Detailed analysis of various business sectors in Uganda

How do you mushroom your way to wealth?

Outside Looking in
D E Wasake

About the writer:

For over 8 years I have worked with several clients in Uganda, The Bahamas and the United Kingdom in providing audit, tax, accounting and advisory services. My sector experience with clients in various sectors including agriculture enables me have good understanding of this sector. To see the full depth of my experience, please see my profile

Article summary

With low start up capital of about Shs. 4m, little land requirement and a quick growth period (can be as quick as 3 weeks) mushrooms can give a profit of about Shs. 19m which represents a Return on Investment (ROI) of about 3 months. This article provides our views on how the investor can apply advanced techniques to start out in this sector.

First a [tongue in cheek] disclaimer: This article is not about “Magic Mushrooms” or “Shrooms”, which are sometimes used for recreational purposes due to their psychedelic effect. For those, you can find out more from Eminem’s “My Fault” or at Wikipedia here

Foreword

‘In just 90 days, I was able to get over 50 million shillings from the 7,000 stems of oyster mushrooms I grew, each stem produces an average of 1.5kg of mushrooms in the 90 day period, a kilo of mushrooms ranges between Shs. 5000- 8000.’

These are the words of 27 year old Kiddu Abel of Lusaka, Makindye who we spoke to about his mushroom growing venture. He is right. Mushrooms do grow quick, the complete cycle is on average 15 weeks (about 4 months) but with modern technology this can be reduced.

As you might know, there are two types of mushroom, the “poisonous” ones like Shrooms and the edible type, the focus of this article. Mr Kiddu grows the edible type and not the magic ones.

Well now that we “cleared the air” I can tell you why this is a good venture, but first:

Quick and Fun facts about Mushrooms
  • Mushrooms develop and strengthen the immune system of humans. They are rich in protein value (19-35%) even more than milk and contain all the nine essential amino acids. They are also low on calories but contain other nutrients like fat, phosphorous and iron thiamine among others. In fact a Food and Agriculture Organization (FAO) 2010 Uganda report mentions that mushrooms are increasingly being considered as a substitute for meat. This is particularly key in Uganda where owing to a large population below the poverty line, the inexpensive option of mushrooms could greatly improve health and reduce food insecurity.
  • Mushrooms are neither plants nor animals; they are classified in a separate category of fungi.
  • Mushrooms are just like humans; they inhale oxygen and release carbon dioxide;
  • Early Romans refered to mushrooms as “food of the gods.”
Why grow mushrooms in Uganda?

While China is the largest producer and consumer of mushrooms worldwide (about 70%) and Africa only 2% of the total mushroom production, this is changing increasingly. In particular for Uganda. There is the increasing drive for healthy living (Mushroom soup, anyone?). Further more mushrooms have various medicinal and health related benefits and these include;

  • Penicillin and streptomycin are made from mushrooms, these are potent antibiotics.
  • They are used as dietary supplements for various physiological disorders, enhance and build body tissues.
  • And to the environment, the mushroom mycelium is used to combat pollution through a chemical decomposition process.

So with the above in mind, how do you set about to make money to “feed the gods” of Kampala and the surrounding areas?

FIRST THE CONS

Market.

Whilst mushrooms are technically not vegetables, they are often classified as such and owing to a low level of disposable income, they are often not considered a necessity by Ugandans and therefore market is often limited to supermarkets and a few markets. The East African and International markets as per a few other research reports we have viewed appear to indicate that exports from Uganda would not be competitive when compared to other countries.

I however believe that the demand still outstrips the supply and with an increasing middle class, it is expected that demand for mushrooms will continue. A starting point to effectively connect to the worldwide market network of mushroom buyers and sellers is www.21food.com

Perish ability

Mushrooms are highly perishable and need to be consumed fast or properly preserved immediately after harvest; either through drying them or freezing.

