MUSHROOM CULTIVATION AT TAR COLLEGE CASE STUDY

JOHORE BRANCH CAMPUS

This case was prepared by Low Kock Hee, Senior Lecturer

School of Business Studies

TAR COLLEGE

This case study was written for the purpose of class discussion. The case was neither designed nor meant

to illustrate the correct or incorrect management of the problems or issues contained in the case.

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ACKNOWLEDGEMENTS

The author of this case study thanks Mr. Liaw Fenn Yenn, Head, TAR College, Johore Branch

and the campus staff Miss Chong Chew Lan, SBS PS, Miss Uma Devi, SBS Lecturer and Miss

Tong SL, CPE AR for their input of valuable information and materials relating to the

Mushroom Cultivation Project.

Also many thanks to Mr. Lim Chin Hock, Principal Lecturer, SBS, for the guidance in this case

study write-up. And thanks to the SBS academic staffs who were involved in this case study for

the review and comments.

The author acknowledged that the other materials presented in this case were adaptations from

published sources and were cited in the reference list.

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CONTENTS

Acknowledgements 2

Introduction 4

What are Mushrooms? 4

Mushrooms Grown or Can Be Grown in Malaysia 4

Marketing Information on Mushroom 5

Top-Ten Mushroom Producing Countries (2008) 5

College Dropout Now a Mushroom King 5

The Future 5

Oyster Mushroom Cultivation Johore Campus 6

Starting Capital Cost for the Mushroom Cultivation House 6

Operation Cost for the Mushroom Cultivation House 7-8

Mushroom Cultivation Flow Chart 9-10

Direct Costs of Mushroom Cultivation Per Substrate Bag 10

Shelve Life of Fresh Oyster Mushroom 10

Oyster Mushroom Harvested Yield and Sales in RM 10

Pest Management 11

Common Diseases 11

Future Plans 11

Discuss Questions 11

References 12

Glossary 13-14

Appendixes 15

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Introduction

The Diploma in Entrepreneurship was first offered at the Johore Branch campus in May 2010.

Under the inspiration of TARC Principal, Dr. Tan Chik Heok, Johore Branch Campus was asked

to set up a mushroom growing workshop for students to acquire knowledge and techniques in

mushroom cultivation. This practical experience at the college workshop will give the students a

head start in their careers. The project was first started since November 2011.

What are Mushrooms?

Mushrooms are fungi that have macro fruiting bodies visible to naked eyes. There are 14,000

known species and 2000 species are considered safe to eat. Mushrooms can be grouped as high

protein traditional vegetable/food as well as medical efficacy. The cultivation technologies

available range from conventional sawdust logs to high technology methods where the

environment for the mushroom’s growth is highly regulated to ensure the production of quality

mushrooms.

Mushroom has been cultivated in Malaysia since the early 1970s and the dominant variety is the

grey oyster. Mushrooms have now been declared as industrial crop by the Ministry of

Agriculture due to its potential contribution to the economy of the country. Malaysia imported

21,077 MT of mushrooms worth RM86.44 million in 2007 while export stood at 4,805 MT

worth RM33.45 million. The following were statistics provided by the Mushroom Association of

Malaysia:

Number of mushroom growers in Malaysia (2008) 400 growers

Production 24,000kg per day

Consumer demand 50,000kg per day

Mushrooms Grown or Can Be Grown in Malaysia

Grey oyster/tiram kelabu

White oyster/tiram putih

Pink oyster/tiram jambu muda

Yellow oster/tiram kuning

Abalone

Black jelly/jeli hitam

Monkey head/bunga kubis

Kukur or sisik

Perut lembu

Lingzhi (medicinal mushroom)

White and brown button

Black poplar or chestnut mushroom

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Marketing Information on Mushrooms

Types of mushrooms/products available in the market: Fresh / Dried / Processed /

Nutraceutical, functional food, finger food and health drinks.

Mushroom is a very good source of protein food suitable for all age groups.

Malaysian mushroom consumption is 324 grams per person per year compared to 2.5kg

chicken consumption per person per year (DOA and MAM 2005).

DOA targets to increase consumption to 2 kg per person per year. This will spur an increase

in production from 5,500 to 50,000 tonnes per year.

