Detailed Project Report of Groundnut Oil Unit

Vaazhndhu Kaattuvom Project- Salem District

Rural Development and Panchayat Raj Department
Government of Tamil Nadu

DETAILED PROJECT REPORT

GROUNDNUT OIL UNIT

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 Detailed Project Report of Groundnut Oil Unit

TABLE OF CONTENTS

S No. Topic Page

Number
1. Project Summary 3
2. About the Product 4
3. Process Flow Chart 8
4. Economics of the Project 11
4.1 ANNEXURE - I
4.1.1 Fixed Capital 12
4.2 ANNEXURE - II
4.2.1 Working capital 13
A. Raw Material 13
B. Utilities 13
C. Man power and wages Details 13
D. Other expenses
4.3 ANNEXURE - III
4.3.1 Total production and Sales 14
4.3.2 Business Profitability Analysis for a Month 14
4.3.3 References 15

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 Detailed Project Report of Groundnut Oil Unit

1. PROJECT SUMMARY

1. Name of the proposed project : Groundnut Oil Unit

2. Nature of proposed project : Producer Group

4. Raw materials : Groundnuts

5. Major product outputs : Groundnut Oil

6. Total project cost : Rs.845700

 Land development, building & : Nil

Civil Construction

 Machinery and equipment’s : Rs.450500

:
 Working capital Rs. 375200
 Pre-operative expenses (Advance) : Rs. 20000

8. Means of Finance

:
 Tribal development fund From VKP Rs.845700
(100%)

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 Detailed Project Report of Groundnut Oil Unit

2. ABOUT THE PRODUCT

2.1. PRODUCT INTRODUCTION:

The groundnut or peanut is a species in the family Fabaceae (commonly known as the
bean, pea or legume family). Groundnut oil, also known as peanut oil o is a mild tasting
vegetable oil derived from peanuts. Groundnut oil is a kind of light yellow transparent edible oil
with clear color and lecture, pleasant fragrance and good taste, is relatively easy to digest.

Groundnut oil contains more than 80% unsaturated fatty acids (including 41.2%oleic
acid and 37.6%linoleic acid). It also contains 19.9% of palmitic acid, stearic acid, arachidic acid
and other unsaturated fatty acids. The fatty acid composition of peanut oil is relatively good,
therefore it is easy for human bodies to digest and absorb. The groundnut is an annual
herbaceous plant growing 30 to 50 cm (1.0 to 1.6 ft.) tall. The leaves are opposite, pinnate with
flour leaflets (two opposite pairs; no terminal leaflet); each leaflet is 1 to 7 cm (% to 2% in) long
and 1to 3 cm (% to 1 inch) across. Peanuts have high oil content (45% - 52%) compared too
many other oil seed crops.

2.2 Overview:

Salem is a major city located on the banks of Thirumanimutharu River in the Indian
state of Tamil Nadu. Salem is the sixth largest urban agglomeration and metropolitan city.
Panamarathupatti is a panchayat town in Salem district in the Indian state of Tamil Nadu. This
revenue block consist of 20 village Panchayat. Panamarathupatti consists of a population of
8051. Males constitute 51% of the population and females 49%. Panamarathupatti has an average
literacy rate of 60%, higher than the national average of 59.5%: male literacy is 68%, and female
literacy is 52%.

2.3 Overview of Tribal Villages:

Kuralnatham is a Village in Panamarathupatti Block in Salem District of Tamil Nadu

State, India. It is located 13 KM towards South from District headquarters Salem. 7 KM from
Panamarathupatti which covering 9 Habitations and 1227 Households. All the households

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 Detailed Project Report of Groundnut Oil Unit
belongs to Hindu Malayali community and most of them engaged in farming. Through
Vaazhndhu Kattttuvom Project one producer group have been formed with 100 women farmers
who were involved in groundnut, ragi and mize cultivation. The project also supported the PG
with 75,000/- startup grant and the group have utilize the fund for procuring common agri
implements / machineries.

2.4 Groundnut Cultivation by PG members:

Out of 100 members 82 members are being involved in groundnut cultivation in 90

acres of land. They have used minimum quantity of their cultivated groundnuts for their own
purpose and sold the remaining to middle mans at lesser cost.