For the advanced thinking farmer, we recommend that you preserve them by drying them using a tunnel dryer. A tunnel dryer is estimated per a Uganda Investment Authority article on the subject to cost $250 which at September 2012’s exchange rate is about Shs 632,000. I however expect that to be the non commercial type. A similar non commercialtype is found at Amazon, and it costsGBP 359, which is about Shs 1.5m and that is perhaps a good starting point. For the commercial operation however, a commercial dryer or dehydrator such as excalibur brand is in the range of $6,500. Of course there is a possibility that the innovators of Katwe near Kampala can make a local tunnel dryer.

An alternative to drying is to have refrigeration facilities to keep them fresh as some consumers including export markets prefer fresh to dried mushrooms.

Water. Mushrooms need constant supply of water and a moist dimly lit environment to grow favorably. We therefore recommend having an underground water tank to ensure constant supply of water.

Edible types. Identifying and consuming only the edible types is a challenge, poisonous type’s with harmful toxins are the most common and can easily be mistaken for edible ones, but they can be identified by their bright colors. We would recommend that you contact an experienced grower or say African Mushroom Growers (u) ltd to help you identify the commercial and edible type of mushrooms. The most common types in Uganda would be the oyster and the button mushrooms.

Disease. The most common cause of diseases affecting mushrooms is due to the humid conditions within which they are grown. This humid environment is also conducive for various pathogens and pests. A major mushroom disease is ‘wet bulb’ caused by the Mycogone perniciosa mould. If casing soil is not pasteurised, this infection occurs rapidly and can infect the entire growing room, which then has to be cooked out to eliminate the mould. Another disease is Green mold. Maximum hygiene is recommended in both instances to minimise disease. You can find out more about diseases affecting mushrooms and how to manage them here

AND NOW THE PROS

Little Space. Growing mushrooms doesn’t need a lot of land or space; activities can be done in limited space but still yield a lot. It is particularly excellent that this is one of those ventures that suit even a Kampala suburb dweller. From anywhere in your back yard to your front lawn, on tree barks, on walls, to the smallest size area, mushrooms don’t require a lot of space to grow.

Short cultivation period.

In general it takes on average 3 weeks to the first harvest of mushrooms. If however growing them indoors using advanced technology, they take a very short time to grow and be ready for cultivation between 1-14 days maximum depending on the type. Oyster and Oak mushrooms for instance take 1-4 days only to mature.

Little use of fertilizer.They don’t require additives such as fertilizer or insecticide to enhance growth or fight diseases.

Simple process. Mushroom growing is simple and doesn’t require a lot of expertise and intensive care. The art of mushroom growing can be mastered quickly and easily as compared to other agricultural products or plants. To know some more basics about growing mushrooms, please visit http://mushroominfo.com/growing-mushrooms/six-steps-to-mushroom-farming/ Or alternatively see the initial Wikipedia article here:http://en.wikipedia.org/wiki/Fungiculture

A word of caution, despite the ease of learning, it is worth visiting a farmer in Uganda to obtain first hand training. You can try Kabale which owing to its cooler climate is renown for mushroom growing and as per this article, even has amodern commercial mushroom facility. Alternatively you can visit Nabalayo in Banda slum.

We however recommend taking a leaf from our “advanced thinking” contact and set out some further information on advanced technology to grow mushrooms from his perspective as set out further below in this article.

Profitability and return on investment.

And so what do the numbers for this investment look like? We set them out below:

Profitability analysis of Mushroom growing

P.S Clicking the above link will take you to the Inachee Databank where the full version of this document can be dowloaded after you register. 

From the above link, using our model, we estimate the Return on Investment for this sector is as follows:

  • Start up capital (A): Shs.4,420,000
  • Profitability (B): 19,170,000
  • Return on Capital (A/B): 0.23 years

Case study on using advanced technology to grow mushrooms: Kiddu Abel

Many rural Mushroom farmers grow them in polythene bags suspended from the rooftop of dark grass thatched huts and structures made out of timber. Polythene is staffed with damp cotton seedlings in either maize brand, cotton or timber wastes. Mushrooms will begin to sprout after about 10 days and will continue to do so for the next 2-3 months.

