Edible oil is the product obtained through the extraction or pressing of oil seeds. As the demand for various types of edible oil increases, the edible oil production industry is continually improving and expanding. But how to make a successful commercial plan for an edible oil mill business? How to make a cost estimation? How to select the most suitable and cost-efficient equipment for your oil mill? Different land, operation scale, and the type of edible oil production you plan to engage in all result in different costs. If you don’t know this content, this post will guide you.
Reasons to Start a edible oil mill business
- It is widely used in cooking, baking, and frying processes.
- The enhanced awareness of edible oil promotes the market growth of edible oil.
- The raw material is enough and easy to get.
- The market demand is stable, and the profit space is large.
Key factors influencing the costs of the oil mill business
The raw material and capacity
When it comes to the cost of an edible oil mill, first you should confirm the raw materials and production you select. The equipment used for different raw materials and capacities is different. So the required cost is different.
Many different types of seeds and nuts can be processed to extract oil, such as peanut, sunflower, palm, cottonseed, sesame, soybean, etc. You should choose the raw materials that are easily accessible to you and that are available in your region. This could greatly reduce your cost. In addition, you should pay attention to the market of edible oil, finding out which types of edible oil are more popular, so that it is easier for you to sell them.
Recent developments indicate that there has been a significant increase in demand for some new oil types, such as palm oil, which accounts for 46% of the global total oil consumption. The second most consumed oil type is soybean oil, which makes up 26% of the global total oil consumption. These two types of oil account for more than half of the global total consumption. Therefore, the choice of raw materials for oil production can be based on this. The oil with a higher consumption rate is likely to have better sales prospects.
You also confirm capacity, according to the scale, the edible oil mill could be divided into three types:
- 1-20 tons/day small-scale oil mill plant
- 20-50 tons/day medium-scale oil mill plant
- 50-1000 tons/day large-scale oil mill plant
The process of extracting edible oil
Different oilseeds have different processes for extracting oil.
Cleaning: it is used to remove impurities and ensure the cleaning of raw materials.
Shelling: Shelling equipment is used to further crush oilseed. It makes the oil extraction process easier by exerting pressure. Some oilseeds may not need this step, such as sunflower, sesame, canola, etc.
Cooking: the oilseed is cooked and then pressed. If you adopt the hot press method, the oilseed will be heated before pressing, such as soybean, canola, sunflower, cottonseed, sesame, palm kernel, etc. If you adopt cold pressing, the equipment doesn’t need to be installed, such as olive, coconut, etc.
Extracting: after purifying seeds, the seeds separate as much oil as possible by physical pressing or solvent treatment.
Refining: the oil extracted is removed of impurities by refining, including decolorization and desalination steps. This could get oils that can be eaten directly.
Packing: the oil is packed in a bottle or packaged to maintain hygiene standards after refining.
The cost of edible oil mill business
Take 5-10tpd sunflower oil mill plant as example
| 5~10TPD Sunflower Oil mill plant | Reference Price |
| Seeds Cooker | $1,000 |
| Sunflower Oil Expeller | $1, 600 |
| Oil Filter Press | $1, 400 |
| Other Auxiliary Equipment (Cleaning Machine, Elevator, Spare Parts, etc. ) | $3,500 |
| Total | $7,500 |
Other factors influencing the costs of oil mill business
- Land and infrastructure: setting up an oil mill plant requires the factory’s land and the areas for storing raw materials and finished products. So the selection of land is very important. Because it could influence transportation cost, the availability of raw materials, and their distance from the market. Generally, the land prices in rural areas are lower than those in urban areas.
- Installation and setting cost: Installation is the next step after purchasing equipment. The complexity of the machine will affect the installation cost. For example, the small-scale oil mill needs manual equipment, and the installation cost is lower. The semi-automatic and fully automatic equipment require higher installation costs, which include transportation, labor, and setup expenses..
- Labor cost: the labor force is an indispensable part of running an oil mill business. Labor needs to process a series of operations, including pick up, processing, and packing. The number of laborers and the local wage level determine the labor cost.
- Running cost: once the oil mill plant is set up, a series of running costs will be incurred, such as water bills, electricity bills, fuel costs, and maintenance fees. Water and electricity bills, as well as fuel costs: it is used for the energy consumption of equipment and facilities. Maintenance cost: Carrying out regular maintenance of the equipment to ensure normal running.
| Item | Cost Range (USD) |
| Machinery and Equipment | $2,000 – $8,000 |
| Land and Infrastructure | $3,000 – $6,000 |
| Labor Costs (monthly) | $300 – $600 |
| Utilities and Operating Costs | $200 – $400 |
| Raw Material Costs (monthly) | $3,000 – $6,000 |
| Total | $6,000 – $14,000 |
Let us start a edible oil mill business
If setting up an edible oil business, one could make a plan and make appropriate investments, which would make it a long-term and profitable undertaking. The costs required for setting up an edible oil mill plant will vary depending on factors such as raw materials, scale, location, and technology. No matter whether you consider setting up a small-scale edible oil mill plant or a large-scale project, you can contact AGICO GROUP to obtain your personalized solution, which will help you succeed in the edible oil industry.
