door 2,000 2,000 2,000 2,000 1,000 1,000 1,000 1,000 1,000 1,000 2,000 2,000 18,000

Vinyl Board 700 700 700

2,100

Brochure

250

250

Center Learning

-

Training Course

Radio 960 960 960 960 960 960 960 960 960 960 960 960 11520

Total Market Expense 3,660 3,660 3,660 2,960 1,960 1,960 1,960 1,960 1,960 1,960 3,210 2,960 31,870

Table 3.14: Three Years- Market Express of year 2


(Baht)


Door to Door 2,000 2,000 2,000 2,000 1,000 1,000 1,000 1,000 1,000 1,000 2,000 2,000 18,000

Vinyl Board

-

Brochure

250

250

Center Learning

1,500

1,500

Training Course 10,000

10,000

Radio 960 960 960 960 960 960 960 960 960 960 960 960 11520


44

Table 3.15 Three Years- Market Express of year 3


(Baht)


Door to Door 2,000 2,000 2,000 2,000 1,000 1,000 1,000 1,000 1,000 1,000 2,000 2,000 16,000

Vinyl Board

-

Brochure

250

250

Center Learning

1,500

1,500

Training Course 10,000

10,000

Radio 960 960 960 960 960 960 960 960 960 960 960 960 11,520


45

3.6 Conclusion

According information form Department of agricultural Chiang Rai plant research in

year 2009 that Chiang Rai famer grow straw mushroom as 45.45 % of the total 110,628

farmer families. This straw mushroom grower behavior after rice harvested season during

December to April call a cultural mushroom cultivation. The total straw mushroom grower

as 50,280 grower. Moreover, there is a mushroom cultivation as grow thought out the year

which all most growing as main occupation. From the information of Department of

agricultural Chiang Rai plant research as well, there are 3,750 straw mushroom house in

Chiang Rai according 15 SMEC.

Referring the calculating company know market size as 3,177,570 bag per year. We

expect the market size in the first year as 10% and it will increase 5% per month depend on

company running out marketing mix. The total sale forecast of three year has show figure 3.8

that we sale as 10 baht per bag.

Figure 3.8 total three year sale forecast

฿3,177,570

฿4,766,355

฿6,355,140

1 2 3

Three Year Sale Forcast

46

Chapter 4: Technical Feasibility Study

4.1 Production and Operation Analysis

4.1.1 Product Characteristics

4.1.2 Product Process

4.1.3 Location

4.1.4 Store Layout

4.1.5 Machine, Tool and Equipments

4.1.6 Logistics Management

4.1.7 Organization Management

4.2 Cost of Investment

4.2.1 Pre-Operating Cost

4.3 Investment Cost

4.4 Operating Cost

4.4.1 Raw material Cost

4.4.2 Direct Labor

4.1.3 Overhead

4.5 Organization expense (Cost)

4.4.1 Salary

4.4.2 Bonus

4.4.3 Office supplies

4.4.4 Electricity

4.4.5 Water Supply

4.4.6 Telephone

4.4.7 Telephone

4.4.8 Car Insurance

4.4.9 Drinking Water

4.6 Conclusion

47

Chapter 4: Technical Feasibility Study

4.1 Production and Operation Analysis

4.1.1 Product Characteristics

Spawn of Straw mushrooms bag

“Spawn” is a substrate into which a mushroom mycelium has impregnated

and developed, and which will be used as a seed in propagation for mushroom

production.

Spawn of straw mushroom is mycelia of straw mushroom as final spawn by

a specific spawn substrate such as CaCo3, Gypsum and Urea hey containers in

plastic bag (or flat whiskey bottles). Container plastics bag size 6 ½ x 12 ½ niches

or 500 grams.

Figure 4.1 spawn of straw mushroom bag

48

4.1.2 Production process

Figure 4.2 production process charts

1. Preparation of spawn substantial

Table 4.1 Preparation of spawn substantial

NO. MATERIAL RATIO

(Kg) PICTURE

Main Material

1 Mother spawn mushroom

10-15 seeds per bag

50 bag per 1 bottle 2

Residue soybean 30%

3 Cotton west 30%

4

Dry rodeo 30%

5 Lotus waste 10%

Humidly of main material

Water 75%

Supplement of main material

6 - CaSO4 0.01%

7 - Lime 0.01%

8 - MgSO4 0.01%

9 - Gild rice 0.01%

10 - Pumice 0.01%

Preparing Soaking Filling Streaming PluggingStroage or Inoculation

7 days 1 day 7days

49

Packing

11 Bottle neck +closed neck 1 per bag

12 PP bag 1 per bag

13 Rubber tied 1 per bag

2. Soaking of spawn substantial

Table 4.2 Activities of production spawn substantial

Day Activities

1 Soaking lotus waste and rodeo on a cemented floor

2 - Mixed them

- Soak Grind hay and cotton waste

3 Mixed and Spin all of them (lotus waste, rodeo, hay, cotton waste)

4 Adding supplement of main material and mixed

5-14 Mixed them every day

15 Mixed them again and fill in bag

Figure 4.3 soaking of spawn substantial

3. Filled into bags

Fill soaking of spawn substantial in to polypropylene bags size 6 ½ x 11½

inches volume 3/4 bag about or 500 games per bag.

Compacting 2/3 of bag by compacting machines.

50

Putting bottle neck, tie it with a rubber band and plug with cotton and paper (see

figure 4.4).

Figure 4.4 Filled soaking of span substantial

4. Steaming of spawn bag

Pasteurized at 120℃ for 3 hours by steam in pressure cooker (Figure 4.3)

After that cool down at 30 ℃, taking it down in a special room with UV lights

Let the bags cool down without ventilation, or ventilate with filtered air

51

Figure 4.5 Pressure cooking 120℃

5. Inculcation (Putting mother mushroom)

During the process of spawning the following measures need to be taken to

control contamination of the substrate:

Put on clean clothes.

Clean hand with alcohol 70%.

Use a flame near the mouths of the bottles of spawn and plastic bags to

keep the environment more or less sterile (figure 4.3).

Fill a mother mushroom 10-15 seeds.

Hold both substrate and spawn containers in a horizontal position to

prevent spores falling in.

plug with cotton and paper and tried with a rubber band

Note: Do the spawning on the following day (do not forget to turn off the UV

light). Spawning is performed by lifting the plugs from the bags containing the

substrate (thus opening the bags) and putting in a small amount of spawn. This is

the moment at which contamination is most likely to occur. So ensure that the

time the bags are open is as short as possible!

52

Figure 4.6: Steps in spawning procedure

6. Storage and purity

Placed the spawn on shelves in the incubation rooms at temperature required

28-35 C Depending on the strain and temperature the mycelium will colonies the

substrate in 7 days and start to form small fruiting bodies. And they can start to sell

and should within 7 days because the mycelium can’t meet productivity.

Figure 4.7 Storage until colonies after 3-4 week

Production Rate

100 kg of spawn substantial can produce 200 bags

53

Production Time Process

According product process, totally it spend time to produce spawn mushroom is 14-15

days;

Prepare and soaking spawns substantial 7 days

Filling bag, Streaming, Inculcation 1 day * specify

Incubation or storage 6-7 days

Hence, farm should produce before 14 days to serve enough demand in next period.

Capacity of Machine and labor

To calculate capacity of machine and labor with each process, our process is

produce every days in office time (Monday-Friend)we estimate the average demand

of three year demand forecast to find productivity per day that shown calculate;

Year 1 317,758 bags

Year 2 476,636 bags

Year 3 635,514 bags

Average demand per year 1,429,908 bags

Month (12) 119,159 bags

Week (4) 29,790 bags

Day (7) 4,256 ≈ 4,500bags

Note: 1000 kg of spawn substantial can produce 2,000 bags

Working time is 8 hours per day (Monday-Friday)

100 kg of spawn substantial can produce 200 bags

Then 4,500 need to use spawn substantial 2,250 kg

Hence, each machine have to hold capacity at least 4,500 bags and 2,250 kg of

spawn substantial per day. The calculate machine and labor show;

54

Pressuring cooker:

Capacity: 2,500 bag per 3 hour

Process per day: 1-2 time per day (8 hour/3hour)

Unit: 2 machines

1. Grinding Machine:

Capacity: 500 kg per hour

Process per day: 8 hour per day (8 hour/1hour)

Unit: 1 machine

2. Hashing Machine: 3,000 kg per hour

Capacity: 3,000 kg per hour

Process per day: 1,500 kg per day

Unit: 1 machine

3. Compacting Machine:

Capacity: 300 per hour

Process per day: 3,000 bags per day with 3 hour

Unit: 2 machines

4. Workers

= (4 process x 10 hour of total process)/8hour

= 5 workers

55

Table 4.3 The Example of Production time of spawn of straw mushroom

Product Process Schedule of spawn of straw mushroom

No.

Month

Week 1

Week 2 Week 3 Week 4

Day

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

1 2,250 kg 4,500 bags 4,500 bags

2

3

4

5

6

7

Note: according capacity

Prepare + Soaking process (7days)

Filling bag + Streaming + Inculcation (1 day) * specify

Storage (7 day)

Product available for sell

Product discount

56

Production Plan

Season 4,500 bags per day

Normal 2,000 bag per day

*depend on pressuring cooker 2,500 bag per day per machine

Quality Control

The process which entities review the quality of spawn mushroom production that

approach places an emphasis on two aspects:

1. Managing Process

- Training full-time worker that sending them to take cause of spawn mushroom

production work shop 1 day. Costly: 2,000 baht per worker.

- Testing mushroom production every 6 months.

