India is one of the largest producers and consumers of edible oils. With a rising demand for healthier and locally sourced oils, starting an oil mill business can be a profitable venture. Whether you plan to extract mustard oil, coconut oil, groundnut oil, or any other edible oil, this guide will help you set up a successful oil mill in India.
Small Scale Oil Mill Business Production Unit
Mini oil mill or small size oil mill are the BEST choice to start the oil mill business in India. It requires relatively simple business plan and will also be a successful business plan. Here are advantages of mini or small scale oil mill business.
- Requires relative low investment cost since it only needs small factory areas, relatively simple oil processing equipment, less labors and less consumption of energy.
- Suitable for various oil crops to produce high quality edible vegetable oils, including mustard oil, cottonseed oil, soybean oil, palm kernel oil, peanut oil and more.
- Relatively simple oil processing technology is easy to operate and maintenances.
- Ensure high quality oil for its full complete oil manufacturing process.
If you are really interested in start oil mill business in India, please contact us for complete professional information to fulfill your business plan so as to make it success.
Small Scale Domestic Oil Mill Production From Home in Low Budget
The best way to start oil production mill business in india. you are start oil mill business in small investment from your home. design simple business plan for successful oil mill business. here’s are advantage of domestic oil mill business form home.
- you are not required any factory area because this oil mill machine setup at your own home small space, simple oil processing equipment, without labors and less consumption of energy.
- Simple machine processing technology is easy to operate and maintenances.
- Produce high quality edible oil, including mustard oil, cottonseed oil, coconut oil, soybean oil, palm oil, peanut oil, Sesame oil, Almond oil and more.
- Ensures natural and preservative-free oils
- Extract pure, healthy, and homemade oil with ease!
if you are really interested in start oil mill business in India, please contact us for complete professional information to fulfill your busienss plan so as to make it success.
Great Potential of Edible Oil Making Business in India
In India alone, the edible oil industry was worth USD 3.54 billion in 2020; this number is projected to grow at a CAGR of 6.82% to reach USD 5.72 billion in 2027.
- High Consumption: India consumes over 25 million metric tons of edible oil annually, with demand growing at a steady rate.
- Heavy Imports: Despite being a major agricultural country, India imports nearly 60% of its edible oil, presenting a strong opportunity for local manufacturers.
- Health Trends: Increasing awareness about heart-healthy oils such as olive oil, rice bran oil, and cold-pressed oils is shaping consumer preferences.
Supply and Demand of Vegetable Oil Mill Business Production in India
India is one of the largest consumers of vegetable oils, with an annual demand exceeding 25 million metric tons. However, the country faces a significant supply-demand gap, leading to heavy dependence on imports. The edible oil industry is crucial for food security and economic growth, making local production a key focus area.
1. Rising Consumption Trends of Oil Mill Business
- India’s per capita consumption of vegetable oil is around 19-20 kg per year, with an increasing trend due to population growth and lifestyle changes.
- Demand is driven by household consumption, food processing industries, and the hotel and restaurant sector.
- Changing dietary habits and health-conscious consumers are boosting demand for oils like olive, rice bran, and cold-pressed oils.
2. Major Consumed Vegetable Oils
Supply of Vegetable Oils in India
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Oil Type
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Share in Total Consumption (%)
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|---|---|
1. Domestic Production
- India produces about 10-11 million metric tons of vegetable oil annually, which meets only 40% of the total demand.
The major oilseed crops cultivated in India include:
Soybean (Madhya Pradesh, Maharashtra, Rajasthan)
Groundnut (Gujarat, Tamil Nadu, Andhra Pradesh)
Mustard/Rapeseed (Rajasthan, UP, Haryana)
Sunflower & Sesame (Karnataka, AP, Maharashtra)
Oil Palm (Andhra Pradesh, Telangana, Kerala)
2. Heavy Dependence on Imports
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India imports around 14-15 million metric tons of edible oils annually, mainly from Indonesia, Malaysia (palm oil), Argentina, Brazil (soybean oil), and Ukraine (sunflower oil).
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The import bill for edible oils is around ₹1.5-2 lakh crore per year, making it one of India’s largest food imports.
Make Your Own Vegetable Oil Production Business Plan
To establish an oil mill plant in India, start by creating a well-structured, tailor-made business plan. Before launching your oil extraction or refinery business, carefully develop a customized strategy to ensure success. Below is a sample business plan for an oil milling plant, which you can modify with minor adjustments to suit your specific needs.
