How to Start Groundnut Oil Production Business in Nigeria + DIY tips for starting from HOME and Marketing tips
Do you want to start a groundnut oil processing business? If YES, here is a complete guide to starting a groundnut oil processing business with NO money and no experience.
Edible vegetable oil is oil produced from any of the edible oil bearing seeds that exist in nature. Many of these seeds are produced in large quantities in Nigeria. Amongst them are: groundnut, oil palm fruit, soybeans, cotton seed, sesame seed, melon seed, etc.
This write up will focus on the processing of groundnut into oil and cake. Although the production process is almost the same for almost all the seeds with just slight differences in the production line.
The production line of oil from groundnut is: seed preparation, seed pressing/oil extraction and filtration. A typical groundnut oil mill has the following facilities: decorticator, cooking kettle, baby boiler, oil expeller and filter press.
For a small/medium scale mechanized groundnut oil mill, the start-up capital is between five to six million naira. This will cover the cost of land, construction, furniture, procurement and installation of machinery, vehicle and operational expenses.
One tone of groundnut seed produces an average of 500ltr of groundnut oil, 420Kg of groundnut cake, and 40Kg of groundnut sludge. As at last two weeks, the average price of the following is true (in kaduna state):
1tone of groundnut seed = N180,000
1ltr of groundnut oil = N260
1Kg of groundnut cake = N160
1Kg of groundnut sludge = N100
So if you process 1tone of groundnut seeds, you are likely to get an average profit of N20,000. The oil milling machinery referenced in this write-up has the capacity to process 3.5tone of groundnut per day. Which means an average of N70,000 profit is realisable per day, which translates to N2,100,000 per month. Monthly cost of labor, staff welfare, fuel, and transport will not exceed N700,000.
It should be noted that there is a ban placed on the importation of vegetable oil into Nigeria so as to encourage local investors to go into its production. This gave birth to a very high demand in the country, as the present production level doesn’t meet demand.
You get dealers paying in advance for your products the moment you start production. Study shows that over 80% of the populace of Nigeria consumes or use vegetable oil and its products.
STEPS
First of all, the groundnut seeds need a thorough cleaning process to remove sand, stalk, plant debris and any other impurities. And then for the post cleaning, the groundnut seeds have to be prepared for pressing, which usually involves size reduction of the groundnut seeds by breaking them and then conditioning by adjusting their moisture content and temperature, while keeping the seeds hot for a period of certain minutes.
Second, the well prepared seeds are conveyed to the screw pressing machine, which is the most popular method of groundnut oil production. The machine’s screw warm pressed the groundnut seeds as it moves to advance where the space is smaller and smaller. Due to strong frication and high pressure, groundnut oil is pressed out. Besides, as the temperature in the machine’s pressing chamber rises, the output rate of groundnut oil also increases. Finally, the fresh groundnut oil seeps out through the small openings in the bottom of the pressing chamber.
Third, the fresh rude groundnut oil obtained from the pressing machine is clarified in a setting tank and then pumped through the filter press. The filtered crude groundnut oil will be pumped to the refinery for three stages of refining: neutralization, bleaching and deodorization.
7 Steps To Make Your Own Groundnut Oil At Home
#1. Get the Peanuts
Buy fresh peanuts from the market, you can buy a small paint bucket depending on how much oil you’d be needing, 3 cups of groundnut should give you about 1 cup of oil.
#2. Clean up the peanuts
This is the most time consuming part unless you bought the groundnut that has already been shelled and cleaned up, you’ll have to break the hard shells yourself and bring out the groundnut. Then remove the back, to easily do this you can fry the groundnut for like 5 minutes or wash them in cold water then warm water.
#3. Soak the Peanuts
Put the peeled and washed groundnut in a clean bowl, then pour warm water on it. Allow the groundnut to soak in warm water for 10-15 minutes, so that the peanuts get little soft.
#4. Blend the Peanuts
Drain the water, then take the groundnut to a local mill to blend, let them preheat the machine before pouring the groundnut. But if you have a blender, blend the groundnut until it becomes smooth like butter. To make it less difficult to blend, add 1 or 2 tablespoons of warm water but not too much water so it doesn’t make it watery.
#5. Refrigerate
Pour the peanut paste into an air-tight container and cover the lid tightly. Leave the container inside the refrigerator for at least 24 hours. Do NOT disturb the container for rest of the time, after 24 hours or more, the oil have risen to the top of the container.