2.5 About the product:

Groundnut oil, also known as peanut oil, is a mild tasting vegetable oil derived
from peanuts. Groundnut oil is a kind of light yellow transparent edible oil with clear colour,
pleasant fragrance and good taste, is relatively easy to digest. The fatty acid composition of
peanut oil is relatively good, therefore it is easy for human bodies to digest and absorb. Peanut or
groundnut oil is a well-established product with a historically high use in several Asian foods and
cuisines. It is used either as a base for cooking (cooking oil) or to enhance the flavour of the
underlying food.
2.5.1 Market (About Industry in general and demand)
The market for cooking oil is a crowded place with a high level of competition and
minimal unique functionality. This competition is due to the high and consistent use of several
other vegetable oils and introduction of new and unique oils every year. The emergence of
soybean oil, for instance, is cited as an important reason for the decline in the use of peanut and
other vegetable oils. The impact of new oils is particularly strong in developed regions as
consumers belonging to these regions have access and purchasing power to buy these new
products.
2.5.2 Marketing strategy:
It is a product necessarily used every day in the all districts Tamil Nadu and
Southern states of India. It is used as a cooking medium in houses, sweet shops, hotels etc. The
focus will be on direct sales to customers as there is good demand for the ground nut oil
manufactured in the district. Further focus will also be on bulk sales to customers from Erode,
Bangalore who visit once in a week and procure the ground nut oil in bulk.
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 Detailed Project Report of Groundnut Oil Unit

2.5.3 Advantages
The use of groundnut oil can make the body's cholesterol into bile acids and
excreted, thereby reducing the plasma cholesterol levels. · In addition, the peanut oil also
contains sterol, wheat germ phenol, phospholipids, vitamin E, choline and other beneficial
substances for human. · Regular consumption of peanut oil can prevent the skin wrinkle aging,
protect the vessel wall, and prevent thrombosis and coronary artery disease. · The choline in
peanut oil can also improve the memory of the human brain and slow down brain function
decline.

2.6 Profile of the PG:

Name Kuralnatham Farmer Producer Group

Total Members 100

Total Area of Cultivation 105 Acres

Activity Farming and allied

Aggregation and sales of produce from PG

Activities of PG in Detail members (Groundnut, Coconut, Black gram,
Ragi, Maize.)

Proposed Activity Oil Extraction – Groundnut oil

Category ST

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 Detailed Project Report of Groundnut Oil Unit

TAMIL NADU VAAZHNDHU KATTUVOM PROJECT

PRODUCER GROUP BUSINESS PLAN FOR TRIBAL DEVELOPMENT GRANT

Name of the Producer Group (PG) Kuralnatham Urpathiyalar Kuzhu

1

2 Name of the district SALEM

3. Name Of the Block Panamarathupatti

4. Name Of the Panchayat Kuralnatham

3 PG Code SLM03-001-NPG01

4 Formation date 10-06-2021

6 Operational Since (Year & month) June 2021

7 Total Members 100

Name of the Office bearers Secretary-Mohanapriya - 9789783305

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Mobile: Treasurer - Chandra - 9566790797

Name of the Promoting Organization (PO)

Vaazhndhu Kaattuvom Project (Tamil Nadu
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Rural Transformation Project ) – Salem District

10 Key Sectors in which PG is involving & Farm & Agri Allied

commodities. (Agri, Agri Allied and

Non-Farm)

11 Working Commodities Agri, Agri Allied

12 Key Business activities and products Oil Extraction Unit & Trading

13 No. of women members 100

14 Grant availed details- Amount , Scheme Rs.75000 Startup Fund, TNVKP

15 Project Cost Rs. 845700

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 Detailed Project Report of Groundnut Oil Unit

2.7 Market potential:

The global groundnut oil market is highly congested with high level of
competition among key players. Moreover, since there is no unique functionality of groundnut
oil when compared to other vegetable oils, the demand is anticipated to remain stagnant
throughout the forecast period. Peanut oil is an edible vegetable oil that is derived from peanuts.
The peanut oil market size has the potential to grow by USD 1.90 billion during 2020-2024, and
the market’s growth momentum will accelerate during the forecast period.
Peanut or groundnut oil is a well-established product with a historically high use in several Asian
foods and cuisines. It is used either as a base for cooking (cooking oil) or to enhance the flavor of
the underlying food.

