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How to venture into Groundnut oil Production Business and make Profit of 70,000 Naira per day

Cooking Groundnut Oil which is referred to as vegetable oil by some is one of the oil products in high demand as a large number of people use it for consumption as well as commercial purpose, while there are substitutes for groundnut oil, the fact still remains that this oil is cheaper and affordable, which makes it commonly used by most homes. Recently a litre of this oil cost N300 per litre in most markets.

Groundnuts are nuts that can be found all the time and is regarded as one of the highly nutritional nuts which is why it is amongst the top nuts. Any entrepreneur venturing into the processing of this nuts will therefore make good money from it.

This write up will focus on the processing of groundnut into oil and cake. Although the production process is almost the same for all the seeds with just slight differences in the production line. The Product Line of oil from groundnut is seed preparation as shown above, seed pressing/oil extraction and filtration. A typical groundnut oil mill has the following facilities:-


Other Equipment used in the production of groundnut oil are Cooking Kettle, Baby Boiler, Oil Expeller and Filter Press. For a small/medium scale mechanised 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.

The Analysis:-

One tone of groundnut seed produces an average of 500 litre of groundnut oil, 420kg of groundnut cake and 40kg of groundnut sludge. As at last two weeks the average price of the following:-

1 tone of groundnut seed - N180,000

1 Litre of groundnut oil - N260

1Kg of groundnut cake - N160

1 Kg of groundnut sludge - N100

So if you process 1 tone of groundnut seeds you are likely to get an average profit of N20,000. The oil milling machinery referenced in these write up has the capacity to process 3.5 tones of groundnut per day which means an average of N70,000 profit is realisable per day which translate to N2,100,000 per month. Monthly cost of labour, 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 production level doesn't meet demand. You get dealers paying in advance for your products the moment you start production. Study shows that 80% of homes consume or use vegetable oil and its products.

This business is a highly lucrative one that you can invest into and make huge returns. Please share and make your comments on this business ( Groundnut Oil Production Business)