#6. Separate the Oil
After the oil has risen to the top, you have to separated the oil from the paste, strain the oil into a separate bowl using a colander. Keep straining the paste until the paste is dry.
#7. Store the Oil
Strain the oil until it’s completely clean, then pour it into a clean jar or bottle. Close the lid tightly and keep.
If you want to go into large vegetable oil production, you’d be needing a oil press machine, and the procedure is totally different. I’d also advice you do a small portion the first time just in case you make a small mistake that makes the procedure go wrong
Why Start a Groundnut Oil Processing Business?
No entrepreneur would want to go into a business if they know the chances of making profit from the business is slim, as such, the need to start a business whose products or services is generally accepted by all and sundry, and one of such businesses is the production of groundnut oil. It is fact that all homes or restaurants cum hotel related businesses make use of groundnut oil on a daily basis.
Marketing tips
- Ensure that you introduce your groundnut oil company officially to wholesalers and distributors as well as other industry stakeholders
- Throw a grand opening party so as to create awareness about your business to your target market
- Advertise your cooking groundnut oil business in newspapers (local and national) as well as on radio and television stations
- Ensure that youengage in direct marketing and sales to your various customers
- Use your social media platforms such as Facebook, Twitter, LinkedIn and Google Plus to market your cooking groundnut oil business
- Ensure that your groundnut oil business is listed in local directories (Yellow Pages) and on online directories as well
Starting a Groundnut Oil Processing Business – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who make use of groundnut oil cut across households and all players in the food preparation line of business such as hotels, restaurants, bakers, caterers, and snack manufacturers et al. So, it will be safe to say that the demographic composition for a groundnut oil production company is all encompassing.
List of Niche ideas Within the Groundnut Oil Processing Business That You Can Specialize in
Groundnut oil production is a niche area in the Cooking Oil Production industry, but we are not ruling out the fact that it is the practice for groundnut oil production companies to engage in the production of other cooking oil for the purpose of maximizing profits.
This is why you find groundnut oil production companies also engage in producing some or all of the under listed;
- Soybean oil production
- Rapeseed oil production
- Cottonseed oil production
- Olive oil production
- Castor oil production
- Sesame oil production
- Sunflower seed oil production
- Corn oil production
- Other edible oil production
The Business Services Process Involved in Groundnut Oil Production
The groundnut oil production process includes: groundnut seeds preparation, groundnut pressing and groundnut oil refining. The starting point involves taking the groundnut seeds through a thorough cleaning process to remove sand, stalk, plant debris and any other unwanted particles.
Thereafter, the groundnut seeds have to be prepared for pressing, which usually involves size reduction of the groundnut seeds by breaking them and then conditioning by adjusting their moisture content and temperature, while keeping the seeds hot for a period of certain minutes.
In the next stage, the well – prepared seeds are conveyed via conveyor belt system to the screw pressing machine, which is the most popular method of groundnut oil production. The machine’s screw warm press the groundnut seeds as it moves to advance where the space is smaller and smaller.
Due to strong friction and high pressure, groundnut oil is pressed out. In addition, as the temperature in the machine’s pressing chamber rises, the output rate of groundnut oil also increases. Finally, the fresh groundnut oil comes out through the small openings in the bottom of the pressing chamber.
Lastly, the fresh crude groundnut oil obtained from the pressing machine is elucidated in a setting tank and then pumped through the filter press. The filtered crude groundnut oil is then channeled to the refinery for three stages of refining: neutralization, bleaching and deodorization and then filling into the required container, packaged and ready for distribution.
Please note that quality control is enforced at every stage of the process in order to ensure that only healthy groundnut oils are produced and sold to the public.
Strategies to Boost Your Groundnut Oil Brand Awareness and Create Your Corporate Identity
If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portray your business to be.
If your intention of starting a groundnut oil production company is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening chains of distribution network and exporting your products, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your groundnut oil production company;
- Place adverts on both print (newspapers and food magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google + et al to promote your groundnut oil production company – brand
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods to create awareness of your groundnut oil production company
- Distribute your fliers and handbills in target areas
- List your groundnut oil production company in local directories
- Advertise your groundnut oil production company in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners at strategic positions in the location where groundnut oil production company is located
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans are well branded with your company logo
