Groundnut Oil Processing Business

Groundnut oil is a very important staple especially in African countries. Billions of tons are consumed worldwide and is the most common form of vegetable oil used for cooking.

The business is highly profitable due largely to the huge demand for the product. Groundnut seed is the raw ingredient used in the production of groundnut oil.

The tasty oil has lots of health and nutritional properties if consumed in moderation. However over indulgence and abuse leads to obesity and health related problems.

Processing groundnut oil is lucrative and is easily done large scaled or small scale. In West Africa there are collectively smaller groundnut oil processing outfits than large companies.

There are a few things to consider before establishing a small oil processing business. You need to write a business plan and carry out a feasibility study.

Procure the right machinery, source raw products and understand the manufacturing and marketing aspect of the business. Here are a few business ideas on how to launch your groundnut oil processing business.

Groundnut Oil Processing Business

Raw Materials

Without a steady supply of raw material needed to produce groundnut there is no business. Locate valuable sources of raw material and establish your processing plant close to source. This effectively reduces transportation cost from farmland to processing plant.

Study the Competition

Study the competition and find out why they are successful. Look at the type of machinery they use, labor force, production process and marketing techniques. This will provide a blueprint and clear idea of challenges you might encounter.

Understand Groundnut Oil Production Process.

There are many resources to help an entrepreneur understand the production process. You can acquire knowledge from books, seminars and workshops.

It is best to acquire practical experience of the entire production process. The major raw material used in the production process is groundnut seed.

The seed goes through cleaning then de-hulling which involves a grinding and rolling motion. Heated, then a mechanized press is applied to the groundnut cake to extract majority of the oil.

Then further extraction of expelled cake through a solvent process.

Groundnut Oil Production Process

 The ground nut seed is cleaned to remove contaminants. Other impurities such as dirt, sand, bad seeds and stones are removed through dry screening.

Dehulling is the removal of outer coat of the seed for easier extraction. They breakdown the seed further through a grinding and rolling mechanism. Heat is then applied to kill enzymes or harmful bacteria.

The crushed seed goes through a pressing machine. Groundnut processing companies also refine the expeller cakes with solvents.  The final product obtained from the pressing process is purified edible oil.

How to Finance the Groundnut Oil Company

A small manufacturing company could use locally fabricated equipment. They are much cheaper than imported brands and are equally effective.

However top brands that used hydraulic pressure produces better quality oil than crude fabricated machinery. The amount of funding depends on the size of your production plant.

If you have a bank of industry in your country they can provide funding for small scale manufacturers. Alternately try target savings or borrow from relations. You could try a partnership agreement or seek a core investor.

Registering the Groundnut Oil Business

Apply for food operational license, trade license and factory license. Incorporate your company and provide insurance cover and other tax considerations.

 Join any agricultural association in the groundnut oil sector of farming. Proper branding and labeling of product is essential and prescribed by law.

Groundnut Oil Processing Machinery

Here is a list of groundnut oil processing equipment. To start processing the seeds you need a Mechanical oil expeller, hydraulic pressure press, filters press, and steel drums.

Other equipment are dryer, weighing machine, pre-cleaner, large bowls, bottle or nylon packaging machine, capping or sealing machine.

Marketing Groundnut Oil Product

The oil has a huge customer based and is used daily in most households. It is added to meals, used for cooking or frying.

 Securing lots of wholesalers is easy because customers actively seek the product. Refined oil attracts premium price and high-end outlets such as supermarket or malls.

The less refined oil is more common in open markets and small stores. Make sure you work within a budget for any advertisement campaign you wish to embark on.

Another way to attract sales is through a target website. Add your website to classified sites and yellow pages. Produce good description of produce, high definition images and a shopping cart for online purchase. Starting a Sunflower Oil Production Business