The Top-Ten Mushrooms Producing Countries (2008)

Exhibit 1

Country Output in tons Percentage of total world output

China 1,608,219 45.89

United States 363,560 10.40

Netherlands 240,000 6.86

Poland 180,000 5.15

France 150,450 4.30

Spain 131,974 3.77

Italy 100,000 2.86

Canada 86,946 2.49

Ireland 75,000 2.14

Japan 67,000 1.92

Others 494,141 14.13

World 3,497,290 100.00

College Dropout Now a Mushroom King

The Star reported “From college dropout to mushroom millionaire – that sums up the success

story of a village boy from Kampung Grisek.” Mr. Chew Swee King through his C&C

Mushroom Cultivation Company cultivates several different oyster mushrooms, abalones and the

popular Lingzhi mushrooms. Chew said that there were about 400 mushroom growers in the

country producing about RM30 million worth of mushrooms a month, and one-third came from

C&C. “At present we export about 30% of our fresh mushrooms to Singapore and processed

mushroom products to India, Hong Kong, Brunei, Indonesia and Canada. The company also

supplies mushroom snacks to Singapore Cold Storage and NTUC and the Giant hypermarket

chain.

The Future

According to the Malaysian Mushroom Research Association, the future for mushroom growing

in Malaysia is very bright because the country has a number of competitive advantages. There

are readily available and cheap agro industrial lignocellulosic substrates from industries such as

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palm oil, sago starch, rubber wood and rice that can be used as substrates for mushroom

growing. The favourable environmental conditions enable the cultivation of a number of

varieties including temperate species such as monkey head mushroom (Hericium erinaceus).

Black poplar/chestnut mushrooms (Agrocybe sp) and shitake (Lentinula edodes) throughout the

year.

Oyster Mushroom Cultivation Johore Campus

Johore Campus selected the oyster mushroom cultivation because it is easier to grow than many

other species as advised by Mr. Chew Swee King, the founder of C & C Mushroom Cultivation

Sdn. Bhd. Based on the expert advise, Johore campus proceeded to build the Mushroom

Cultivation House with the following items and facilities:

Starting Capital Cost for the Mushroom Cultivation House

Exhibit 2

No Items Qty Cost

1 RC slab with drain crossing slab for the rear

entrance

L/s RM2,480.00

2 Installation of the iron grille sliding doors 2 nos RM1,300.00

3 Installation of the wooden racks 27 sets RM12,960.00

4 1 HP air-conditioner for the Inoculation Room

c/w wiring point

1 no RM2,150.00

5 Mild steel pallet trolley c/w steel wheels 2 nos RM640.00

6 Mild steel mushroom cages 6 nos RM348.00

7 Aluminium rectangular table

Size: 24” W x 48” L x 30” H

1 no RM580.00

8 Clear glass aquarium for inoculation

Size: 24” W x 48” L x 24” H

1 no RM500.00

9 Stainless steel automatic gas steamer 1 no RM2,500.00

10 Gas regulator, hose and gas cylinder deposit 1 set RM95.20

11 Black netting (90%) 1 roll RM110.00

12 Wooden spin for black netting installation L/s RM144.00

13 Electronic digital valve for watering system 1 no RM380.00

14 16mm PE tubing/Poly pipe and fitting L/s RM102.00

15 Rubber hose 1 no RM48.00

16 12” impulse sealer 1 no RM65.00

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17 Hand pallet truck/ trolley 1 no RM120.00

18 Purchase of the new and incubated substrate bags 15,810

bags

RM9,793.20

19 Grey oyster mushroom flat caps 12,000 pcs RM636.00

20 240 liter wheel bin 1 no RM230.00

21 Signage L/s RM390.00

22 Scales 2 nos RM280.00

23 2 doors display chiller 1 no RM2,600.00

24 3M x 3M foldable canopy 1 no RM165.00

25 Plastic tray (medium) 10 nos RM70.00

26 Plastic tray (large) 5 nos RM40.00

27 Water scrapper 4 nos RM36.00

28 Plastic pail 5 nos RM20.00

29 Rechargeable head lamp 2 nos RM30.00

30 Stool 6 pcs RM36.00

31 Plastic bucket c/w lid (large) 2 pcs RM100.00

32 Hoe c/w handle 1 no RM19.00

33 Sand scoop c/w steel handle (shovel) 1 no RM15.00

34 Stainless steel table – 5’ x 3 ½’ 2 nos From Karak

35 Stainless steel table c/w sink bowl – 7’ x 2’ 6” 1 no From Karak

36 Moisture and Temperature Meter 1 no Donated

TOTAL COST RM38,982.40

Operation Cost for the Mushroom Cultivation House

Exhibit 3

No Items Qty Cost

1 Super lime -25 kg

(from C & C Mushroom Cultivation Farm Sdn. Bhd.,

October 2011)

5 pkts RM90.00

2 Hairnet (October 2011) 3 bags RM34.50

3 Poly disposable glove (October 2011) 3 boxes RM15.00

4 Surgical face mask (October 2011) 5 boxes RM60.00

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5 Clorox (October 2011) 4 btls RM10.00