2. Production process

After 7 days, color of mycelium have to be white and cluster together overall bag. The

mushroom mycelium will be increased by growing through a solid organic matrix under

sterilized media

Inoculation rooms

The interior of the inoculation room should consist of non-biodegradable

materials. All the surfaces should be smooth and easy to clean. Shelves should be

designed in such a way that the floor beneath can be cleaned easily. Shelves are

typically made of galvanized iron or Formica. Cleaning inoculation every 3 months

Storage

Keep the spawn under controlled environmental conditions room at 28-32 C.

and only take it out when needed. Cleaning the storage room every 3 month by using

Marathon cleaning.

57

Soaking

The aim of mixing is to distribute ingredients or substantial should not be

delicate, including water, as evenly as possible. If adding a small quantity of one

component like chalk, then it is better to mix it first with some of the substrate and

only then add it to the large heap.

Otherwise its distribution will probably remain non-uniform. Moreover,

lumps might occur and the very high concentration of nutrients at these spots will

result in contamination.

Mixing is also very important for the moisture distribution. The correct

amount of water should be available everywhere in the substrate. After mixing, the

moisture content should be 60 – 65%.

The spawn substantial should not have ammonia smelling and should smell

similar straw mushroom overall.

Filling in bag

Checking bag before filling that no broken or spin.

Do not push compost deep straight down for overall kill infect.

Inoculation

Cleaning clothes and washing hand before inoculation.

Checking mother mushroom before inoculate in bag

Work under method of inoculation only and specialist worker.

Streaming

Checking the capacity and condition of pressures cooker every 6 months.

58

Source of raw materials

No. Raw materials Price per unit Place

Main materials

1 Mother spawn

mushroom 5 baht per bottle Chiang Mai

2 Dry Rodeo 5 baht per kg Chiang Mai

3 Cotton wasted 6 baht per kg Samutprakhan

4 Residue soybean 5 baht per sack Chiang Rai

5 Lotus waste 15 baht per kg Nakhonsawan

Supplement

6 CaSO4 150 baht per sack (50 kg)

Chiang Rai

7 Lime 120 baht per sack (30 kg)

8 MgSO4 600 baht per sack (50 kg)

9 Pumice 150 baht per sack (60 kg)

10 Gild rice 120 baht per sack (40 kg)

Packing

11 Bottle neck 400 baht per bag (2,400 units)

Chiang Rai 12 PP bag 60 baht per bag (800 unit)

13 Rubber tied 90 baht per bag (5,000)

59

4.1.3 Location

HedPhan Farm is located 123, Thungphaw village, Muang Kham city, Phan district

Chiang Rai province. Placed near entrance to the sides street which connect with Phathon

Yothin Road far 500 meters attractions nearby Phan hospital and far away from Phan

transportation 5 kilometers. Far from Muang district 45 kilometers and far from Phayao 45

kilometers.

Figure 4.8HedPahn Farm Location

4.1.4 Farm Layout

HedPhan farm has the area around 1 PP located in Phan district. Compose of;

Building Size (meters)

WxLxH

1) Production building 10x15x5

2) Plugging room 5x6x5

3) Raw material store 4x10x5

4) Inoculation of mushroom house x2 3x18x5

3x15x5

5) Office building

toilet

small empty room

6x6x5

2x2x5

6) Car park 9x6x5

7) Worker toilet 2x2x5

8) Mushroom cultivation testing area

60

Figure 4.9 HedPhan farm layouts

Figure 4.10 HedPhan farm (in front)

Figure 4.10 HedPhan farm layouts (back)

61

1. Production building

This area for using process 1 2 3 and 4

2. Plugging room

This area use process in 5 to putting mother mushroom in bag with clean room or

special room.

3. Raw material store

- Straw : capacity : 20,000 kg

- Cotton : capacity : 5,000 kg

- Rodeo : capacity : 10,000 kg

- Lotus waste : capacity : 5,000 kg

4. Inoculation of mushroom house

5. Office building

- 4 table office

- 1 set of sofa

- Toilet

- Small empty room

6. Car park

- Park 2 cars

Preparing Soaking Filling Streaming

Plugging

Inoculating

Capacity: Max 15,000 -20,000 bags

Capacity: Max 6,000 bags

Capacity: Max 5,000 kg

62

7. Outdoor toilet

- For worker

8. Mushroom cultivation testing area

- Spawn mushroom testing

63

4.1.5 Machine, Tool and Equipments

Operation

Usage Picture Capacity Unit

Price

(unit/baht)

Total

Price (baht)

MACHINE

Steaming

- 2,500 bags

- using gas

- 100 -120 C

+ Gaate126

unit

(free)

2 70,000 140,000

Compacting

300 bag per

hour 2 13,000 26,000

Grinding

500 kg per

hour 2 20,000 20,000

Composting

3,000 kg per

hour 1 50,000 50,000

VEHICLE

Pickup

Interest 0%

Credit 36

months

540,000 540,000

EQUIPMENT & TOOLS

Small hone

5 45 225

http://www.sritongmushroom.com/index.php?lay=show&ac=article&Id=326528&Ntype=1

64

Chair

5 80 400

Shower

2 65 130

40 GL. water

tank

5 350 1,750

Rubber pip

25 m

1 900 900

Jug

5 55 275

Big hone

3 900 1,800

Knife 3 35 105

Small tank

5 45 225

Inoculate

iron

5 50 250

Alcohol

lame

3 250 750

Alcohol

1 100 100

Gaate126

unit

500 50 25,000

Grove cotton

100 50 80

Bloom

3

20 150

65

Plastic

basket

10 150 1500

Convince

force

3 300 9000

Bloom

10 15 150

Plastic chair

10 120 1,200

Keeping

garbage

5 20 100

Containing

water

+glass

2 5,090 10,180

Cleaning

Supplies

1 2,500 2,500

Office Equipment

Organization Usage Unit Price

(baht/unit)

Total Price

(Baht)

OFFICE EQUIPMENT

Computer 2 17,000 34,000 Fan [wall] 1 2,500 2,500

Fax 1 5,290 5,5290

Printing 1 2,199 2,199

Office desk 4 2,500 10,000

Chair 4 1,680 6,720 Air 1 39,990 39,990

File cabinet 2 2,825 5,650

Document file 1 3,390 3,390

Telephone 1 1,490 1,490 Sofa 1 11,900 11,900

Refrigerator 1 5,590 5,590

66

Clock 1 299 299

Dry Chemical 1 650 650

OFFICE SUPPLIES

ex. Pen bill paper 1 5,000 5,000

UTILITY SUPPORT


Containing cool water 2 5,090 10,180

Microwave 1 1,350 1,350

Container hot water 1 680 680

Television 1 3,080 3,080

Radio 1 3,425 3,425


Containing cool water 2 5,090 10,180

MISCELLANEOUS

ex. Cleaning 1 1,200 1,200

4.1.6 Logistics Management

4.1.6.1 Inventory Management

HedPhan Farm is operational under stock to order. We set inventory policy by using

Periodic Order Quantity because the production demand is varied depend on season period.

To determining how much to order and when to order for meet customer demand and reduce

cost of inventory we set policy of purchase raw material using enough within 3 month.

Calculate material for use

Table: material usage in percent

NO. INVENTORY RATIO

1 Mother spawn mushroom 1 bottle per 50 bag

2 Residue soybean 30% per kg

3 Cotton west 30% per kg

4 Dry rodeo 30% per kg

5 Lotus waste 10% per kg

6 CaSO4 0.01% per kg

67

7 Lime 0.01% per kg

8 MgSO4 0.01% per kg

9 Gild rice 0.01% per kg

10 Pumice 0.01% per kg

11 Bottle neck +closed neck 1 per bag

12 PP bag 1 per bag

13 Rubber tied 3 per bag

68

Table 4.4 Material usage in unit of Year 1

Material usage in unit of Year 1


Demand

Bag 67,776 52,290 36,804 23,530 8,044 8,044 8,044 8,044 8,044 8,044 8,044 81,050 158,879

Kilogram 33,888 26,145 18,402 11,765 4,022 4,022 4,022 4,022 4,022 4,022 4,022 40,525 79,440

Material Usage

Mother spawn

mushroom (unit) 1,356 1,046 736 471 161 161 161 161 161 161 161 1,621 6,355

Residue soybean

(kg) 10,166 7,844 5,521 3,529 1,207 1,207 1,207 1,207 1,207 1,207 1,207 12,158 47,664

Cotton west (kg) 10,166 7,844 5,521 3,529 1,207 1,207 1,207 1,207 1,207 1,207 1,207 12,158 47,664

Dry rodeo (kg) 10,166 7,844 5,521 3,529 1,207 1,207 1,207 1,207 1,207 1,207 1,207 12,158 47,664

Lotus waste (kg) 3,389 2,615 1,840 1,176 402 402 402 402 402 402 402 4,053 15,888

CaSO4 (kg) 33.9 26.1 18.4 11.8 4.0 4.0 4.0 4.0 4.0 4.0 4.0 40.5 158.9

Lime (kg) 33.9 26.1 18.4 11.8 4.0 4.0 4.0 4.0 4.0 4.0 4.0 40.5 158.9

MgSO4 (kg) 33.9 26.1 18.4 11.8 4.0 4.0 4.0 4.0 4.0 4.0 4.0 40.5 158.9

Gild rice (kg) 33.9 26.1 18.4 11.8 4.0 4.0 4.0 4.0 4.0 4.0 4.0 40.5 158.9

Pumice (kg) 33.9 26.1 18.4 11.8 4.0 4.0 4.0 4.0 4.0 4.0 4.0 40.5 158.9

Bottle neck (unit) 67,776 52,290 36,804 23,530 8,044 8,044 8,044 8,044 8,044 8,044 8,044 81,050 317,757

PP bag (unit) 67,776 52,290 36,804 23,530 8,044 8,044 8,044 8,044 8,044 8,044 8,044 81,050 317,757

