How To Start Groundnut Oil Production Business In Nigeria

groundnut oil

Are you looking for a low-investment business to start either on a small scale, medium, or large scale that will give you a high return on investment? If yes, then I am happy to bring to your attention the lucrative business of groundnut oil production business with immense profit-making opportunity inherent therein.

Groundnut oil as we all know is a day-to-day essential commodity that is widely used in industries and in homes for all cooking processes. There is a high demand for groundnut oil with a shortfall in supply. The supply has recently fallen further following the ban on importation of the product thus making groundnut oil processing a fertile land for any interested investor to sow and reap a huge profit.

Market Potentials of Groundnut Oil

  • Groundnut oil as earlier mentioned is used for cooking food
  • Used as a shortening and a base for confectioneries
  • Used to make peanut butter
  • Used in mixing and baking flour into different products.
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Groundnut oil is the most widely used edible oil and costs higher than any other edible oil. The market size for groundnut oil has always been large and with the recent ban by the federal government on the importation of this product, the market is expected to remain large and unsaturated. With a population of over 170+ million people who use groundnut oil to cook and for the industrial process on a daily basis, the market for groundnut oil can’t be more profiting.

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Raw Material

Groundnut Seed is the major raw material needed for groundnut oil production.

Machines and Equipment Needed

Machines for the production of groundnut oil are easily sourced locally and easy to install and maintain.

Groundnut oil Processing Line Consists-

– Seed preparation

– Seed pressing/ oil extraction

– Filtration.

Groundnut oil processing requires the following machines


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-Cooking kettle


-Oil expeller and filter pan

Start-up cost

Groundnut oil production business requires varied investment costs according to the scale of operation. For medium-scale/ large scale fully mechanized groundnut oil extraction mill, start-up capital ranges between 10 to 15 million Naira.

The above cost cover for


-Equipment procurement


-Vehicle and operational expense

-Furniture etc

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The profitability of Groundnut oil Extraction-

Below is a cost/profit for 500 liters of groundnut oil production

1 ton of groundnut seed produces 500 liters of groundnut oil – 42 kg groundnut cake – 40 kg groundnut sludge

Cost of 1 ton of groundnut oil = 200,000.

75 cl of groundnut oil = N300.

NOW DO THE CALCULATION -remember to make room for profit from cake and groundnut sludge.

The abode Calculation is for 1 ton of oil, with a milling capacity of 3.5 ton of oil per day that’s more profit.

The calculation of our feasibility report shows a minimum profit of 3,000,000 per month. ( For full details get the feasibility report).

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With current statistics, the cost of labor, fuel, transport, and staff welfare falls below 800,000.

Note – selling a finished product is never difficult as you get a lot of dealers paying in advance.

How to Start Groundnut Oil Production

1. Get A Business Plan/ Feasibility report

Though this business is proven from every angle to be profitable. However, you wouldn’t want to invest your hard earn money based on assumptions. the first step to take is to get the business plan and feasibility report which will help acquaint you further with this business’s cost and investment, how to set off and produce quality oils and what to expect, how to gain workers as well as customers.

To Get this business plan and feasibility report, you can get it from us.

We have through research and years of studying this business and its market, have prepared the complete business plan and feasibility report on the said business.

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