How to Start Groundnut Oil Extraction Production Business

Groundnut oil production is a financially profitable venture with huge export potential. In addition, you can initiate the groundnut oil processing operation on a small and medium scale basis according to the desired output and project cost.

Initiating a groundnut oil production business requires feasibility study preparation, procurement, and installation of machines in the appropriate accommodation, recruitment of personnel, and project commercial take-off. One metric ton of groundnut seed produces an average of 420 LTR of groundnut oil, 420Kg of groundnut cake, and 40Kg of groundnut sludge.

Groundnut Oil Production Market Potential 

Groundnuts are a popular source of food throughout the world. Groundnut oil is used for cooking food and as a shortening or as a base for confectioneries and it can be used to make peanut butter. Groundnut oil ranks at the top among edible oils exported from India.

It is a premium oil and its cost is also high. Most other edible oils are priced lower than groundnut oil. Groundnut oil is available in the market is refined and filtered forms. Although filtered oils are nutritionally superior in quality.

The latest data shows that there are almost 75 countries that import groundnut oil from India in huge quantities. The total export value stands at 64 million in US dollars.

1. Groundnut Oil Production License & Registration

In establishing a groundnut oil production unit, you will need to obtain several different licenses and registration from different Government authorities.

  • Company Registration with ROC
  • Trade License
  • GST Registration
  • Factory License
  • Food Operator License
  • BIS Certification
  • ‘No Objection’ from Pollution Control Board
  • AGMARK Certification
  • Fire License

The Food Standards and Safety Rules, 2011, and rules made under IS 544: 1968 permit additions of antioxidants in groundnut oil for a higher shelf life of the oil. However, under the scheme of labeling environment-friendly products, the presence of antioxidants within a prescribed limit is a requirement as per notification of the Ministry of Environment and Forests.

These are the common license and certification requirements. Check with your local DIC authority about any other required formalities.

2. Arranging Finance For Groundnut Oil Production Unit

Alike any manufacturing industry groundnut oil production business also involves two types of cost factors. One is fixed capital and another one is working capital. A refinance scheme facility is available with NABARD. For fixed capital, you will need to apply term loan or mortgage loan. For working capital requirements, you can go for cash credit or the overdraft facility with your nearby bank or any financial institution.

3. Groundnut Oil Production Unit Setup & Machinery  

Selecting the right location for factory operation is an important aspect. Major required utilities are water and electricity. Easy availability of transport facility and labor is important. Create a floor plan indicating specific space for raw material storage, finished products storage, production unit area, administrative workspace, storeroom for oil cakes, and space for miscellaneous usage.

Generally, you will need to have 0.50 acres of nonagricultural land for establishing an improved groundnut oil expelling unit. Here, you can install a pa lant with a processing capacity of 240 MT /annum. Additionally, the land must come with proper elevation.

The basic machine & equipment required are as follows:

  • Pre-cleaner for cleaning the oil seeds
  • Cans and trays for handling oil seeds
  • Batch type solar dryer
  • Tapering screw types mechanical oil expeller
  • Filter press
  • Steel drums for storing edible oil and sedimentation of impurities
  • Weighing balance
  • Semiautomatic bottle filling machine
  • Molded polycarbonate bottle capping cum sealing machine

If you want to go for pouch packing, you will need to have an automatic pouch filling and sealing machine.

4. Raw Material For Groundnut Oil Production 

The principal raw material required for the production of groundnut oil is groundnut seed. And you can procure this locally. The seed gives 44.5-50% oil, 50-55% meal. However, other required raw materials are caustic soda, bleaching earth, and packaging consumables.

5. Groundnut Oil Production Process & Technology 

Basically, you can divide the edible oil technology into two groups. These are mechanical pressing and solvent extraction. For oilseeds with high oil content such as groundnut, you will need to apply first mechanical pressing.

Here, you can extract over 85% of the oil. However, you can extract the remaining oil in the expeller cake with a solvent. As per mechanical pressing technology, you can divide the groundnut oil production process into three stages. These are seed preparation, pressing, and crude oil refining.

Storage → Cleaning → Dehulling → Grinding or rolling → Heating → Pressing oil cakes → Refining  impurities → Purified Edible Oil

a) Cleaning

The first step in preparing oil seeds for oil extraction is to clean them. Clean properly so that the oil is not contaminated with foreign materials. Therefore, it helps to proceed with the extraction process as efficiently as possible.

During the process, carefully inspect the seeds to remove stones, sand, dirt, and spoilt seeds. Additionally, you can use a dry screening technique to remove all material that is over or undersized. Sometimes washing is also resorted to but it must be avoided as the plant tissue will have to be dried at a later stage.

b. Dehulling

During the process, remove the outer seed coat of the oilseed. Generally, you can use a power-operated dehuller for the operation. Removal of the outer seed coat is necessary as it does not contain oil and inclusion of it in the unit operations makes the oil extraction process less efficient. Some seeds such as groundnut can be shelled by hand. Some other such as sunflower seeds are usually hulled in machines. Still others, like safflower and colza, cannot be shelled.

c. Grinding or rolling

Seed is not usually pressed whole since oil extraction is more efficient if the seed is in smaller particles. Herein lies the relevance of the grinding process. Grinding is the process of reducing particle size. Additionally, you can use small motor-powered hammer mills for the unit operation.

Another alternate process used for the reduction of particle size is rolling the oilseeds to produce flakes for oil extraction. Many large-scale commercial plants find this the most effective approach. Additionally, with large oilseeds, it may be necessary to grind the seed first, and then put the pieces through the flaking rollers.

d. Heating

It is the final step for preparing the raw material for oil extraction. Heating leads to increased oil yield. Heating helps in killing those enzymes present in the plant tissue which have a deteriorating effect on oil quality.

Moreover, if you don’t use the oilseed cake for feed or feed, heating is useful as it increases protein availability. Sometimes, you can press the oil-bearing material without heating it. Oil extracted in this way is called cold press oil.

e. Pressing

During processing, press the conditioned oil seeds/oil-bearing material using a lever press, hydraulic press, or a mechanical expeller to remove the oil.

f. Refining

When you use the lower quality feedstock for oil extraction, you can use this process. Basically, it helps in removing undesirable cloudiness, color, and flavor from the extracted oil.

 In groundnut oil production, mentioning the shelf life on packets or labels is mandatory.

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