Rubber tied (unit) 203,329 156,870 110,412 70,590 24,131 24,131 24,131 24,131 24,131 24,131 24,131 243,151 953,271

69

Table 4.5 Purchase policy by POQ in Year 1 of 3 month purchase policy

Amount Unit Purchase

3 month purchase policy

Purchase policy in Year 1 of 3 month purchase policy


Mother spawn mushroom (bottle) 4,706 1,189 724 2,720 9,338

Residue soybean (kg) 35,296 8,914 5,430 20,399 70,038

Cotton west (kg) 35,296 8,914 5,430 20,399 70,038

Dry rodeo (kg) 35,296 8,914 5,430 20,399 70,038

Lotus waste (kg) 11,765 2,971 1,810 6,800 23,346

CaSO4 (sack) 2 1 0 1 5

Lime (sack) 4 1 1 2 8

MgSO4 (sack) 2 1 0.4 1 5

Gild rice (sack) 2 0.5 0.3 1 4

Pumice (sack) 2 1 0.4 1 5

Bottle and Close neck (bag) 98 25 15 57 195

PP bag (bag) 294 74 45 170 584

Rubber tied (bag) 141 36 22 82 280

70

Table 4.6 Material usage in Year 2

Material usage in unit of Year 2


Demand

Bag 101,665 78,435 55,206 35,295 12,066 12,066 12,066 12,066 12,066 12,066 12,066 121,575 476,636

Kilogram 50,832 39,218 27,603 17,647 6,033 6,033 6,033 6,033 6,033 6,033 6,033 60,788 238,318

Material Usage

Mother spawn

mushroom (unit) 2,033 1,569 1,104 706 241 241 241 241 241 241 241 2,432 9,533

Residue soybean (kg) 15,250 11,765 8,281 5,294 1,810 1,810 1,810 1,810 1,810 1,810 1,810 18,236 71,495

Cotton west (kg) 15,250 11,765 8,281 5,294 1,810 1,810 1,810 1,810 1,810 1,810 1,810 18,236 71,495

Dry rodeo (kg) 15,250 11,765 8,281 5,294 1,810 1,810 1,810 1,810 1,810 1,810 1,810 18,236 71,495

Lotus waste (kg) 5,083 3,922 2,760 1,765 603 603 603 603 603 603 603 6,079 23,832

CaSO4 (kg) 50.8 39.2 27.6 17.6 6.0 6.0 6.0 6.0 6.0 6.0 6.0 60.8 238.3

Lime (kg) 50.8 39.2 27.6 17.6 6.0 6.0 6.0 6.0 6.0 6.0 6.0 60.8 238.3

MgSO4 (kg) 50.8 39.2 27.6 17.6 6.0 6.0 6.0 6.0 6.0 6.0 6.0 60.8 238.3

Gild rice (kg) 50.8 39.2 27.6 17.6 6.0 6.0 6.0 6.0 6.0 6.0 6.0 60.8 238.3

Pumice (kg) 50.8 39.2 27.6 17.6 6.0 6.0 6.0 6.0 6.0 6.0 6.0 60.8 238.3

Bottle neck (unit) 101,665 78,435 55,206 35,295 12,066 12,066 12,066 12,066 12,066 12,066 12,066 121,575 476,636

PP bag (unit) 101,665 78,435 55,206 35,295 12,066 12,066 12,066 12,066 12,066 12,066 12,066 121,575 476,636

Rubber tied (unit) 304,994 235,306 165,618 105,885 36,197 36,197 36,197 36,197 36,197 36,197 36,197 364,726 1,429,907

71






Mother spawn mushroom (bottle) 6,824 1,723 1,050 4,225 13,822

Residue soybean (kg) 51,179 12,925 7,873 31,691 103,668

Cotton west (kg) 51,179 12,925 7,873 31,691 103,668

Dry rodeo (kg) 51,179 12,925 7,873 31,691 103,668

Lotus waste (kg) 17,060 4,308 2,624 10,564 34,556

CaSO4 (sack) 3 1 1 2 7

Lime (sack) 6 1 1 4 12

MgSO4 (sack) 3 1 1 2 7

Gild rice (sack) 3 1 0.4 2 6

Pumice (sack) 3 1 1 2 7


PP bag (bag) 426 108 66 264 864

Rubber tied (bag) 205 52 31 127 415

72

Table 4.8 Material usage in Year 3

Material usage in Year 3


Demand

Bag 135,553 104,580 73,608 47,060 16,088 16,088 16,088 16,088 16,088 16,088 16,088 162,101 635,514

Kilogram 67,776 52,290 36,804 23,530 8,044 8,044 8,044 8,044 8,044 8,044 8,044 81,050 317,757

Material Usage

Mother spawn

mushroom (unit) 2,711 2,092 1,472 941 322 322 322 322 322 322 322 3,242 12,710

Residue soybean (kg) 20,333 15,687 11,041 7,059 2,413 2,413 2,413 2,413 2,413 2,413 2,413 24,315 95,327

Cotton west (kg) 20,333 15,687 11,041 7,059 2,413 2,413 2,413 2,413 2,413 2,413 2,413 24,315 95,327

Dry rodeo (kg) 20,333 15,687 11,041 7,059 2,413 2,413 2,413 2,413 2,413 2,413 2,413 24,315 95,327

Lotus waste (kg) 6,778 5,229 3,680 2,353 804 804 804 804 804 804 804 8,105 31,776

CaSO4 (kg) 67.8 52.3 36.8 23.5 8.0 8.0 8.0 8.0 8.0 8.0 8.0 81.1 317.8

Lime (kg) 67.8 52.3 36.8 23.5 8.0 8.0 8.0 8.0 8.0 8.0 8.0 81.1 317.8

MgSO4 (kg) 67.8 52.3 36.8 23.5 8.0 8.0 8.0 8.0 8.0 8.0 8.0 81.1 317.8

Gild rice (kg) 67.8 52.3 36.8 23.5 8.0 8.0 8.0 8.0 8.0 8.0 8.0 81.1 317.8

Pumice (kg) 67.8 52.3 36.8 23.5 8.0 8.0 8.0 8.0 8.0 8.0 8.0 81.1 317.8

Bottle neck (unit) 135,553 104,580 73,608 47,060 16,088 16,088 16,088 16,088 16,088 16,088 16,088 162,101 635,514

PP bag (unit) 135,553 104,580 73,608 47,060 16,088 16,088 16,088 16,088 16,088 16,088 16,088 162,101 635,514

Rubber tied (unit) 406,658 313,741 220,823 141,180 48,263 48,263 48,263 48,263 48,263 48,263 48,263 486,302 1,906,542

73






Mother spawn mushroom (bottle) 9,098 2,298 1,400 5,634 12,796

Residue soybean (kg) 68,239 17234 10497 42255 95,969

Cotton west (kg) 68,239 17234 10497 42255 95,969

Dry rodeo (kg) 68,239 17234 10497 42255 95,969

Lotus waste (kg) 22,746 5,745 3,499 14,085 31,990

CaSO4 (sack) 5 1 1 3 6

Lime (sack) 8 2 1 5 11

MgSO4 (sack) 5 1 1 3 6

Gild rice (sack) 4 1 1 2 5

Pumice (sack) 5 1 1 3 6


PP bag (bag) 569 144 87 352 800

Rubber tied (bag) 273 69 42 169 384

74

4.1.6.2 Transportation Management

HedPhan Farm has 2 types of transportation process which are in source logistic and

outsource transportation

Outsource transportation system

It is the transportation for shipping through suppliers or raw material source outside

Chiang Rai. To pick up the raw material we will outsource third party transportation name

Jongjarean transport. Container by 6 wheel truck which have capacity 7 ton.

Capacity : Long 6.5 meters, x Wide 2.25 meters, x High 3.0 meters.

Lead time : 1-3 days

The rate of service according our supplier has shown by following table

No. Raw materials Transpiration rate

(baht) Place

3 Cotton wasted 12,000 Samutprakhan

4 Residue soybean 5,500 Chiang Rai

5 Lotus waste 2,500 Nakhonsawan

75

In source transportation system

This transportation system we divide into shipping to customer and pick up raw

material.

Picking up raw material

We use own Vigo pick-up car to buy raw materials in class B and C and special raw

materials. The rate of shipping cost has show in the table below

No. Raw materials Transpiration rate

(baht) Place

1 Mother spawn mushroom 750 Chiang Mai

3 Dry Rodeo 750 Chiang Mai

6 CaSO4 100

Chiang Rai

7 Lime 100

8 MgSO4 100

9 Pumice 100

10 Gild rice 100

11 Bottle neck 150

Chiang Rai 12 Closed neck 150

13 PP bag 150

14 Rubber tied 150

Shipping to customer

It is the transportation services to customer that serve the movement of spawn

mushroom to customer from the store to the place that customer want. Each place in Chiang

Rai the flue cost per day is 500 baht. The totally on pick-up can contain 5,000 bags.

76

4.1.7 Organization Management

HedPhan Farm is register under company limited as juristic person registration

submitted that the name’s company is “ HedPhan Farm”. Compose of company logo as show

figure below And registered location at 123, Thungphaw village, Muang Kham city, Phan

district Chiang Rai province. The capital investment is 2,000,000 baht, number of stock is

100 value per stock of 20,000 stock.

Figure company logo

List of shareholder

1. Mr. Nutthanee Shongsiri 26 years old

2. Miss. Pharita Vijiyaphon 25 years old

3. Mr. Phongsathod Yavichiphan 25 years old

4. Miss. Mananya Suwan 21 years old

5. Mr. Thawesak Khanthon 27 years old

4.1.7.1 Project construction

To construction project, the company hire a contractor named PhanSangBan

company to control and build the all building which expected and make contact under 3

month completely. Moreover this company also set all electricity and water infrastructures,

operating telephone, internet network contacting. HedPhan Farm use own layout.

