Ultimate Guide to Launch Groundnut Oil Milling Business in Nigeria

Are you planning to invest in cooking oil making business? Are you interested in starting a groundnut oil manufacturing plant or factory in Nigeria? Here is an article about groundnut oil production in Nigeria and how to start your groundnut oil mill plant.

extract oil from groundnuts
Extract Oil from Groundnuts / Peanuts

In recent years, the Nigerian economy has a manufacturing industry which is developed in a limited level, as well as the oil sector and the agricultural sector, which are still largely traditional. In the Nigerian economy, the petroleum sector accounts for over 85% of federal government revenues, more than 90% of export revenues and 40% of GDP. However, agriculture maintains its weight in the economy. The agricultural sector, which accounts for 50% of employment, constitutes 33% of GDP.

Start Groundnut Oil Manufacturing Business in Nigeria

It is a good opportunity for the businessmen to invest in Nigeria.

Considering that groundnuts are widely produced in Nigeria and almost all of the population uses the byproducts of groundnut, it seems to be profitable to build and operate groundnut oil processing machines.

small groundnut oil manufacturing unit for sale
Small Vegetable Oil Production Line for Self-employed Entrepreneurs

First of all, you will need to be registered in NAFDAC (National Agency for Food & Drug Administration & Control), in order to start a business in this sector in Nigeria. You can also get help from the companies, who provide consultation regarding the sector and on getting registered. After establishing your business plan and doing a good feasibility, and getting registered, you will be ready to invest in this sector.

The equipment required to build your groundnut oil manufacturing business can be supplied from the local market at affordable prices. As much as purchasing these machines, it's easy to mount and use them. In short, with the help of three-four pieces of equipment such as a cooking kettle in the size you need depending on the amount in your production plans, a boiler, filter press, and an oil expeller you can start producing peanuts with equipment.

Small Peanut / Groundnut Oil Plant Project Report

This is a small scale edible oil provessing plant which includeds oilseeds cleaning, crushing, oil pressing and crude oil refining machine. It is we built for our clients in Togo, designed for processing both peanut and soybean. Click here to see the detailed project report: 10TPD Small Peanut Oil Mill Plant Setup in Togo

small groundnut oil manufacturing plant setup in Togo

The initial capital cost  for a mini groundnut oil mill is around $7000, while the price of small to medium sized groundnut oil processing facility ranges from $40,000 to $100,000 in Nigeria. This amount will cover the necessary land, construction costs, and equipment. So much so that, if you have the intention of going into a business in the field of agriculture in a foreign country, you can seriously consider investing in producing groundnut oil in Nigeria. (Related Product: Small Crude Oil Refniery Plant for Setting Up Edible Oil Plant)

Groundnut Production Market in Nigeria

The following table shows the groundnut oil producers around the world. As we can see, Nigeria is the fourth producer of groundnut oil, and its production also keeps raising in recent years. 

Rank Country (Year of Estimate: 2018) Groundnut Oil Production (1000 MT)
1 China 2,784
2 India 990
3 Myanmar 270
4 Nigeria 265
5 Sudan 220
6 Tanzania, United Republic Of 133
7 United States 111
8 Argentina 83
9 Burkina Faso 76
10 Chad 64
11 Brazil 58

It should be noted that it is a country with great potential with its natural resources. In the late 1970s President Olusegun Obasanjo, who introduced the national food production program, tried to attract attention to the development of agriculture after coming to power in 1999. In addition, the government recently stated that it would liberalize land ownership, where, according to existing laws, the lands belong to the state.

groundnut planting in Nigeria
Groundnut Cultivated Area in Nigeria

Small-scale subsistence farmers are dominant in the sector, and as far as their needs are concerned, production and employment opportunities are established in Nigeria. Together with this, there are some large commercial farms in Nigeria. They usually produce sesame, palm oil and rubber for export purposes as well as the groundnut oil.

The country is the largest groundnut producer of the continent and the fourth in the world. Nigeria produces around 1.5 million metric tons of groundnut yearly and derives its oil, which is an extremely nutritious product. In Nigeria's lands, you can produce 5 metric tons of groundnuts per hectare. From one ton of groundnut, you can derive 500 liters of oil. The price of the oil depends on the currency and the season, however, a liter of oil is close to 1$ in Nigeria. 

Facts of Peanut Cultivation

Peanuts require soil in a well-drained structure. At the same time, the soil must be acidic in order for the plant to reach a pH of about 6-7. At the same time, they need about 5 months of moderate weather and a year of rainfall or equivalent in the range of 500 - 1000 mm per square meter. Soil temperature required for germination is about 30AC. Usually in the rainy season, that is, in late March planting is done. Seeds should be placed at a depth of 5 to 6 cm, 75 cm between the rows and 25 cm between the rows should be space.

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