6 Latex gloves (October 2011) 5 boxes RM 90.00

7 Good morning towel (October 2011) 1 doz RM 28.00

8 Ridsect (October 2011) 1 no RM 9.00

9 Garbage bag (November 2011) 10 pkts RM45.00

10 9 x 14 poly bags (clear) (November 2011) 3 pkts RM 9.00

11 Rubber gloves (November 2011) 3 pairs RM 9.00

12 508 x 584 plastic bag (red) (November 2011) 5 pkts RM 17.50

13 Disposable glove (December 2011) 5 boxes RM 20.00

14 12” sealer cotton c/w element (December 2011) 4 sets RM 40.00

15 PP bag 14 x 9 (December 2011) 10 kg RM 90.00

16 PP bag 14 x 9 (January 2012) 10 kg RM 90.00

17 Rubber boot (January 2012) 5 pairs RM 110.00

18 Clorox –Large (January 2012) 4 btls RM 10.00

19 Clorox –Small (January 2012) 3 btls RM 4.80

20 508 x 584 plastic bag (red) (February 2012) 5 pkts RM17.50

21 Disposable glove (February 2012) 5 boxes RM20.00

22 Latex gloves (February 2012) 5 boxes RM90.00

23 Garbage bag (February 2012) 10 pkts RM45.00

TOTAL COST RM954.30

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Mushroom Cultivation Simplified Flow Chart

Exhibit 4

Exhibit 4 shows a simplified mushroom cultivation flow chart. The mushroom cultivation room

was furnished with the materials described in Exhibits 2 and 3. The following explains the

mushroom cultivation process:

The substrate (saw dust) used was supplied by C&C Mushroom Cultivation Sdn. Bhd. This

was where the mycelium grows.

The stainless steel automatic gas steamer was used to pasteurize the substrates for 6 hours.

This pasteurization was applied to the substrates to destroy unwanted organisms but kept the

favourable ones alive.

The new substrate bags went through the sterilization where all micro-organisms present

were destroyed completely. Spawn substrate always has to be sterilized prior to inoculation.

Inoculation/Spawning was carried out using the same transfer chamber or the same

inoculation room as was used in spawn preparation. Sawdust spawn was used to inoculate the

substrate in bags. The spawn was broken with an aseptic needle. A piece of the spawn may

Selection of Substrate

Supplied by C&C Mushroom

Heat treatments

Spawning pasteurised substrate

Spawning sterilised bags

Spawn run

Fruiting/cropping

Harvesting

Packing

Marketing & Sales Distribution

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then be transferred, using a long flat-spooned needle especially designed to scoop the spawn.

One bottle of sawdust spawn in a 500 ml bottle was sufficient to inoculate 40 to 50 bags.

The substrates were then stacked in the 27 racks housed in the cultivation room.

Spawn run was the period of vegetative growth of the mycelium throughout the substrate

after spawning.

The spawned compost bags are kept in a dark room until the mycelium had fully penetrated

to the bottom of the substrate. The bags were kept for a week before they were opened to

check that the mycelium was mature enough to fruit. The bags were opened, to initiate

fruiting, inside the mushroom cultivation room.

Fruiting requires good ventilation , light moisture and humidity. To provide moisture, daily

watering of the substrates were done. If the temperature in the mushroom cultivation rises to

more than 30 degrees C, a light water mist should be used to lower the temperature and

hasten fruiting.

Approximately 3 to 4 days after opening the bags, mushroom will begin to form and mature

mushrooms would be ready for harvesting in the following 2 to 3 days.

To harvest the mushrooms, they were grasped by the stalk and gently twisted and pulled. The

fresh mushroom should be kept in a cool place or in a chill refrigerator and will remain fresh

for up to 3 to 6 days.

After harvesting from the top end of the bag, the harvested surface may be scraped lightly to

expose a new surface for fruiting. As long as the substrate appears white, mushrooms will

continue to form under adequate environmental conditions. Approximately, each substrate

bag will fruit 6 to 7 times. When it appears colourless and soft, it is time to remove the spent

substrate from the cultivation house.

The harvested mushrooms were then packed in plastic bags.

At present the sales and distribution was conducted through the Johore branch staff.

Direct Costs of Mushroom Cultivation Materials Per Substrate Bag

Substrate Bag (including spawn, ring and cultivation cap) $0.62

Fixed monthly labour costs (RM1,000 x 2 labourers) = RM2,000

Shelve Life of Fresh Oyster Mushroom

The shelve life for fresh oyster mushroom is about 3 to 6 days.