77

4.1.7.2 Project scheduling

Activities Month

6 7 8 9 10 11 12 1 2 3 4 5

1. Loan money

2. Construct building

3. Order machine

4. Setting machine

5. Order raw material

6. operating

4.1.7.3 Operating period

Figure 4.12 Organization structure

Human resource Requirement

1. Top manager (1 position)

Task:

- Oversee all departments and along with to sign in that agreement documents

Characteristic:

- Male/Female, Age 25 up

- Bachelor degree up and work experience must more than 1years

- Can use with best Microsoft Office such as Word, Excel

- Have good management skill and good relationship

Salary: 12,000 baht per month

Top manager

AccontantSale and Marketing

person Operation Person

78

2. Accountant (1 position)

Task:

- Work that relate to financial and accounting

- Manage and control budget of company

Characteristic:

- Male or female, Age 24-30

- Graduated high vocational certificate or bachelor degree in account

- More than 1 year of work experience that relate to finance

- Computer skill especially Excel and Express

- To be honest on work

Salary: 8,000 per month

3. Sale and marketing specialist (1 Position )

Task:

- Do marketing and advertising

- Analysis market trend form season

- Managing for product and service to customers satisfaction

- Continuous to fine new customer

Characteristic:

- Male / Female, Age 24-30

- Bachelor degree of marketing or relate filed

- Computer skill especially Microsoft

- Have negotiation skill, good personality and relationship


4. Production Specialist (1 position)

Task:

- Plan and control production process

- Control quality product

Characteristic:

- Male Age 24-30

- Graduated high vocational certificate or bachelor degree in science

- Can analyze and plan production

79

- Hard working

- To be honest on work


5. Driver and shipper (2 position)

Task:

- Driving to shipping product

Characteristic:

- Male 24 up

- Having A driver's license

- Available in Chiang Rai only

Salary: 180 baht per person

Characteristic of administration

- Officer : start work at 8 am 5 pm

- Worker : start work at 8 am 5 pm

Because of this project is a new project. The administration, which has executive

offices and factory equipment associated with the core service management system and to

help each other and focus on living together as families.

Compensation planning

- Having holiday 13 day under law.

- Bonus 1,000 baht per person in the last every year.

- Over late work at 80 baht per hour.

Production plan of lack of the job

- Must be notice before 30 days in case of leaving work

- Must be notice before 1 day in case of sicking

80

Human Resource Development

- Training production worker every year. Cost 2,000 per person

- Evaluation employee every year.

4.2 Cost of Investment

Pre-Operation cost

Land 106,500 baht

Building 550,350 baht

Water infrastructure 65,000 baht

Electronic infrastructure 35,000 baht

Company Limited Registration 11,500 baht

Telephone service 3,250 baht

Internet service 950 baht

Total Pre-Operation Cost 772,550 baht

81

4.3 Investment Cost

4.3.1 Investment Cost

Investment Cost

Investment Unit Price Total Price Year Dep. Annual Dep. Monthly Dep.

Machine

138,000 221,000

44,200 3,683

Streaming 2 70,000 140,000 5 28,000 2,333

Compacting 2 13,000 26,000 5 5,200 433

Grinding 1 20,000 20,000 5 4,000 333

Hashing 1 35,000 35,000 5 7,000 583

Vehicle

540,000 540,000

108,000 9,000

Pick-up 1 540,000 540,000 5 108,000 9,000

Equipments & Tools 11190 54,400

54,400 4,533

Small hone 5 45 225 1 225 19

Chair 5 80 400 1 400 33

Shower 2 65 130 1 130 11

40 GL. water tank 5 350 1,750 1 1,750 146

Rubber pip 25 m 1 900 900 1 900 75

Jug 5 55 275 1 275 23

Big hone 3 900 2,700 1 2,700 225

Knife 3 35 105 1 105 9

Small tank 5 45 225 1 225 19

Inoculate iron 5 50 250 1 250 21

Alcohol lame 3 250 750 1 750 63

Alcohol 1 100 100 1 100 8

Gaate126 unit 500 50 25,000 1 25,000 2,083

82

Grove cotton 100 50 5,000 1 5,000 417

Bloom 3 20 60 1 60 5

Plastic basket 10 150 1,500 1 1,500 125

Convince force 3 300 900 1 900 75

Bloom 10 15 150 1 150 13

Plastic chair 10 120 1,200 1 1,200 100

Keeping garbage 5 20 100 1 100 8

Containing cool water 2 5,090 10,180 1 10,180 848

Cleaning Supplies 1 2,500 2,500 1 2,500 208

Office Equipment 97,303 179,668

59,889 4,991

Computer 2 17,000 34,000 3 11,333 944

Fan [wall] 1 2,500 2,500 3 833 69

Fax 1 5,290 55,290 3 18,430 1,536

Printing 1 2,199 2,199 3 733 61

Office desk 4 2,500 10,000 3 3,333 278

Chair 4 1,680 6,720 3 2,240 187

Air 1 39,990 39,990 3 13,330 1,111

File cabinet 2 2,825 5,650 3 1,883 157

Document file 1 3,390 3,390 3 1,130 94

Telephone 1 1,490 1,490 3 497 41

Sofa 1 11,900 11,900 3 3,967 331

Refrigerator 1 5,590 5,590 3 1,863 155

Clock 1 299 299 3 100 8

Dry Chemical 1 650 650 3 217 18

Office supplies

5,000 5,000

1,667 139

ex. Pen bill paper 1 5,000 5,000 3 1,667 139

Utility expense

19,215 24,305

8,102 675

Refrigerator 1 5,590 5,590 3 1,863 155

83

Containing cool water 2 5,090 10,180 3 3,393 283

Microwave 1 1,350 1,350 3 450 38

Container hot water 1 680 680 3 227 19

Television 1 3,080 3,080 3 1,027 86

Radio 1 3,425 3,425 3 1,142 95

Miscellaneous

1,200 1,200

400 33

ex. Cleaning 1 1,200 1,200 3 400 33

Total Cost of Investment

1,025,573

276,658 23,055

84

4.3.2 Three Year Depreciation

Table 4.10 deprecation of year 1

Depreciation of Year 1

Investment Amount

Value Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Operation Expense

Machine 221,000 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 44,200

Equipment & Tools 54,400 4,533 4,533 4,533 4,533 4,533 4,533 4,533 4,533 4,533 4,533 4,533 4,533 54,400

Total 275,400 8,217 8,217 8,217 8,217 8,217 8,217 8,217 8,217 8,217 8,217 8,217 8,217 98,600

Administration Expense

Building 550,350 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 27,516

Vehicle 540,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 108,000

Office Equipment 179,668 4,991 4,991 4,991 4,991 4,991 4,991 4,991 4,991 4,991 4,991 4,991 4,991 59,889

Office Supplies 5,000 139 139 139 139 139 139 139 139 139 139 139 139 1,667

Utility expense 24,305 675 675 675 675 675 675 675 675 675 675 675 675 8,102

Miscellaneous 1200 33 33 33 33 33 33 33 33 33 33 33 33 400

Total 750,173 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 178,058

Total Dep. 1,025,573 23,055 23,055 23,055 23,055 23,055 23,055 23,055 23,055 23,055 23,055 23,055 23,055 276,658

85



Investment Amount


Operation Expense

Machine 176,800 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 44,200

Total 176,800 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 44,200


Building 522,834 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 27,516

Vehicle 480,111 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 108,000


Office Supplies 3,333 139 139 139 139 139 139 139 139 139 139 139 139 1,667

Utility expense 16,203 675 675 675 675 675 675 675 675 675 675 675 675 8,102

Miscellaneous 800 33 33 33 33 33 33 33 33 33 33 33 33 400

Total 620,226 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 178,058

Total Dep. 797,026 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 222,258

86



Investment Amount


Operation Expense

Machine 132,600 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 44,200

Total 132,600 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 3,683 44,200


Building 495,318 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 2,293 27,516

Vehicle 372,111 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 9,000 108,000


Office Supplies 1,667 139 139 139 139 139 139 139 139 139 139 139 139 1,667

Utility expense 8,102 675 675 675 675 675 675 675 675 675 675 675 675 8,102

Miscellaneous 400 33 33 33 33 33 33 33 33 33 33 33 33 400

Total 442,168 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 14,838 178,058

Total Dep. 574,768 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 18,521 222,258

87

4.4 Operating Cost

4.4.1 Direct material Cost

Material usage and unit price

NO. MATERIAL Price per Unit PICTURE

Main Material

1

Mother spawn mushroom 5 baht per bottle

2

Residue soybean 10 baht per kg

3 Cotton west 6 baht per kg

4

Dry rodeo 30 baht per kg

5 Lotus waste 15 baht per kg

Supplement of main material

6 CaSO4 150 baht per sack

7 Lime 120 baht per sack

8 MgSO4 600 baht per sack

9 Gild rice 50 baht per sack

10 Pumice 120 baht per sack

Packing

11 Bottle neck +closed neck 400 baht per bag

12 PP bag 60 baht per bag

13 Rubber tied 90 baht per bag

88

Calculate unit cost of raw material

Material Unit Amount Total Cost Unit Cost

Mother spawn mushroom 5 5 5

Residue soybean 5 5 5

Cotton west 6 6 6

Dry rodeo 5 5 5

Lotus waste 15 15 15

CaSO4 (sack) 30 150 5

Lime 30 120 4

MgSO4 30 600 20

Gild rice 50 120 2

Pumice 30 120 4

Bottle neck 2400 400 0.17

PP bag 800 60 0.08

Rubber tied 5,000 90 0.02

Table 4.13 cost per bag

Material Percent

usage

Material

usage

Total material

usage

Unit

price Total cost

Mother spawn mushroom 0.20% 1 0.002 ฿0.002 ฿ 0.000004

Residue soybean 30% 0.5 0.15 0.15 0.02

Cotton west 30% 0.5 0.15 0.15 0.02

Dry rodeo 30% 0.5 0.15 0.15 0.02

Lotus waste 10% 0.5 0.05 0.05 0.00

CaSO4 0.01% 0.5 0.00005 0 0.000000005

Lime 0.01% 0.5 0.00005 0 0.000000005

MgSO4 0.01% 0.5 0.00005 0 0.000000005

Gild rice 0.01% 0.5 0.00005 0 0.000000005

Pumice 0.01% 0.5 0.00005 0 0.000000005

Bottle neck 1 1 1 1.00 1

PP bag 1 1 1 1.00 1

Rubber tied 1 1 1 1.00 1

Total Unit Cost

฿ 3.07

89

4.4.2 Direct Labor Cost

Worker: (5 people)

Task: production work

Qualify: Male or Female 20 year old up

Salary: 180 baht per day

Total Direct Labor cost per month is (180 x 5)*22 = 19,800 baht per month.