Advanced ways of growing mushrooms is done in labs with machine controlled cooler systems and temperature controls/regulations. This process involves the use of genetically modified and lab manufactured stems. On average it will take 1-3days to begin producing mushrooms, in a period of 90 days each stem produces an average of 1.5kg of mushroom, on average 16.66g per day.

Mushroom growing requires dark and occasionally some light conditions, but most importantly a constant supply of water and humidity. Thus a temperature of below 25 degrees and humidity levels above 50 degrees must be maintained in the growing area/room for best results, this is very critical as temperatures will determine the size and quality of yields.

As a pre requisite, the stems must be sprayed with water at least three times a day depending on the heat and humidity to keep them cool, but most importantly, the stems have to be injected with water every after 10-14 days to keep them healthy and avoid them drying away!

Thus the most important component apart from the labor is the constant supply of water to the stems and keeping favorable room temperatures.

Another critical point to note is that mushrooms are highly perishable, thus preservation means like freezing or sun drying are another prerequisite.

African Mushroom Growers (u) ltd, are some of the recommended suppliers of mushroom stems, set up apparatus, equipment and also offer training and workshop short courses in the art and science of mushroom growing.

Contact Kiddu Abel: 0782 324 041

Now the basics you must get right before investing in this sector

Training. It is worth investing some time to undertake training. Even a visit to a farm is insightful.

Market. We recommend establishing contact with a supermarket or other wholesaler to establish a contract to provide regular supply. For a large player like a supermarket, what is critical is assurance that supply will be consistent and of high quality. You do not however need to limit yourself to a typical market of the supermarkets, the advanced thinking investor might choose to target the ministry of health or FAO to supply them with say mushroom supplements as part of their work in Uganda. Now that is creating a market for yourself.

Final word

Mushroom growing is easy to learn and to maintain, with low start up costs and returns in about 3 months this is a cracking venture to start. It is another of those sustainable ventures. The investor is doing good for the multiple health benefits of the community while also making money, a key factor in today’s global trends.

Besides the above, there is a huge gap that can be filled in this sector as it’s still underutilized and so mushroom growing presents an opportunity for not only the rural farmer but the urban dweller as well.

Otherwise, best of luck and of course if you need some help, do not hesitate to speak to us to get the ball rolling, Inachee after all represents Home Grown Energy in Motion.

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And now the disclaimer: While I have taken steps to research this information as well as based on my experience, you should not solely rely on the information given here to base your investment decisions. You should seek business advice from a professional knowledgeable of your specific circumstances. I shall therefore not be held responsible for any loss you may incur when acting on this information.

12 thoughts on “How do you mushroom your way to wealth?

  1. Hallo,chief Hon ,:mr Dickson e Wasake, well, ihave come up with a soltion of mushroom growing venter, isee it can emulate the fact  that in time we need soom tainning  on the way of making things go perhaps you have asay, in my common understanding , iwould be in that field  incase money is available  . so what amount of  capital could some one venture in mushroom growing? suppose aloan is obtained  and utilized for the mean time , becourse i have not ventured into mushroom growing , and always hear of good money coming out of it , so ineed your idea to come in proper explanation toward s that  ihear its being consumed locally and internationally so come in and advice . your s odeke Emmanuel Marco-odekem@uetcl.com this you and me to see if its agood venture . thanks.

  2. i have liked ur words am mushroom grower but the problem i have been having are what are the disease tht affect mushroom am happy tht atleast u answer about it and do u have a page on facebook coz it is more accessible and i would like to visit you for more knowledge and skills thnx

  3. i would greatly want to invest in mushrooms, and bee keeping. But i need some guidance please, thank you.

     

  4. Hi

    I would wish to startup a mushroom growing project. My humble request is that would you please avail to me the neccesary knowledge required if i visited your office in uganda.

  5. i have really love the Idear, i would like get more consultation on this investiment, please advise me on how easly i can locate you

  6. Thanx for such good news.im a small scale mushroom grower.how can you help me get in touch with people who export it so that they can be buying from me the little i grow?

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