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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.

Serious minded investors can be provided with more detailed information and technical assistance in setting up this project. 

Written by I.A Bello for

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  • chuka okonkwo November 22, 2013

    Thank you for this special write up sir, pls I am interested in getting futher info on this line of business as I am currently writting a biz plan on veg oil production. How can I get more details and advice?

    • Darlinton Omeh November 22, 2013

      Ask your questions here, I or anyone else may answer it.

    • Anonymous December 27, 2014

      Dear mr Darlinton,compliments of the sesson,please do you sreen the authors that post articles on your blog and you can guarantee we can do business with them?.Awaiting your response sir.

      • Darlinton Omeh December 27, 2014

        I can't guarantee your business with any author who have posted on or elsewhere. Some are no longer working with us and we can not trace their where about. Pls carry out due diligence before doing business with anyone. And when you decides to do business with anyone, understand that it is at your own risk. Thank you!

        • Anonymous December 27, 2014

          Thanks for the response sir.Your advice will guide my venturing into business transactions with any author here or any other blogs – Musa Abubakar

    • i what to know the cost of machine local one

  • chuka okonkwo November 22, 2013

    Who are the customers that will buy my products? How can attract those customers to my point of sale? What kind of people do I need to market my veg oil products? What are the factors that will affect my sales? What are the success factors necessary to survive in this business? what are the threats to this business?

  • Anonymous January 21, 2014

    This is a very good bussiness proposal, I love vegetable production cos I study industrial chemistry @ school, I love to venture into it in near future if I am able to get the capital but like now if I have like a little moni to get a land like how many plot of land is needed to start up this bussiness

  • Adeoye Saint Adeleye March 18, 2014

    This a very good and interesting site. Please I need to know the following:
    Who are the buyers of groundnut cake and sludge, are there market for it as groundnut oil?
    Where can I purchase groundnut seed and other equipment?
    What are the requirement to get registered with NAFDAC?

    • Darlinton Omeh March 19, 2014

      The question will be better answered by the author whenever he comes online or by anyone who is into the business

  • Anonymous April 2, 2014

    am ambrose…i studied chemical engineerin..i want to start goundnut oil nd red oil mill business, lubricatn oil, biodiesel production..i dnt knw how to get loan…i just need 1,000,000 to start…my numba is 08135450418..i resid in benin city…

  • Anonymous May 8, 2014

    go sale your papa house bro

  • Anonymous May 30, 2014

    First of all, I want to appreciate u knowledge sir may GOD bless you. Since someone is not fanicialy buoyancy to start this business, how possible is it for one to get connected to those that are already into this business.

  • Anonymous June 5, 2014

    Pls are d main courses for industrial chemistry

  • Chegepreneur July 13, 2014

    Hi, You are doing a great job encouraging Africans to start businesses and create jobs in the process for others & themselves. I have not seen the Groundnut cooking oil in my Country and it has crossed my mind that I could import & distribute it. I do not know whether there is a ban for importing vegetable oil in my Country but I will find out. In the meantime I would appreciate if you could give me information on what brands of Groundnut cooking oil that exist in Nigeria & their manufacturers.

  • Anonymous August 30, 2014

    wat r d benefits of groundnut oil sludge and cake.

  • Mka John Terfa November 20, 2014

    Hi this is obviously an excellent discussion, for those asking about who buys groundnut cake that is easy as GNC is a very good protein source in feed formulation for various types of farm animals and birds, farmers and feed mill operators will readily buy your cake and sludge if you have a steady supply and contact them.

  • Mka John Terfa-08037682595 November 20, 2014

    Hi all, this is an excellent discussion and am happy to join in, for those asking how to sell their groundnut cake (GNC) and sludge, note that GNC is very important protein source for feed formulation in various farm animals and birds, so farmers and feedmill operators will readily buy these by-product no matter the quantity available, I will also buy if you contact me.


  • UGOCHUKWU February 10, 2015

    Please how can one get materials on how to produce groundnut oil from oil palm. Thank you

  • Henry January 28, 2016

    does the profit margin factor in the packaging also?

  • EL Yakub March 22, 2016

    This is a marvelous write up sir..i’m interested in starting up my own mill..i just want to find out..what kind of machinery & equipments are involved in this business,how much it’ll cost & where to purchase this equipments..thank you sir

    • Rahina July 1, 2016

      I have groundnut oil production equipment for sale located in my Country Niger any one interested email me at
      Thank you.

  • Olubiyo Elijah April 20, 2016

    Direct-to-the-point writeup! But if one wants to site the factory in Kaduna town or outskirts, what’s the proximity to raw material i.e groundnut seeds? Are they largely available in Kaduna or are there groundnut seeds farm there?

  • Rahul April 29, 2016

    I want to estimate cost sheet of peanut oil mill. From where should i start the bussiness plan

  • Femi.O June 22, 2016

    dear sir,

    please i want to start vegetable oil production. but i need training on it, can you assist with a contact?

  • Roy June 30, 2016

    This is a good one but my own is this – I don’t have any money to buy machines and wish to start the business of ground nut oil pressing. How do I go ebony it

  • MobuEberendu September 15, 2016

    Hello if you have a good business plan on this i’m willing to pay

  • olay November 9, 2016

    I need training on hw to process this groundnut oil.

  • Rashidy August 10, 2017

    Pls how can I have the business plan for groundnut oil processing

  • Abdulrazak Ibrahim Bello August 15, 2017

    I want to write a description of groundnut oil processing, what are the guidelines for doing so?

  • idongesit October 5, 2017

    I want to go in to these business
    I wants to learn

  • Ayodeji November 5, 2017

    if u are interested in establishing groundnut oil processing contact 08024951342 to get business plan and advice

  • Mazi December 24, 2017

    This is a good source of information for beginners.

  • Don February 2, 2018

    where can I get the equipment for the business and how much is involved to the different capacity

  • Emmanuel February 6, 2018

    Please can I get business proposal on this vegetable oil production

  • Adeniyi Sunday October 6, 2018

    am in interested in production of groundnut oil, I need the cost implications in full

  • Aliyu Musa January 3, 2019

    Good day Sir. Kindly provide the phone number, email or Whatsapp number of the write (Mr. A I Bello) for some of us interested in further consultations on this.

    Thank you.

    Aliyu Musa

  • lucasbalami July 1, 2019

    I want to go into the business, how can I gather more information.

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