4.4.3 Manufacturing Overhead

1. Training full-time worker that sending them to take cause of spawn mushroom

production work shop 1 day. Costly: 2,000 baht per worker.

2. Inoculation and plugging spawn mushroom room clearing every 6 month cost

2,000 baht.

3. Deprecation of machine and Equipment & Tools, 3,683 and 4,533

4. Ordering Cost per time (flue cost)

o Mother spawn mushroom

Transportation cost (Pick up) 750 baht per time

o Residue soybean

Transportation cost (6 wheels vehicle ) 15,000 baht per time

o Cotton west

Transportation cost (6 wheels vehicle ) 5,500 baht per time

o Dry rodeo

Transportation cost (Pick up) 750 baht per time

o Lotus waste

Transportation cost (Pick up) 2,500 baht per time

According inventory management topic the value purchase of material has show table.

90

Table 4.14 cost of operating Year 1

COST OF OPERATING YEAR 1


DIRECT METERIAL

Beginning materials inventory - 494,949 231,000 45,223 137,850 97,247 56,644 144,806 104,203 63,600 506,774 466,171

Add: Purchases of materials 837,069 - - 211,401 - - 128,766 - - 483,777 - -

Materials available for use 837,069 494,949 231,000 256,624 137,850 97,247 185,409 144,806 104,203 547,377 506,774 466,171

Materials use in production 342,120 263,949 185,778 118,774 40,603 40,603 40,603 40,603 40,603 40,603 40,603 409,123

Ending materials Inventory 494,949 231,000 45,223 137,850 97,247 56,644 144,806 104,203 63,600 506,774 466,171 57,048

DIRECT LABOR

5 workers x 180 baht x 22 hours 19,800 19,800 19,800 19,800 19,800 19,800 19,800 19,800 19,800 19,800 19,800 19,800

OVERHEAD

Flue Cost of martial 23,000

23,000

23,000

23,000

Training Cost 10,000

Bonus

5,000

Cleaning supplies

2,000

2,000

Total overhead 33,000

23,000 2,000

23,000

23,000 2,000 5,000

TOTAL OPERATING COST 394,920 283,749 205,578 161,574 62,403 60,403 83,403 60,403 60,403 83,403 62,403 433,923

91


COST OF OPERATING YEAR 2


DIRECT METERIAL

Beginning materials inventory 57,048 723,498 327,575 48,909 168,662 107,758 46,853 167,410 106,506 45,601 715,151 654,246

Add: Purchases of materials 1,179,630

- 297,915

- 181,462

- 730,454

-

Materials available for use 1,236,678 723,498 327,575 346,823 168,662 107,758 228,315 167,410 106,506 776,055 715,151 654,246



DIRECT LABOR


OVERHEAD

Flue Cost of martial 23000

23000

23000

23000 Training Cost

Bonus

5,000

Cleaning supplies

2,000

2,000


23,000 2,000

23,000

23,000 2,000 5,000


92


COST OF OPERATING COST YEAR 3


DIRECT METERIAL

Beginning materials inventory 40,561 929,162 401,265 29,710 189,381 108,175 26,969 187,712 106,506 25,300 918,033 836,827

Add: Purchases of materials 1,572,840

397,219

241,949

973,939

Materials available for use 1,613,402 929,162 401,265 426,929 189,381 108,175 268,918 187,712 106,506 999,239 918,033 836,827



DIRECT LABOR


OVERHEAD

Flue Cost of martial 23000

23000

23000

23000

Training Cost

Bonus

5,000

Cleaning supplies

2,000

2,000


23,000 2,000 - 23,000

23,000 2,000 5,000


93

4.5 Organization expense (Cost)

4.4.1 Salary

Employee Unit

Salary

(baht per month)

Total Salary

(baht per month)

1 Top manager 1 12,000 12,000

2 Accountant 1 8,000 8,000

3 Sale and marketer 1 8,000 8,000

4 Production specialist 1 8,000 8,000

5 Driver 2 180 baht per day 7,920

Total Payment 6 43,920

4.4.2 Bonus

Employee Unit

Bonus

(baht per year)

Total Bonus

(baht per month)

1 Top manager 1 1,000 1,000

2 Accountant 1 1,000 1,000

3 Sale and marketer 1 1,000 1,000

4 Production specialist 1 1,000 1,000

5 Driver 2 1,000 2,000

Total Payment 6 6,000

4.4.3 Office Supplies

Approximated payment for office supplies as 2,000 per year

4.4.4 Electricity supply

HedPhan Farm calculates the electricity on the rate of The Provincial Electricity

Authority, base on real situation, calculating from the number of equipments, electrical

appliances, lights in every room and the front area, and in inventory room, and also use in

production activities.

For perform o a business enterprise, business enterprise cum residence, industrial and

state enterprise or the alike, including its compound, with a maximum 15-minute integrated

demand of less than 30 kilowatt through a single Watt-hour meter. The electronic rate show

in table

94

Time of Use Tariff (TOU tariff)

Normal Rate Electricity Charge

(baht/kWh)

Service Chart

(baht/month)

2.1.1 Energy 22- 23 kV. 2.2649 228.71

2.1.2 Energy below 22 kV. 40.90

150 first unit (unit 0-150) 1.8047

250 next unit ( unit 151-400) 2.7781

Over 400 next unit (unit 401 more) 2.9780

Calculate Electricity expense per month with full time usage ( December-April)

22 meters pressure in the normal rate

Estimate use of electricity 500 unit x 2.4649 = 1,232.45 baht

Add. (+) Service expense = 228.17 baht

Total Electricity expense / month = 1,460.62 baht

Note except during December to April the usage will reduce 50%

4.4.5 Water Supply

Water supply is mostly used for production activities and washing equipments.

Regulation (14th

issue) B.E. 2009

Water Rate

Level of water used

cum./month Small Business

Baht/cmu. Satang/Liters

Low level Rat 100 liters

0-10 11.45 1.145

11-20 14.20 1.420

21-30 15.45 1.545

31-30 16.45 1.645

51-50 16.85 1.685

81-100 16.95 1.695

101-300 17.05 1.705

301-1,000 17.15 1.715

1,001-2,000 17.25 1.725

2,001-3,000 17.35 1.735

>3,000 17.45 1.745

95

Calculating water supply expense with full time usage (December-April)

Water supply 45 x 16.45 = 493.5 Baht / per month

Add. (+) VAT 7% = 34.54 baht

Total water expense/month = 528.05 baht

Note except during December to April the usage will reduce 50%

4.4.6 Telephone

The company has installed one telephone in the office room to use for the business,

such as ordering products and contacting customers. The amount of telephone usage is

estimated to be 200 times per month, with telephone fee for 3 Baht per one call.

Calculating telephone expense

Telephone usage 200 x 3 = 600 Baht

Add. (+) VAT 7% = 51.81 Baht

Add. (+) Service Chart = 100 Baht

Total = 751.81 Baht/per year

4.4.7 TOT Internet

TOT internet and telephone expense/month with Hi speed Internet 3BB 4M.

Calculating Internet expense

Internet expense = 590 Baht

Add. (+) VAT 7% = 41.31 Baht

Add. (+) Service Chart = 100 Baht

Total = 731.3 Baht

4.4.8 Car Insurance

HedPhan company have to purchase car insurance through Viriyha Insurance which

is Insurance 3 plus. Our limited protection that will get is 1,000,000 baht. The total of

insurance car plus enactment car free is 5,800 baht per year. It is a fix cost, we have to pay in

the beginning of every year.

96

4.4.9 Drinking Water

We shop order drinking water from the nearest supplier from the shop name

NumPhan enterprise which provide to customers and employees. The consumption of water

is calculated to 400 liters per month, a 20 liter bottle is 15 Baht per bottle, which will be 30

bottles per month, according to the number of employees and the forecasting number of

customers.

