How to Start Edible Oil Refinery Plant?

Sunflower oil in the bottle moving on production line

Edible oil is one of the most widely used commodities in Indian kitchens irrespective of season and occasion. With the increasing population in the country, the demand for edible oils is increasing day by day.

Market Demand

However, India mainly depends on imports to meet domestic edible oil demand due to insufficient production in the country. For instance, the demand for edible oils in India during 2019-20 was 24 million tons, whereas the domestic production was 10.65 million tons. And India imported around 13.35 million tons of edible oils during 2019-20 which was more than half of the domestic demand.   

Considering the huge supply-demand gap of edible oils, starting an edible oil refinery plant is a profitable business in India. More domestic production of edible oils would also help to reduce the prices in India which eventually benefits the consumer.  

In this context, let us have look at the sector. Starting an edible oil refinery plant involves extensive assessment of raw material required, type of machinery licences, cost of investment, major players, etc.  

Raw Materials

Various types of seeds are used to extract the oil. The seeds required depend on the type of oil you are planning to refine, . Or it can also be the other way around, where you decide the type of oil to refine depending on the availability of raw materials.

Different Types of Vegetable Oil Refinery Plants

Being a diverse country, a wide range of edible oils such as mustard oil, corn oil, sunflower oil, olive oil, palm oil, coconut oil, corn oil, etc. are used in India. Some of the major vegetable oil refinery plant business ideas in India include:       

Mustard Oil Plant Setup

Mustard oil is obtained from grinding the mustard seeds. Mustard oil contains 884 calories of energy per 100 grams, making it a nutrition-rich food product. It is widely used across many parts of the country as a cooking oil. Therefore, a mustard oil refinery is a popular business idea in India.

Corn Oil Refinery Plant

Coil oil is preferred as cooking oil for health-conscious people because of its less cholesterol content. It is very cost-effective when compared with other cooking oils. Apart from cooking, it is also used in the manufacturing of paints, soaps, inks, etc. So, the corn oil refinery plant is a potential business idea with great potential.     

Sunflower Oil Refinery Plant

Sunflower oil is the most popular edible oil in India. It is obtained from crushing the sunflower seeds, a crop which is very well grown across the country. It is also cheaper than many other vegetable oils. It has very good demand from people of all sections, which sunflower oil refinery a profitable business idea.

Palm Oil Refinery Plant

Palm oil is another popular edible oil used in the country. It is extracted from palm fruits. It is very popular among the masses of the country due to its cost-effective nature. Palm oil is well known for its high heat resistance and oxidative stability.

Coconut Oil Refinery Plant

Coconut oil is widely used in coastal areas of India where coconut trees are largely grown. Coconut has a lot of health benefits such as anti-fungal and anti-microbial properties, hair damage protection, prevention of dental caries, etc. which make it the first choice for many people, particularly in South India.

 

How to start edible oil refinery

Machinery Required

A wide range of machinery is used in the edible oil refinery depending on the kind of the plant, such as:

  • Thermic Fluid Boiler
  • Steam Generator
  • Screw Expeller
  • Oil Presser
  • Oil Filters
  • Vacuum Pump
  • Storage Tank
  • Box Stamping
  • Barometric Condenser  
  • Weighing Scale
  • Sealing & Packing Machine

Licences Required

You would require many licences and certifications to start an edible oil refinery plant and sell oil of which some are mandatory and others are voluntary. The licences issued by FSSAI and BIS from the Government of India are mandatory for all kinds of food-related businesses including the oil refinery. Apart from these, state governments also issue different certifications and licences.       

Investment to Start Edible Oil Refinery Plant

The investment required to start edible oil refinery plant depends on the capacity of the plant, type of machinery, method of oil processing, etc. The minimum investment to start edible oil refinery plant in India ranges from 20-30 lakhs.         

Major players

Some of the major edible oil refining companies in India include Ruchi Soya Industries, Gokul Agro Industries, Gujarat Ambuja Exports, Vijay Solves, BCL Industries, etc. Apart from these, there also exist many small players in the sector. Considering the availability of raw materials in the country, edible oil refining is a potential sector for MSMEs to explore.       

Government Schemes

Entrepreneurs with minimum investment can setup edible oil plant in the government-designated agro-processing clusters. As a part of the Scheme for Creation of Infrastructure for Agro-Processing Clusters, the government already sanctioned more than 60 clusters across the country. Entrepreneurs setting up oil refinery units in these clusters will get all the basic and core infrastructure required to start operations. In addition to the infrastructure, the government also provides grants upto 35% for entrepreneurs in general areas and upto 50% for entrepreneurs in North East states, ITDP and UTs (Max 10 crore) in the total project cost. Apart from this, entrepreneurs can also avail benefits from the government from other schemes like ODOP, etc.  

Having said that starting edible oil refinery plant is easier said than done. Moreover, applying for the government schemes and availing benefits is not so easy without assistance from experts.

Register Now

If you are planning to enter into vegetable oil refining and start palm oil refinery unit or any other edible refinery plant, kindly register with SolutionBuggy. Our expert manufacturing consultants help you in setting up the edible oil refinery plant by availing the benefits from the government schemes. We assist you right from market research, product formulation, DPR, certifications, government approvals and plant setup to packaging, business development and supply chain management.

FAQs

As the domestic supply of edible oils is less than the domestic demand, starting an edible oil refinery plant is a profitable business idea in India.

The raw materials required for oil refining are the oil seeds and fruits such as sunflower, groundnut, palm, olive, mustard, etc.

The machinery required for vegetable oil plant include, thermic fluid boiler, steam generator, screw expeller, oil presser, oil filters, vacuum pump, storage tank, weighing scale, sealing & packing machine, etc.

Some of the major players in the edible oil refinery segment are Ruchi Soya Industries, Gokul Agro Industries, Gujarat Ambuja Exports, Vijay Solves, BCL Industries, etc.

The investment required to start edible oil refinery plant with minimum capacity is 20 lakhs.

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