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How to Start Cashew Nut Processing Plant Business in 7 Steps

Do you want to start a cashew nut processing business on a small scale or from home? If so, find here a stepwise guide on starting a cashew processing plant with the manufacturing process, licenses required, setup cost, machinery, etc.

In India, mainly the 8 states are popular for the commercial cultivation of cashew. These are Andhra Pradesh, Goa, Kerala, Karnataka, Orissa, Maharashtra, Gujarat, and Tamil Nadu. Raw cashew is not ready to eat food items. Processing is a must. The cashew processing unit is a small-scale and profitable agro-based business in India.

Processed cashew nuts from raw cashews are the famous dry fruits. These are consumed directly or converted to a variety of products like salted cashew nuts, Kaju Burfi, cashew curries, etc  In India, processing of cashew is a manual and highly labor-intensive process. Mechanization in cashew processing is picking up gradually. Availability of raw material and optimum utilization of the plant is crucial in this manufacturing operation.

Is Cashew Processing Business Profitable?

The demand for cashew nuts is increasing rapidly.  India is the leading producer, processor, consumer, and exporter of cashew nuts in the world. It is one of the important agricultural commodities exported from India to many countries in the world.

However, the local domestic market consumes about two-thirds of cashew produced in the country. India accounts for 65 percent of total cashew nut exports in the world and export cashew to more than 60 countries. The Cashew Export Promotion Council of India (CEPCI) works towards the promotion of cashew nut and cashew nut shell liquid (CSLN).

Here are the 7 Steps to Start Cashew Nut Processing Business

1. Cashew Processing Business Registration & License

In starting a cashew processing unit, you will need to obtain several registrations and licenses from Govt. authorities. These are as follows:

  • Registration of the firm: You can register the business either as a proprietorship or partnership firm. In the proprietorship, you must register the firm as One Person Company. For partnership operation, you can register as LLP or Pvt. Ltd. company with ROC.
  • In addition, obtain Trade License from Municipal Authority.
  • Apply for GST Registration.
  • Apply for Udyog Aadhaar MSME online registration. This is optional. However, it will help you in getting technology cooperation and subsidy from Govt.
  • ‘Consent to Establish’ and ‘Consent to Operate’ from State Pollution Control Board
  • License from boiler inspector.
  • Also, apply for ‘Agmark’
  • Apply for online FSSAI registration. The processing units should follow the Food Safety and Standard Authority of India (FSSAI) act 2006. FSSAI Act is the applicable pan India for all food products. It prescribes minimum standards operating procedures, food safety norms, packaging & labeling norms.
  • Finally, you can protect your company brand name, through Trademark Registration.

2. Cost of Starting a Cashew Nut Processing Business

A small-scale automatic cashew nut plant with a capacity of processing 350 kg/hr of nuts will around Rs. 2.5 lacs. The entire allied machinery and equipment costs will be around Rs. 10 Lacs. You also need a minimum area of 2000 sq. ft space for installing the plant and storage facility. Overall the cost of setting up a cashew nut processing plant will be in the range of Rs. 25 lacs to Rs. 35 Lacs.

3. Arrange Funds

Financing for food processing falls under priority sector lending. The loans to units meeting the criteria of MSME are classified under the MSME sector. Such units can be financed by any scheduled commercial banks, Regional Rural Banks, and Cooperative Banks.

It is compulsory to take a bank loan to avail of various subsidy schemes of the government. Ministry of Food Processing Industry, GoI is implementing a centrally sponsored scheme known as the National Mission on Food Processing (NMFP) jointly with State Governments.

4. Cashew Processing Machine & Unit Setup

A plot of land admeasuring 500 sq.m will be sufficient for the small-scale cashew processing unit. However, the site should be leveled and with open space for sun-drying of raw cashew. One can start a cashew processing unit at any location in the country.