Calculating drinking water expense

Drinking water 30 X 15 = 450 Baht/per month

4.4.10 Borrowing

Borrow 2,000,000 baht

Interest rate 12%

Period 5 years

Payment per month 44,489 baht

97

Table 4.17 Organization Expense

ORGANIZATION EXPENSE OF YEAR 1

Expense Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Salary 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 527,040

Bonus

9,000 9,000

Office Supplies

0

Water Supply 528 528 528 528 264 264 264 264 264 264 264 528 4,488

Electricity supply 1,461 1,461 1,461 1,461 730 730 730 730 730 730 730 1,461 12,413

Telephone 752 752 752 752 730 730 730 730 730 730 730 730 8,847

Internet 590 590 590 590 590 590 590 590 590 590 590 590 7,080

Car Insurance 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 69,600

Drinking Water 450 450 450 450 255 255 255 255 255 255 255 450 4,035

Total 53,500 53,500 53,500 53,500 52,289 52,289 52,289 52,289 52,289 52,289 52,289 62,479 642,504

Table 4.18 Organization Expense year 2



Salary 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 527,040

Bonus

9,000 9,000

Office Supplies 1,000

1,000

Water Supply 528 528 528 528 264 264 264 264 264 264 264 528 4,488


Telephone 752 752 752 752 730 730 730 730 730 730 730 730 8,847

Internet 590 590 590 590 590 590 590 590 590 590 590 590 7,080

Car Insurance 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 69,600

Drinking Water 450 450 450 450 255 255 255 255 255 255 255 450 4,035

Total 54,500 53,500 53,500 53,500 52,289 52,289 52,289 52,289 52,289 52,289 52,289 62,479 643,504

98

Table 4.19 Organization Expense year 3



Salary 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 43,920 527,040

Bonus

9,000 9,000

Office Supplies 1,000

1,000

Water Supply 528 528 528 528 264 264 264 264 264 264 264 528 4,488


Telephone 752 752 752 752 730 730 730 730 730 730 730 730 8,847

Internet 590 590 590 590 590 590 590 590 590 590 590 590 7,080

Car Insurance 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 5,800 69,600

Drinking Water 450 450 450 450 255 255 255 255 255 255 255 450 4,035

Total 54,500 53,500 53,500 53,500 52,289 52,289 52,289 52,289 52,289 52,289 52,289 62,479 643,504

99

4.6 Conclusion

HedPhan Farm provides the spawn of straw mushroom bag or called

mushroom seed to straw mushroom cultivation both a cultural mushroom and mushroom

house cultivation. The product contain plastics bag size 6 ½ x 12 ½ niches weigh 500 grams

and sell at 10 baht per unit. The main spawn substantial composes of rodeo 30%, residue

soybean 30%, cotton west 30% and lotus west 10% and also adding supplement to make

good quality.

Farm located 123, Thungphaw village, Muang Kham city, Phan district Chiang Rai

province. Placed near entrance to the sides street which connect with Phathon Yothin Road

far 500 meters attractions nearby Phan hospital and far away from Phan transportation 5

kilometers.

The process need to produce under cleanness and careful to avoid the bacteria or

infect which effect for mycelium. Their products are produce under 6 processes, the process

of plugging or putting mother spawn on the bag that worker need to be careful most. Farm

also set the rule to cleaning production building every 6 month and the worker have to be

training before work. At the moment we hire only 5 workers that enough for all production

even in the future we may hire only part-time later.

In organization, there are 4 people to work in office that effort with sale and

marketing, account and operation plan. As we shipping product by door to door we need to

hire 2 divers help together to distribute product to customer. As mention, the high volume

demands are during December - April which this period the expense will be high or full

expense such as electricity, water supplies that use in production process.

For production and operating process, farm use outsource from Jongjareng company

to purchase raw material such as lotus west and cotton west which less cost and the less time

spending. However, to pick up some material especially in Chiang Rai farm use own pick-up

car. The most expense farm spends for purchase material and inventory cost.

100

Chapter 5: Financial Analysis

5.1 Income Statement

5.2 Cash Flow

5.3 Balance Sheet

5.4 Project Analysis

5.5 Conclusion

101

HedPhan Company Limited

Income Statement

For Year End December 31, 2011


SALE 677,764 522,902 368,039 235,300 80,438 80,438 80,438 80,438 80,438 80,438 80,438 810,503 3,177,570

MANUFACTURING COST

Cost of Product 394,920 283,749 205,578 161,574 62,403 60,403 83,403 60,403 60,403 83,403 62,403 433,923 1,952,564

Add: Depreciation 7,208 7,208 7,208 7,208 7,208 7,208 7,208 7,208 7,208 7,208 7,208 7,208 86,490

Total Manufacturing cost 275,637 231,945 155,254 66,518 10,827 12,827 (10,173) 12,827 12,827 (10,173) 10,827 369,372 1,138,516

ADMINISTATION EXPENSE

Marketing expense 3,660 3,660 3,660 2,960 1,960 1,960 1,960 1,960 1,960 1,960 3,210 2,960 31,870

Administration expense 53,500 53,500 53,500 53,500 52,289 52,289 52,289 52,289 52,289 52,289 52,289 62,479 642,504

Add: Depreciation 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 12,112 145,339

Total Cost of Operating 69,272 69,272 69,272 68,572 66,361 66,361 66,361 66,361 66,361 66,361 67,611 77,550 819,713

Net Operating Income 206,365 162,673 85,982 (2,054) (55,534) (53,534) (76,534) (53,534) (53,534) (76,534) (56,784) 291,822 318,803

EARNING BEFOR INCOME AND TAX

Less interest expense 22,000 21,775 21,548 21,319 21,087 20,853 20,616 20,378 20,137 19,893 19,647 19,399 248,651

Net Income before tax 184,365 140,898 64,434 (23,372) (76,620) (74,386) (97,150) (73,911) (73,670) (96,427) (76,431) 272,423 70,152

Less tax expense 55,309 42,269 19,330 - - - - - - - - 81,727 198,636

NET INCOME 129,055 98,629 45,104 (23,372) (76,620) (74,386) (97,150) (73,911) (73,670) (96,427) (76,431) 190,696 (128,484)

RETAIN EARNING 29,055 227,684 272,788 249,415 172,795 98,409 1,258 (72,653) (146,323) (242,750) (319,181) (128,484) 242,013

102


Income Statement



SALE

1,016,646

784,352

552,059

352,950

120,656

120,656

120,656

120,656

120,656

120,656

120,656

1,215,755

4,766,355

MANUFACTURING COST

Cost of Product

555,979

415,723

298,467

220,961

82,704

80,704

103,704

80,704

80,704

103,704

82,704

638,485

2,744,546

Add: Depreciation

3,683

3,683

3,683

3,683

3,683

3,683

3,683

3,683

3,683

3,683

3,683

3,683

44,200

Total Manufacturing cost

456,983

364,946

249,909

128,306

34,268

36,268

13,268

36,268

36,268

13,268

34,268

573,586

1,977,609


Marketing expense

12,960

4,460

2,960

2,960

1,960

1,960

1,960

1,960

1,960

1,960

3,210

2,960

41,270

Administration expense

54,500

53,500

53,500

53,500

52,289

52,289

52,289

52,289

52,289

52,289

52,289

62,479

643,504

Add: Depreciation

12,112

12,112

12,112

12,112

12,112

12,112

12,112

12,112

12,112

12,112

12,112

12,112

145,339

Total Cost of Operating

79,572

70,072

68,572

68,572

66,361

66,361

66,361

66,361

66,361

66,361

67,611

77,550

830,113

Net Operating Income

377,411

294,874

181,337

59,733

(32,092)

(30,092)

(53,092)

(30,092)

(30,092)

(53,092)

(33,342)

496,036

1,147,496


Less interest expense

19,148

18,894

18,638

18,380

18,119

17,855

17,589

17,320

17,048

16,774

16,497

16,217

212,479

Net Income before tax

358,263

275,979

162,698

41,353

(50,211)

(47,947)

(70,681)

(47,412)

(47,140)

(69,866)

(49,839)

479,819

935,017

Less tax expense

107,479

82,794

48,809

12,406

-

-

-

-

-

-

-

143,946

395,434

NET INCOME

250,784

193,186

113,889

28,947

(50,211)

(47,947)

(70,681)

(47,412)

(47,140)

(69,866)

(49,839)

335,874

539,583

RETAIN EARNING

122,300

315,485

429,374

458,322

408,110

360,163

289,482

242,070

194,930

125,064

75,225

411,098

3,431,623

103


Income Statement



SALE

1,355,528

1,045,803

736,078

470,600

160,875

160,875

160,875

160,875

160,875

160,875

160,875

1,621,006

6,355,140

MANUFACTURING COST

Cost of Product

727,039

547,697

391,355

280,348

103,006

101,006

124,006

101,006

101,006

124,006

103,006

843,047

3,546,529

Add: Depreciation

3,683

3,683

3,683

3,683

3,683

3,683

3,683

3,683

3,683

3,683

3,683

3,683

44,200

Total Manufacturing cost

624,805

494,422

341,040

186,569

54,186

56,186

33,186

56,186

56,186

33,186

54,186

774,276

2,764,411


Marketing expense

12,960

4,460

2,960

2,960

1,960

1,960

1,960

1,960

1,960

1,960

3,210

2,960

39,270

Administration expense

54,500

53,500

53,500

53,500

52,289

52,289

52,289

52,289

52,289

52,289

52,289

62,479

643,504

Add: Depreciation

12,112

12,112

12,112

12,112

12,112

12,112

12,112

12,112

12,112

12,112

12,112

12,112

145,339

Total Cost of Operating

79,572

70,072

68,572

68,572

66,361

66,361

66,361

66,361

66,361

66,361

67,611

77,550

830,113

Net Operating Income

545,233

424,350

272,467

117,996

(12,175)

(10,175)

(33,175)

(10,175)

(10,175)

(33,175)

(13,425)

696,726

1,934,299


Less interest expense

15,934

15,648

15,360

15,069

14,775

14,477

14,177

13,874

13,568

13,259

12,946

12,631

171,719

Net Income before tax

529,299

408,702

257,107

102,928

(26,949)

(24,652)

(47,352)

(24,049)

(23,743)

(46,434)

(26,371)

684,095

1,762,580

Less tax expense

158,790

122,611

77,132

30,878

-

-

-

-

-

-

-

205,228

594,639

NET INCOME

370,509

286,091

179,975

72,049

(26,949)