1. Market Research & Business Plan
Before starting an oil mill, conduct detailed market research to understand the demand for different types of oils in your target region.
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Identify the most commonly used oils.
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Analyze competitors and pricing strategies.
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Understand government policies and taxation on edible oil businesses.
Once you have a clear market understanding, create a detailed business plan that includes investment, production costs, raw material procurement, and marketing strategies.
2. Create Business Project Report
A well-prepared project report is essential for securing financing from banks and financial institutions, including the One Belt One Road Policy Loan. This report should cover both technical and financial aspects. When outlining the technical details, specify the plant capacity, manufacturing technologies, raw materials, and the overall organization of the production process. Clearly define your business objectives. For the financial section, include fixed costs, working capital, expected sales revenue, and return on investment (ROI).
3. Investment & Profitability
The initial investment for a small-scale oil mill can range from ₹5 lakhs to ₹25 lakhs, depending on the production capacity and machinery. The profitability depends on:
Raw material costs
Oil yield per batch
Market demand and pricing
Operational efficiency
On average, an oil mill can generate a 25-40% profit margin, making it a Oil Mill Business in India.
Arrange The Investment
It’s great if you can start the business with your own funds. But if it’s not the case, you’ll need to get funds from
- Friends and Family
- Banks and NDFC
- Local venture capital firms.
- crowdfunding
- Angel Investors
4. Register the Business
To operate legally, you must register your oil mill under the required business structures such as:
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Sole Proprietorship
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Partnership Firm
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Limited Liability Company (LLC)
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Private Limited Company
Additionally, you need the following registrations and licenses:
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FSSAI (Food Safety and Standards Authority of India) License
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GST Registration
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MSME Registration (for small-scale industries)
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Pollution Control Board Clearance
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Trade License from Local Municipal Authority
5. Choosing the Right Location
The success of your oil mill largely depends on the location. Select a place that is:
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Close to raw material sources (e.g., mustard, coconut, groundnut farms)
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Well connected with transportation networks
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Equipped with electricity and water supply
6. Selecting Machinery and Equipment
Investing in the right oil extraction machinery is crucial for efficient production. Some of the key machines required are:
Boilers
Oil Refining Machines (if you plan to produce refined oil)
- Packaging Machines
Tip: Choose energy-efficient and automated machines from trusted manufacturers like Samtek Machinery for better performance and cost savings.
7. Procuring Raw Materials
Depending on the type of oil you plan to produce, procure high-quality raw materials such as mustard seeds, groundnuts, coconuts, or sesame seeds. Establish reliable supplier networks to ensure a steady supply at competitive prices.
8. Setting Up the Production Process
The oil extraction process generally involves the following steps:
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Cleaning – Removing dust, stones, and other impurities from seeds.
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Crushing & Pressing – Extracting oil using mechanical press machines.
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Filtration & Refining – Removing solid particles and impurities.
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Packaging – Storing the oil in suitable containers for distribution.
9. Quality Control & Compliance
Maintaining high-quality standards is essential for consumer trust and legal compliance. Regularly test your oil for:
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Purity and free fatty acid content
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Moisture and color levels
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Adherence to FSSAI and BIS (Bureau of Indian Standards) guidelines
10. Branding and Marketing Strategies
Creating a strong brand identity can help differentiate your oil products in the market. Some effective marketing strategies include:
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Online Marketing: Selling through e-commerce platforms, Own Website and social media.
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Retail Distribution: Partnering with grocery stores, supermarkets, and wholesalers.
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Packaging & Labeling: Using attractive and informative packaging.
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Local Promotion: Participating in trade fairs and exhibitions.
11. Hire Manpower
Oil production requires workers for working with the machinery as well and distributing the product itself. You will need to hire at least such positions as a production head, an accountant, marketing team, machine operators, store workers.
Conclusion
Starting an oil mill business in India requires proper planning, legal compliance, and investment in quality machinery. By choosing the right location, sourcing premium raw materials, and adopting effective marketing strategies, you can establish a profitable oil mill business. Investing in high-quality machinery from Samtek Machinery ensures smooth operations and maximum productivity.
Are you ready to start your oil mill business? Contact Samtek Machinery for expert guidance and top-grade oil extraction equipment today!
