How to Start Groundnut Oil Business

There is a huge market for groundnut oil in Nigeria. The production level is less than the consumption. It is the main cooking oil used in sews and more commonly used than palm oil.
Cooking oil production has witnessed resurgence in recent times due to the federal government’s ban on the importation of the product.
Did you know that one ton of groundnut seed can produce 450 liters of oil and 400 kg of groundnut cake? The cake is sold to animal feed mill makers. The business is seasonal, however improved seeds increase productivity.
To start the business there are a few things to consider. You need factory space, equipment, transportation and business registration. Others are operating permit, funding, labor and marketing. 
It is also important learning the production process. There are three aspects of the business. You have the oil producers, wholesalers and retailers. The producers extract the oil from the nut and sell in kegs to wholesalers. The wholesalers sell to retailers or directly to customers.
groundnut oil
How to Start a Groundnut Oil Processing Company
Learn the Rudiments
Before you can process groundnut you need to learn the trade. Learn by attending workshops, seminars or trade institution. You can read books, watch video tutorials or take an online course.
You could hire an expert for provide private coaching on the production process. Volunteer in a processing plant to learn the skill. Other methods are through apprentice programs or practical training.
  • attending workshops
  • seminars
  • trade institution
  • read books
  • watch video tutorials
  • online courses
  • provide private coaching
  • apprentice programs
  • practical training
Register the Groundnut Company
Choose a business name and register the business. Register it as sole proprietor or LLC with the corporate affairs Commission. Get insurance cover, tax identification number (TIN).
Write a Business Plan
Then write a groundnut processing business plan. Then carry out a feasibility study/survey to pick a location close to source of raw material or market base. The space should accommodate equipment, storage, transportation.
To get an operational permit visit the national food & drug administration (NAFDAC). They are main regulatory body for drugs, food, consumables. If you are packaging the product you need to include factory location, NAFDAC reg. number, and date of manufacture.
Get Funding
The amount of money you need depends on the scope of the business. Try target savings or borrow from friends. Visit a micro finance bank or join credit corporative. Try the bank of industry or any commercial bank in your locality.
How to Produce Groundnut Oil
The stages of groundnut oil production starts with the removal of the husk. The husk could be removed through mechanized equipment or manually.
Mechanized removal is fast, efficient and precise. While manual removal is labor intensive and challenging.
Once the nut is achieved it is swashed and impurities like sand, stone and dirt removed. The nut then goes through pressing, size reduction, condition adjustment in temperature and moisture content. The primary equipment in this process is the screw pressing machine.
To process the nut heat is applied and a machine applies pressure to extract the oil. The oil is collected, allowed to sit in tank or filtered. Oxidation stability is achieved through a bleaching process.
It goes through several filtration processes to get groundnut oil. To refine groundnut oil it goes through several stages. It goes through three filtration stages, neutralization, bleaching and deodorization. The purity depends on the type of processing, equipment and filtration.
Stages of Groundnut Oil Processing
  • De-husking
  • sorting pressing
  • setting
  • neutralization
  • bleaching
  • deodorization
Groundnut Processing Equipment
There are either modern or traditional ways to produce groundnut oil. The local method involves heating pan, expeller press machine.
More equipment is collection tank, filtration cloth, bleaching tank, packaging bottles. Modern equipment is the screw pressing machine, setting tank, filter press.
The product is in high demand so the marketing is minimal. Sell your products to wholesalers, middlemen, retailers market women. You can also sell directly to private individuals.


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