Oyster Mushroom Harvested Yield and Sales in RM

The first production cycle yielded 800 kg of oyster mushroom with a total sales value of RM

5,000.

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Pest Management

The main pest management of mushroom crops are flies and cockroaches. Having the black

netting to cover flies from entering the mushroom cultivation house and kill cockroaches are the

normal practice for pest management.

Diseases

The major problem encountered were diseases with green, black and orange virus. Action taken

was to remove the substrate bags found with these diseases immediately. Approximately 6 to 7

percent of the substrate bags had to be removed due to diseases.

Future Plans

Johore branch intends to build a green house equipped with aquaponics and hydroponics

systems. Fruits and vegetables farming using these systems are potential for our students to

initiate their potential entrepreneurial skill.

Discussion Questions

1. Analyse and discuss the risks and opportunities of growing oyster mushroom commercially.

2. Identify the greatest challenge a potential entrepreneur will confront when deciding to

embark on growing mushrooms.

3. Prepare and discuss the profit and loss that can arise from undertaking the oyster cultivation

based on the investments stated in the case for Johore branch.

4. Determine the break-even revenue and the time you will need to recapture the investments.

5. If you wish to be an entrepreneur for mushroom cultivation. Suggest what you should do

before investing this venture.

6. Fresh oyster mushrooms shelf life is very short and highly perishable. Propose how you

would go about in managing excess fresh stocks harvested during a glut.

7. Conduct a SWOT analysis of C&C Mushroom Cultivation Farm Sdn. Bhd. What future

strategies should be taken by the company to remain as a exporter and leader in Malaysia.

8. Describe the method used to calculate the oyster mushroom yield.

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REFERENCES

Barney L. Danny. (Undated). Growing Mushroom Commercially – Risks and Opportunities. www.cals.uidaho.edu/edComm/pdf/cis/cis1077.pdf

Mushroom Association of Malaysia. 2012. Mushroom Industry.

www.mmra.org.my/industry.htm.

MushWorld. 2004. Illustrated Guide To Oyster Mushroom Cultivation, Mushroom Grower’s

Handbook. www.fungifun.org/.../Oyster-Mushroom-Cultivation/mushroom-gro..

National Bank For Agriculture And Rural Development. 2012. Oyster Mushroom.

http://nabard.org/modelbankprojects/plant_oyster.asp.

Pathmashini, L., Arulnandhy V. & Wijeratnam R. S. Wilson. 2008. Cultivation of Oyster

Mushroom (Pleurotus Ostreatus) On Sawdust. Ceylon Journal Science (Bio Science) 37

(2): 177-182.

Pennysylvania State University. 2003. Cultivation of Oyster Mushroom. College of

Agricultural Sciences Agricultural Research and Cooperative Extension, The

Pennsylvania State Universoty, 201 Willard Building, University Park, PA 16802-2801.

The Star Online. 2007. College dropout now a mushroom king.

http://thestar.com.my/news/story.asp

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GLOSSARY

Fruiting The mycelium will form mushrooms in its reproductive stage. This

is called fruiting as the mushrooms are actually the fruiting bodies

of the mycelium.

Incubation The period after inoculation during which the mycelium slowly

grow through the substrate.

Inoculation Transferring an organism into a specific substrate.

(Mother) culture A pure strain of an edible fungus growing on a medium.

Mother spawn Spawn not meant for inoculating substrate, but for inoculating

another batch of spawn.

Mycelium The network of hyphae that form the vegetative body of the

fungus. Mushrooms are the fruiting bodies of the mycelium.

Parasite Organism that lives at the expense of others, usually causing

diseases in its hosts. Ultimately it may cause the death of its host.

Pasteurisation Hear treatment applied to a substrate to destroy unwanted

organisms but keeping favourable ones alive. The temperature

range is 60-80○C. The treatment is very different from

sterilization, which aims at destroying all organisms in the

substrate.

Ph A measure to describe acidity of a medium. Ph 7 is neutral; a

higher figure means alkaline, lower acidic. Most wood-inhabiting

mushrooms prefer a slightly acidic substrate.

Primordium The initial fruiting body.

Relative humidity The percentage of moisture in the air compared to the maximal

amount that the air can hold at that temperature and pressure.

Spawn Mycelium growing on a substrate used as planting material in

mushroom cultivation.

Spawn run The period of vegetative growth of the mycelium throughout the

substrate after spawning.

Spent substrate The substrate remaining after the mushrooms have been harvested.

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Spores The means of reproduction in fungi. In cultivated mushrooms they

are formed on the gills and dispersed in the air. One mushroom can

produce millions of spores.

Stipe Stalk of the mushroom.

Substrate The material in which the mycelium grows.