ESTABLISHING AN OIL SEED EXTRACTION PLANT

• Manufacturing
• Edible oil products

Introduction
Seed oil falls under the category of high value products and the demand for it keeps growing .The market size is big as it is used in almost every household. The project idea is designed with an aim of producing
39,000litres of seed cooking oil with an estimated operating costs of 89,150US$, generating a revenue of 900US$ in the first year of active operations.

Production Capacity, Technology & Process
The production process involves drying and cleaning oil seeds to remove foreign materials like stones, sand and sometimes it is washed to remove dirt. The outer coat is removed through a process called de-hulling and then grinded using small motor powered hammer mills. The broken down components are passed through the expeller where they are heated to kill enzymes .The oil collects at the bottom of the expeller and then it is filtered and stored in the storage tank and packaged. The technology used is very simple as it involves drying, cleaning, crushing, heating and filtering.

Market Analysis
The market is wide as oil is a household item with major consumers such as hotels, restaurants, retail & wholesale shops.

Investment Scale and Capital Requirements Equipment
The investment scale varies according to the intended objectives of the entrepreneur and the production capacity of the equipment used.
Capital Investment Requirements in US$

Item	units	Qty	unit cost	Total
Moisture tester	No.	1	500	500
Huller(Dis integrator)	No	1	900	900
Seed Cleaner	No	1	500	500
Oil expeller	No	1	800	800
Filter press	No	1	3,500	3,500
Oil tank	No	1	300	300
Weighing scale	No	1	200	200
Steam pipeline	No	1	200	200
Delivery Van(2.5 tones)	No	1	10,000	10,000
Other tools	No	-	-	3,500
Total	20,400

 

Production and Operating Costs
Direct materials, Supplies and Costs

Cost Item	Units	Unit cost	Qty/ day	Prod cost/ day	Prod cost/ month	Prod cost/ yr.
Direct Costs
Seeds (Sunflower, cotton, ground nuts, Soybeans)	kgs	0.85	189	161	4,177	50,150
Packaging materials	Pieces	0.05	48	2	62	750
Other materials	kgs	-	-	-	213	2,550
Sub-total			237	163	4,452	53,450
General Costs(Overheads)
Rent	600	7,200
Labour	617	7,400
Utilities	833	10,000
Selling & distribution	308	3,700
Cleaning & Toiletries	104	1,250
Miscellaneous expenses	88	1,050
Depreciation	425	5,100
Sub-total	2,975	35,700
Total Operating Costs	7,427	89,150

Project product costs and price Structure

Item	Qty/ day	Qty/yr.	Unit Cost	Prod cost/yr.	Unit price	Total revenue
Seed Oil	125	39,000	2.29	89,150	3.1	120,900

 

1) Production costs are assumed for 312 days per year with daily capacity of processing 125 litres of seed cooking oil.
2) Depreciation (fixed asset write off) assumes 4-years life of assets written off at 25% per year for all assets.
3) Direct costs include: materials, supplies and other costs that directly go into production of the product.
4) Total monthly workdays assumed are 26-days.

Profitability Analysis Table

Profitability Item	Per day	Per Month	Per year
Revenue	388	10,075	120,900
Less: Production and Operating Costs	286	7,429	89,150
Profit	102	2,646	31,750