(24,652)

(47,352)

(24,049)

(23,743)

(46,434)

(26,371)

478,866

1,167,941

RETAIN EARNING

781,608

1,067,699

1,247,674

1,319,724

1,292,774

1,268,122

1,220,770

1,196,721

1,172,978

1,126,544

1,100,172

1,579,039

14,373,824

104


Statement of Cash Flow



Cash flow from operation activity

Cash received

cash received on cash sale 677,764 522,902 368,039 235,300 80,438 80,438 80,438 80,438 80,438 80,438 80,438 810,503 3,177,570

total cash received 677,764 522,902 368,039 235,300 80,438 80,438 80,438 80,438 80,438 80,438 80,438 810,503 3,177,570

Cash paid

-

cash paid for raw material (837,069) - - (211,401) - - (128,766) - - (483,777) - - (1,661,012)

cash paid for labor (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (237,600)

cash paid for overhead (33,000) - - (23,000) (2,000) - (23,000) - - (23,000) (2,000) (5,000) (111,000)

cash paid for marketing (3,660) (3,660) (3,660) (2,960) (1,960) (1,960) (1,960) (1,960) (1,960) (1,960) (3,210) (2,960) (31,870)

cash paid for

administration expense (53,500) (53,500) (53,500) (53,500) (52,289) (52,289) (52,289) (52,289) (52,289) (52,289) (52,289) (62,479) (642,504)

cash paid for income tax

(116,909)

cash paid for interest (22,000) (21,775) (21,548) (21,319) (21,087) (20,853) (20,616) (20,378) (20,137) (19,893) (19,647) (19,399) (248,651)

total cash paid (969,029) (98,736) (98,508) (331,980) (97,136) (94,902) (246,431) (94,427) (94,186) (600,719) (96,946) (109,637) (2,932,637)

Net cash flow from

operation activity (291,265) 424,166 269,531 (96,680) (16,698) (14,464) (165,994) (13,989) (13,748) (520,281) (16,509) 700,866 244,933

Cash flow from investment activity

cash paid for investment

on operation (1,687,858)

(1,687,858)

Cash flow from financing activity

Cash received

borrowing cash 2,200,000

2,200,000

Cash paid

cash paid for borrowing (22,489) (22,714) (22,941) (23,170) (23,402) (23,636) (23,872) (24,111) (24,352) (24,596) (24,842) (25,090) (285,215)

Net cash flow from

financing activity 2,177,511 (22,714) (22,941) (23,170) (23,402) (23,636) (23,872) (24,111) (24,352) (24,596) (24,842) (25,090) 1,914,785

Net increase/decrease in cash 198,388 401,452 246,590 (119,850) (40,100) (38,100) (189,866) (38,100) (38,100) (544,877) (41,350) 675,776 471,860

Beginning cash - 198,388 599,840 846,430 726,579 686,479 648,379 458,513 420,412 382,312 (162,565) (203,916) 4,600,851

Ending cash 198,388 599,840 846,430 726,579 686,479 648,379 458,513 420,412 382,312 (162,565) (203,916) 471,860 5,072,711

105






Cash received

cash received on cash sale 1,016,646 784,352 552,059 352,950 120,656 120,656 120,656 120,656 120,656 120,656 120,656 1,215,755 4,766,355

total cash received 1,016,646 784,352 552,059 352,950 120,656 120,656 120,656 120,656 120,656 120,656 120,656 1,215,755 4,766,355

Cash paid

-

cash paid for raw material (1,179,630) - - (297,915) - - (181,462) - - (730,454) - - (2,389,460)

cash paid for labor (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (19,800) (237,600)

cash paid for overhead (23,000) - - (23,000) (2,000) - (23,000) - - (23,000) (2,000) (5,000) (101,000)

cash paid for marketing (12,960) (4,460) (2,960) (2,960) (1,960) (1,960) (1,960) (1,960) (1,960) (1,960) (3,210) (2,960) (41,270) cash paid for

administration expense (54,500) (53,500) (53,500) (53,500) (52,289) (52,289) (52,289) (52,289) (52,289) (52,289) (52,289) (62,479) (643,504)


(81,727)

(251,488)

-


total cash paid (1,309,038) (96,655) (94,899) (415,555) (94,168) (91,904) (296,099) (91,369) (91,097) (844,277) (93,796) (106,455) (3,625,313)

Net cash flow from

operation activity (292,393) 687,697 457,160 (62,605) 26,488 28,752 (175,443) 29,287 29,559 (723,621) 26,861 1,109,299 1,141,042


cash paid for

borrowing (25,341) (25,594) (25,850) (26,109) (26,370) (26,634) (26,900) (27,169) (27,441) (27,715) (27,992) (28,272) (321,388)

Net cash flow from

financing activity (25,341) (25,594) (25,850) (26,109) (26,370) (26,634) (26,900) (27,169) (27,441) (27,715) (27,992) (28,272) (321,388)

Net increase/decrease in cash (317,734) 662,103 431,309 (88,714) 118 2,118 (202,343) 2,118 2,118 (751,336) (1,132) 1,081,027 819,654

Beginning cash 471,860 154,126 816,229 1,247,538 1,158,824 1,158,943 1,161,061 958,718 960,836 962,955 211,619 210,487 9,473,197

Ending cash 154,126 816,229 1,247,538 1,158,824 1,158,943 1,161,061 958,718 960,836 962,955 211,619 210,487 1,291,514 10,292,851

106






Cash received

cash received on cash sale 1,355,528 1,045,803 736,078 470,600 160,875 160,875 160,875 160,875 160,875 160,875 160,875 1,621,006 6,355,140

total cash received

1,355,528

1,045,803

736,078

470,600

160,875

160,875

160,875

160,875

160,875

160,875

160,875

1,621,006

6,355,140

Cash paid

cash paid for raw material (1,572,840)

(397,219)

(241,949)

(973,939)

(3,185,947)

cash paid for labor (19,800) (19,800) (19,800) (19,800)

(19,800)

(19,800)

(19,800)

(19,800)

(19,800)

(19,800)

(19,800)

(19,800)

(237,600)

cash paid for overhead (23,000)

(23,000) (2,000) (23,000)

(23,000) (2,000) (5,000) (101,000)

cash paid for marketing (12,960) (4,460) (2,960) (2,960) (1,960) (1,960) (1,960) (1,960) (1,960) (1,960) (3,210) (2,960) (41,270)

cash paid for

administration expense

(54,500) (53,500) (53,500) (53,500) (52,289)

(52,289) (52,289) (52,289) (52,289) (52,289)

(52,289) (62,479) (643,504)


(143,942)

(3,878)


total cash paid

(1,699,035)

(93,409)

(91,620)

(511,549)

(90,824)

(88,526)

(353,175)

(87,923)

(87,617)

(1,084,247)

(90,245)

(102,870)

(4,381,039)

Net cash flow from

operation activity

(343,507)

952,394

644,458

(40,949)

70,051

72,349

(192,300)

72,952

73,258

(923,372)

70,630

1,518,136

1,974,101


Cash paid

cash paid for borrowing

(28,555) (28,840) (29,129) (29,420) (29,714)

(30,012)

(30,312)

(30,615)

(30,921)

(31,230)

(31,542)

(31,858)

(362,148)

Net cash flow from

financing activity

(28,555)

(28,840)

(29,129)

(29,420)

(29,714)

(30,012)

(30,312)

(30,615)

(30,921)

(31,230)

(31,542)

(31,858)

(362,148)

Net increase/decrease in cash

(372,062)

923,554

615,329

(70,369)

40,337

42,337

(222,612)

42,337

42,337

(954,602)

39,087

1,486,279

1,611,953

Beginning cash 1,291,514 919,453 1,843,006 2,458,335 2,387,966 2,428,303 2,470,640 2,248,029 2,290,366 2,332,703 1,378,101 1,417,188 23,465,604

Ending cash 919,453 1,843,006 2,458,335 2,387,966 2,428,303 2,470,640 2,248,029 2,290,366 2,332,703 1,378,101 1,417,188 2,903,467 25,077,556

107


Statement of Balance Sheet



ASSET

Current asset

Cash 198,388 599,840 846,430 726,579 686,479 648,379 458,513 420,412 382,312 (162,565) (203,916) 471,860

Material Inventory 494,949 231,000 45,223 137,850 97,247 56,644 144,806 104,203 63,600 506,774 466,171 57,048

Total current asset 693,337 830,840 891,652 864,429 783,726 705,022 603,319 524,615 445,912 344,209 262,255 528,907

Non Current Assets

Property and Equipment

Land & Building 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550

Machinery and Equipment 915,308 915,308 915,308 915,308 915,308 915,308 915,308 915,308 915,308 915,308 915,308 915,308

Total Property and Equipment 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858 1,687,858

Less: Accumulated Depreciation (19,319) (38,638) (57,957) (77,276) (96,596) (115,915) (135,234) (154,553) (173,872) (193,191) (212,510) (231,829)

Total Non Current Assets 1,668,539 1,649,220 1,629,901 1,610,582 1,591,262 1,571,943 1,552,624 1,533,305 1,513,986 1,494,667 1,475,348 1,456,029

Total Assets 2,361,876 2,480,060 2,521,553 2,475,011 2,374,988 2,276,966 2,155,943 2,057,920 1,959,898 1,838,875 1,737,603 1,984,936

LIABILITY AND EQUITY

LIABILITY

Current Liability

Taxes Payable 55,309 97,579 116,909 116,909 116,909 116,909 116,909 116,909 116,909 116,909 116,909 198,636

Total Current Liability 55,309 97,579 116,909 116,909 116,909 116,909 116,909 116,909 116,909 116,909 116,909 198,636