However, you must select a location carefully. Take the decision strategically keeping in view the availability of a ready market and cheap labor. You can take the help of transport to get the raw cashew to the processing unit from raw material growing areas. Setting the unit in a cashew growing area will add advantages of readily available backward and forward linkages.

You will need to procure the following machinery and equipment for the cashew processing unit.

  • Steam Boiler
  • Cooking Vessels
  • Semi-automated Peeling Machine
  • Multi-color Cashew Kernel Sorting Machine
  • Husk Winnowing Machine
  • Steam Pipeline
  • Hot Oven
  • Hand Operated Cutting Machine
  • Cashew Peeling Machine
  • cashew filling machine
  • Pieces separator
  • Weighing scale
  • Sealing Machine
  • Food grade plastic tubs, buckets, crates, bowls
  • Diesel Generator Set

5. Cashew Nut Processing Process Flowchart & Raw Material

The basic cashew nut  processing process is the following:

Step 1: First of all, sun-dry the raw cashew and store them in gunny bags.

Step 2: Then steam the in-shell cashews under pressure to soften the shell. This causes the cashews inside to become loose and easier to remove in time.

Step 3: Each cashew shell is split open longitudinally and the cashew inside is immediately taken out by hand

Step 4: After removing the kernels from the shells, dry them in an oven at low heat for a few hours. It helps to loosen the skin which enables easy peeling.

Step 5: The cashew kernels obtained are dried in a cabinet dryer. The outer reddish skin known as testa is removed to obtain cashew nut after drying.

Step 6: Cashewnut is graded on the basis of the colour and on how the kernel is broken. The grading of cashew is done as per Agmark standards.

The only raw material required will be cashew fruits. Moisture-proof and airtight packaging is the mandataries. You will need to procure the packaging consumables for the cashew processing unit.

6. Profit Margin

The profit margin typically depends on several factors. Some of them are sourcing costs of raw cashew nuts, transportation costs, manpower expenses, and promotional expenses. If planned correctly, one can easily expect a net profit margin of a minimum of 30% from the cashew nut processing plant business.

7. Have a Marketing Plan

Having a well-planned marketing strategy is most critical to the overall success of the cashew nut business. Create an efficient network of dealers and wholesalers to reach a wider market. Also, create brochures, pamphlets, and other promotional tools to develop brand awareness of your cashew nut company.

Having an online presence is almost mandatory nowadays. Create a website and publish all the necessary information about your products. Furthermore, explore social media platforms, enlist with B2B marketplaces and make your presence felt online.

Learning Resource For Cashew Processing Business

The Complete Book on Cashew (Cultivation, Processing & By-Products)

If you want to start a commercial cashew processing unit, then you must have knowledge about the machinery, processing, packaging, etc. And a detailed book is the best resource for this. Therefore, we strongly recommend you read this book to get entire information about cashew processing.

This book is not only confined to the different methods of cashew processing but also describes by-products obtained from cashew. The traditional method of cashew processing through which we get CNSL(Cashew Nut Shell Liquid), the major source of Cardanol. Cardanol is a phenolic lipid that is the byproduct of cashew nut processing.

It has several uses and applications in chemistry, chemical industries, additives industries, and fuel industries for low sulphur diesel fuel. This book contains the purification process of CNSL for isolation of cardanol, and evaluation of coppered CNSL and neem oil as wood preservatives. It also provides a wide idea to their readers about its nutritional value, commercial exploitation, hygiene and safety issues, packaging and preservation, usage, manufacturers, and suppliers of the machinery of this process.

It has several uses and applications in chemistry, chemical industries, additives industries, and fuel industries for low sulphur diesel fuel. This book contains the purification process of CNSL for isolation of cardanol, and evaluation of coppered CNSL and neem oil as wood preservatives.

It also provides a wide idea to their readers about its nutritional value, commercial exploitation, hygiene and safety issues, packaging and preservation, usage, manufacturers, and suppliers of the machinery of this process. This is a perfect book for entrepreneurs who want to start a successful cashew processing unit.