2.8 Raw material description:

Groundnuts are the main raw material for manufacturing. Groundnuts are a nutritious,
hunger- satisfying, low-glycemic snack. Groundnuts in India are available throughout the year
due to a two-crop cycle harvested in March and October. Ground Nuts are important protein
crops in India grown mostly under rain-fed conditions. The awareness and concern for quality
amongst the Indian groundnut shellers and processors are growing steadily.

3. PROCESS FLOW CHART

A complete seed of Groundnut is called as pod and contains one to three kernels,
which develops underground in a needlelike structure called as peg. In the first step, the healthy
and mature seeds of ground nut are harvested from the authorized vendor and stored in the
inventory.

In the next step, the foreign impurities like metal, plastics, husks etc. are separated
from the kernels manually. Then place the kernels over the vibratory pre-cleaner machine to
remove dirt, sand and stone particles. The Oil extraction machine works on the principle of
gyratory vibrations. The material is separated on the basis of their particle size. Once the motor
gets energized, vibration is caused in the screen/sieve making the material to travel across the
sieves according to its particle size.

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 Detailed Project Report of Groundnut Oil Unit

After this, the cleaned groundnuts are fed into Groundnut Decorticator Machine using screw
conveyors. Decortication of groundnut is a tedious and time consuming process. Groundnut
decorticator is operated on the shearing action blowering action and separating action. Firstly the
groundnut seeds fed to the machine. Then groundnuts come in contact with the two members,
one is semi-circular net and another is roll shaft having soft wooden core. Semi-circular net is a
stationary member while the roll shaft of wood is rotating member. When the groundnut comes
in contact with these two members then the shearing action takes place there. Due to shearing
action (crushing) the groundnuts gets shelled and divided into two parts that is in the kernels and
outer shell of the groundnuts. There clearance is provided between the net and roll shaft. The
clearance provided is depends upon the size of the groundnuts which is to be decocted.

The kernels have to be prepared for efficient oil recovery by pressing. This is done
by adjusting their moisture content and temperature, while keeping the seeds hot (say 90-95℃)
for a period of 30-60 minute. To perform this outer shells of groundnuts separated out in
previous step are fed into the cross tube boiler and burned to generate steam. This steam is
further utilized to heat the kernels for oil extraction. Kernels are stored in the containers and
steam is processed at controlled pressure to treat the kernels.

In the next step, the kernels are fed into oil expeller. The steam is also fed through
the expeller to maintain the temperature for oil extraction. The oil expeller crushes the peanut
seeds to extract oil. The oil extracted is collected in the containers. The oil cake obtained after
first compression has also some percentage of oil content remains in it. The cake is again fed into
other oil expeller to remove the oil content presence in it through conveyor. Steam is fed into the
machine to maintain the temperature. The oil extracted is stored in the containers.

The crude oil obtained after crushing has impurities present in it. In the next step, the
crude oil is fed into Filter machine. The pump feed the crude oil from container through pump
and transfer the oil to filter cloth. The filter cloth soak the fine impurities present in the oil. The
filter oil is passed through the tap present in the machine and collected in the tray. From the
machine tray it is collected into the container.

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 Detailed Project Report of Groundnut Oil Unit

In the next step, the oil is tested for quality prospective regarding the presence of
fatty acids in the edible oil as per the FSSAI norms. After this, the oil is filled into the bottles as
per the required quantity using oil filling machine. It should be ensure that the bottle must be
clean and dry before filling. The caps are mounted precisely to ensure proper sealing.

In the next step, the expiry date, specifications are printed over the bottle using
printing machine. Printed labels of company information are pasted over the bottles. After this,
the bottles are packed and dispatched as per the required quantity.