Non Current Liability

Long-Term Borrowing 2,177,511 2,154,797 2,131,856 2,108,686 2,085,284 2,061,648 2,037,776 2,013,664 1,989,312 1,964,716 1,939,875 1,914,785

Total Long-Term Liability 2,177,511 2,154,797 2,131,856 2,108,686 2,085,284 2,061,648 2,037,776 2,013,664 1,989,312 1,964,716 1,939,875 1,914,785

Total Liability 2,232,821 2,252,376 2,248,765 2,225,595 2,202,193 2,178,557 2,154,685 2,130,573 2,106,221 2,081,625 2,056,784 2,113,420

EQUITY

Retains Earning 129,055 227,684 272,788 249,415 172,795 98,409 1,258 (72,653) (146,323) (242,750) (319,181) (128,484)

Total Equity 129,055 227,684 272,788 249,415 172,795 98,409 1,258 (72,653) (146,323) (242,750) (319,181) (128,484)

Total Liabilities & Equity 2,361,876 2,480,060 2,521,553 2,475,011 2,374,988 2,276,966 2,155,943 2,057,920 1,959,898 1,838,875 1,737,603 1,984,936

108





ASSET Current asset Cash 154,126 816,229 1,247,538 1,158,824 1,158,943 1,161,061 958,718 960,836 962,955 211,619 210,487 1,291,514


Total current asset

877,624

1,143,804

1,296,447

1,327,487

1,266,700

1,207,914

1,126,128

1,067,342

1,008,556

926,770

864,734

1,332,076

Non Current Assets Property and Equipment

Land & Building 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550





Total Assets

2,317,858

2,568,243

2,705,091

2,720,336

2,643,754

2,569,173

2,471,592

2,397,011

2,322,430

2,224,849

2,147,018

2,598,565


LIABILITY Current Liability Taxes Payable 306,115 388,909 437,718 450,124 450,124 450,124 450,124 450,124 450,124 450,124 450,124 594,070

Total Current Liability

306,115

388,909

437,718

450,124

450,124

450,124

450,124

450,124

450,124

450,124

450,124

594,070

Non Current Liability Long-Term Borrowing 1,889,443 1,863,849 1,837,999 1,811,890 1,785,520 1,758,886 1,731,986 1,704,817 1,677,376 1,649,661 1,621,669 1,593,397


Total Liability

2,195,558

2,252,758

2,275,717

2,262,014

2,235,644

2,209,010

2,182,110

2,154,941

2,127,500

2,099,785

2,071,793

2,187,467

EQUITY Retains Earning 122,300 315,485 429,374 458,322 408,110 360,163 289,482 242,070 194,930 125,064 75,225 411,098

Total Equity 122,300 315,485 429,374 458,322 408,110 360,163 289,482 242,070 194,930 125,064 75,225 411,098


109





ASSET Current asset Cash 919,453 1,843,006 2,458,335 2,387,966 2,428,303 2,470,640 2,248,029 2,290,366 2,332,703 1,378,101 1,417,188 2,903,467


Total current asset 1,848,615 2,244,271 2,488,045 2,577,347 2,536,478 2,497,609 2,435,740 2,396,872 2,358,003 2,296,134 2,254,015 2,922,047

Non Current Assets Property and Equipment

Land & Building 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550 772,550





Total Assets 3,099,309 3,479,171 3,707,149 3,780,657 3,723,993 3,669,329 3,591,665 3,537,001 3,482,337 3,404,674 3,346,760 3,998,997


LIABILITY Current Liability Taxes Payable 752,860 875,470 952,603 983,481 983,481 983,481 983,481 983,481 983,481 983,481 983,481 1,188,709

Total Current Liability 752,860 875,470 952,603 983,481 983,481 983,481 983,481 983,481 983,481 983,481 983,481 1,188,709

Non Current Liability

Long-Term Borrowing 1,564,842 1,536,001 1,506,872 1,477,452 1,447,738 1,417,726 1,387,415 1,356,800 1,325,879 1,294,649 1,263,106 1,231,249


Total Liability 2,317,701 2,411,472 2,459,475 2,460,933 2,431,219 2,401,207 2,370,895 2,340,281 2,309,360 2,278,130 2,246,587 2,419,958

EQUITY Retains Earning 781,608 1,067,699 1,247,674 1,319,724 1,292,774 1,268,122 1,220,770 1,196,721 1,172,978 1,126,544 1,100,172 1,579,039

Total Equity 781,608 1,067,699 1,247,674 1,319,724 1,292,774 1,268,122 1,220,770 1,196,721 1,172,978 1,126,544 1,100,172 1,579,039


110

5.5 Conclusion

Income statement of HedPhan Company referred as profit and loss from selling

and operation process with 3 year estimate. The money received from the sale of spawn

straw mushroom bag at 10 baht per unit or called revenue estimate from mushroom grower

spending spawn mushroom. The net income after all revenues and expensed have been

accounted for thought out the year most get profit during season period (December-April)

and get lost in May until November because the number of mushroom house grower is a

few. However, all the year the company still gets profit after deducts cost of goods sold

expense charged against these revenue. We expect profit increase 5 percent per year.

Therefore company loss and profit in there around -128,484, 539,583, and 1,167,941 baht

reparably

Cash flow of HedPhan Company refers to the movement of cash into or out of a

business, a project, or a financial product.

Balance sheet of HedPhan company refer a summary of the financial balances of a

assets, liabilities and ownership equity. At the beginning company borrow money as

2,200,000 baht with 12% of interest rate in 5 year term.

111

Chapter 7: summary

Summary

112

Chapter 7: summary

At moment, some straw mushroom cultivation brings them more money than rice

which straw mushroom cultivation takes just 7-15 days to bring money to them. And

earning return around 50-60% profit that is enough for farmers to continue growing.

Straw mushroom is the most popularly grown in Thailand because Thailand has

ideal environmental conditions for straw mushroom cultivation (30-38 C) and a long

history of mushroom growing since 1940s by farmer. Thai people know that straw

mushroom growing required low cost materials and technologies while offering a high and

quick return on their money, unlike other mushrooms. In addition, straw mushroom

cultivation can use available materials readily to grow.

All region of Thailand can grow straw mushroom which almost at North and

Northeast region. Especially in Chiang Rai, there are 45.45 percent of farmers almost

grow straw mushroom after rice harvested season because they already have their hay

(material to grow straw mushroom) and the return money is also high. (According

Department of Chiang Rai plant research 2009). According Department of Chiang Rai

Rice Research Center, 2010 reordered that Chiang Rai has 110,628 farmer in year 2009

and having 1.3 -1.4 million hectares per year.

Moreover, the farmer can’t produce their own spawn of straw mushroom. They

need to buy from supplier or some middleman or wholesaler who distribute in area.

Mushroom grower in Chiang Rai get spawn mushroom from Bhandoo and almost outside

Chiang Rai such as Payao Lumpang agencies.

According competitor analysis that there is only one supplier of spawn straw

mushroom bag in Chiang Rai name Bhandoo Farm which they sell since 20 years.

Nowadays, many spawn mushroom seller such as Lumpang agencies drive market in

Chiang Rai almost mushroom grower satisfy with their quality product. However farmer

usually grows straw mushroom every year after rice harvested. Also at moment there are

3,750 mushroom houses cultivation in Chiang Rai that grows mushroom thought out the

year (Department of Chiang Rai Plant Research 2009). The total market size both

mushroom house and after rice harvested cultivation has show table next page.

113

Spawn Mushroom Bag Market Size

Customer Target Market Size

Cultural mushroom grower 2,212,320

Mushroom house 965,250

Total 3,177,570

The market size in this table is calculate from customer behavior which almost use

spawn mushroom bag. The product characteristic that we would like to sell is the spawn of

straw mushroom bag weigh 500 grimes. The main substantial is made from rodeo, lotus

and cotton west and resident soybean. We will sell at same price as distributor in Chiang

Rai as 10 baht per bag. We construct the project under name HedPhan Farm to sell in it in

Chiang Rai and expect loan money as 2,200,000 baht.

In sale forecast, our company forecast the revenue and expense from number of

straw mushroom behavior in three year which it relates with seasoning of rice harvest

season. The marketing communication mixed and quality control of product will run to

attract customers to buy our product and hold on and the objective to maintain customer

base and distribute product area. We forecast sale estimate in three years, the accumulate

sale is approximate 14,299,070 baht in five years. We think first two years our product

could not sale as much as we expect to get market size as 15 percent and set objective to

increase market size 5 percent per year with 3 year.

The significant to maintain existing customer base is the quality product that for

sure mushroom grower want spawn mushroom that can produce more mushroom or high

productivity (good fiber mushroom and spread overall bag). So, we have to control

production process to control quality of product almost.

114

REFERENCE

Straw Mushroom Cultivation. [date 15 Arial 2010]

<http://www.vcharkarn.com/vblog/38061/4>

Kasetporpeang. [date 18 Arial 2010]

<http://www.kasetporpeang.com/>

Thai Biotech. [date 19 April 2010]

<http://www.ifarm.in.th/index.php?>

Department of Agricultural. [date 15 Arial 2010]

<http://it.doa.go.th/refs/index.php>

Department of Land Chiang Rai. [date 16 Arial 2010]

<www.dol.go.th/>

Corporate promote Department. [date 16 Arial 2010]

<http://www.cpd.go.th/cpd/cpdinter/index.html>

Small and Medium Community Enterprise [date 11 Arial 2010]

<http://smce.doae.go.th/ProductCategory/smce_report.php>

Chiang Rai community Radio [ FM 95.75 MHz/AM 1260 KHz]

http://www.chiangrai.prdnorth.in.th/

Documents

Project Feasibility Study and Evaluation-Hedphan Farm. Aj Chaiyawat Thongintr