FLOW CHART OF GROUNDNUT OIL MANUFACTURING PROCESS

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 Detailed Project Report of Groundnut Oil Unit

4. ECONOMICS OF THE PROJECT

Cost of the project and Means of the project:

Cost of the Project: (Rs.)

i. Fixed capital (Annexure i) 450500

Cost of all the equipment’s /machinery/construction(excluding land cost)

ii. Working capital (Annexure ii) 375200

iii. Pre-operative expenses (Advance) 20000

Total cost of the project (i + ii + iii) 845700

Means of the project:

i. Tribal Development fund from VKP 845700

(100%):

Total means of the project ( i ) 845700

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 Detailed Project Report of Groundnut Oil Unit

ANNEXURE – I
4.1.1 Fixed Capital:

Description Specification Qty. Rate. Amount

S.No Rs
(No.) (Rs.)
Capacity: up to 5 ton/day
Machine Type: Cold Press
Groundnut Oil Extracting Power: 7.5 HP
1 Machine 1 Nos 250000 250000
Operation Type: Automatic
Usage/Application: Multi Seed Oil
Extraction
2 Automation Grade: Semi-Automatic
Filtration Capacity: 25 liter per
batch
Oil Filter 1 Nos 80000 80000
No Of Plates:7
Max Pressure: 7 bar
Voltage: 440 V
Capacity: 250 Kg
3
Motor Power: 2 HP
Groundnut Decorticator 1 Nos 95000 95000
Motor RPM: 1440

4 Weighing machine 1 Nos 8000 8000

5 Oil Container 5 nos 3500 17500

Total 450500

Total Machineries and Equipment’s required Cost – Rs.450500/-

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 Detailed Project Report of Groundnut Oil Unit

4.2 ANNEXURE – II
4.2.1 Working Capital:
A. Raw Material

Description Qty. Per Rate. Rs Amount (Rs.)

Sl.No
Month

1
Ground nut 2.5 Ton 110/Kg 275000

Total 275000
B.Utilities

Unit Cost No. of units/ Amount/ Month One Production

S.No Description
(Rs) Month (Rs) Cycle (Rs)
1 Electricity charges12 600 7200 21600
2 Water charges 200 3 200 600
Total 22200
C. Man Power requirements & wage details

Per person
No. of Amount/
S. No Particular No Salary /Month
Months Cycle(Rs )
( RS )

1 Skilled Labour 2 5,000 3 30000

Total 30000
E. Other Expenses

Per Month Rent No. of Amount/

S. No Particular No
( RS ) Months Cycle( Rs )
1 Rent 1 6,000 3 18000

2. Miscellaneous 1 10000 3 30000

Total 48000

(A+B+C+D) Total Working Capital Cost = 375200

The operating cycle is assumed at 3 months. The working capital requirement for one
operating cycle is Rs. 375200/-. The Debtors and Creditors are assumed as Zero since both
purchase and sale are assumed as cash and carry basis.

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 Detailed Project Report of Groundnut Oil Unit

4.3 ANNEXURE – III

4.3.1 Total Production / Sales:

Unit (MT/Kg/ Unit Price(Rs.) Total

Product (Rs.)
S.No Ltr.)
1 Groundnut Oil 1000 Lit 250/Lit 250000
2 Oil Cake 1450 Kg 60/Kg 87000
Grand Total 337000
4.3.2 Business Profitability Analysis for a Month:

S.N Value
Description Value (Rs.)
o (Rs.)
1. Sales 337000
Less:
1 Production Expenses (Raw materials) 275000
Administrative Expenses
2 Utilities 7400
3 Salaries ( Wages) 10000

4 Others Expenses 16000

Total 308400

Profit Per Month 28600

References

1. Oil Extraction Machine - indiamart

https://www.indiamart.com/proddetail/45-kg-hr-ss-peaunt-oil-mill-machine-2849621217233.html?
smp_widget=1
2. Groundnut Decorticator - indiamart
https://www.indiamart.com/proddetail/groundnut-decorticator-machine-2849391139997.html?
pos=12&kwd=groundnut%20decorticator&tags=A||||7774.041|Price|product|||LSnp
3.Oil Filter - indiamart
https://www.indiamart.com/proddetail/oil-filter-press-23190577330.html
4. Quotation
Received from Andavar Kathe Works – Erode

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