Starting a mini oil mill business is an economical venture. One can make a decent income from this business and can gradually develop into a Profitable Business. Today we are going to discuss information on how to start this business and how much a mini oil mill project costs what are the opportunities in this business and the feasibility aspects of this business.
What is a Mini Oil Mill
A mini oil mill plant is a very small-scale unit that uses a small oil extraction machine to obtain oil from the seeds. This type of oil mill plant is relatively cheaper and economical to operate. Most of them use the cold pressing method for extraction.
They can be started within a small room and requires less manpower. In India, mini oil mills were locally referred to as Ganuga or Ghani and were common in villages and towns.
What are the Advantages and Disadvantages of starting a Mini Oil Mill?
- A mini oil mill can be easily started with little investment.
- Unlike, Refined oils which are altered, This type of extraction process ensures the customers can get quality Oil if they provide good raw material or the Business owner use quality raw material for processing
- The cost of the machinery is cheaper and requires very little space.
- They can be easily operated and has low maintenance.
- On average it costs 1-2 Lakhs for starting a mini oil mill It is one of the best home-based business ideas with less workers and investment
- Due to their small size, the oil extraction takes a little longer, hence you cannot satisfy if a large number of customers want the oil soon.
- small oil expeller machines are prone to get jammed often under heavy loads and they can even be tricky to clean
- Maintenance expenses for running wooden pressed oil macheniry can be bit high, as these machines use a wooden log for crushing the seeds and the wooden logs need to be from the best quality wood which can be costly and needs to be replaced three to four times a month to make sure the extraction takes place effectively. This replacements and maintenance costs can be a burden and show significant impact on profitability if not planned properly
The Different types of Mini oil press machines
There are different types of mini oil mill machines used for extracting oil. Some of them were very small similar to a a size of grinder that are capable of extracting 5 – 10 Liters of oil. These type of machines are mostly used for domestic purposes
Whereas cold pressed oil extracting machines are capable of extracting 10 – 15 liters per day. These type of oil machines are used for commercial purposes
Most of the commercial scale mini oil press machines use cold press techniques and plant running these machines are locally referred as Chekku, Ganuga or Ghani
How much does a mini oil mill machine cost?
The cost of the machine depends upon two things. Usage and capacity.
A mini oil mill for home use price starts around 20,000 rupees to 35,000 rupees. These types of oil maker machines are suitable for home usage and most of them come in a stainless steel material. On average they can extract anywhere between 5-10 Kg of oil.
You can get a decent mini oil press machine at an economical price range capable of pressing different type of things like mustard seeds, ground nut, sesame sunflower, and coconut, etc.
However, a commercial scale mini oil press machine can cost around 2-3 Lakh rupees. These types of machines are capable of producing 10 – 15 Liters per day. These are the best-suited machines if you want to start a mini oil mill business in your locality.
Things to consider before buying a Mini Oil Mill
Whether you choose an oil expeller for your domestic purpose or commercial purpose there are some common things you have to look at before buying
Capacity – Depending upon your production capacity and the number of customers you want to serve you need to decide an ideal capacity for the extraction machine. An over-capacity machine can be a financial burden, under capacity machine can consume a lot of time. Hence always first decide your budget and market demand before buying
Material – If you are buying a small oil machine for home usage, then look for food-grade stainless steel material. This way you don’t have to worry about rust, at the same time it is easy to clean.
On other hand, a cold press oil extracting machine needs to have the best quality iron material body, stainless steel inner drum and most importantly you need durable bearings and high-quality copper motor for running longer duration
Power – Most cold pressed oil machinery needs a 2-3 phase power connection to run the machines effectively
Automation Grade – Oil mill machines are available in two models automatic and semi-automatic. depending upon the budget and extraction process you can choose the desired product.
Automation grade Oil extractors can cost a little bit high and come with controls, whereas, Semi-automatic oil extractors need the supervision of a worker.
How Much a Mini Oil Mill Project Cost
Mini oil mill comes under small-scale industries. Their production capacity ranges from 10 – 15 Kg per day. A mini oil mill project costs less when compared to medium and large-scale oil mills. The project cost of a mini oil mill plant depends upon things like machinery, area, raw materials, workers, and miscellaneous costs. There can be still several things that we haven’t covered yet But these are some basic things that you need to ensure to cross-check when creating a mini oil mill project report
On average it can take 5 Lakhs initial investment to start a mini oil mill project, so here’s a detailed breakdown of the operating costs
Machinery plays important role in the oil extraction process. Depending upon the production capacity that you want to achieve you have to buy a suitable machine. Normally, an oil expeller machine with 10-12 Kg/hour can cost around 2 Lakh rupees
Mini oil mill can be set up in a small area with a room size of 120 Sq.ft that can easily fit 2 to 3 machines. If you have your own land then you don’t even have to worry about the rent. Whereas, if you want to lease then it would cost anywhere between 7000 – 8000 per month depending upon the locality
Oil press machines require a minimum 2-3 phase power connection to run efficiently. if you are using more than one machine then you may need to check the required power connection with the machine supplier.
Oil can be extracted using different types of seeds. The most commonly used seeds for oil extraction are mustard, groundnuts, sunflower, and sesame. Basing up on your budget and the demand for the oil in your area you have to select the appropriate raw materials.
You can either buy the seeds from the supplier or directly from the farmer. if you buy from farmers you can save more.
On average to produce 1 liter of ground nut oil requires 3 Kg of groundnut seeds
On average to produce 1 liter of mustard oil it requires 1 kg of mustard seeds
For Sunflower oil 2 kg of seeds give 1 liter of oil
Depending upon the machinery you are using and the type of extraction procedure the amount of raw material requirement changes
Mini oil mill plant requires very less manpower you can easily run the unit with just 1 to 2 workers for the entire extraction process.
If we consider 6,000 – 7,000 rupees per month then for two workers yearly, you need an average of 90,000 to 1,00,000 Lakh rupees. However, it again depends upon the locality and the number of tasks assigned to them
Packing and Storage material
You need certain packing and storage materials for your mini oil mil. Generally, Edible oil is stored in bottles and tins.
If you purchase in bulk number, you can save lot of money. A normal 1-liter PET bottle will be available for 5 rupees in bulk order. So, if you purchase 500 bottles initially, then it costs you 2500 rupees
The price of Oil tin containers depends upon their capacity. On average a 15Kg oil container will come at 65-70 rupees per piece if you buy in bulk
So, if you purchase 30 containers it costs you around 2000 rupees. In addition to that you also need to buy some extra storage materials like cartons, plastic wraps and sheets
So altogether it costs at least 7000 rupees initially for buying packing and storage material.
Distribution and Marketing
This is the most important part of the oil mill business. a good promotion and marketing can help you boost your presence in your locality and gain customers.
Some simple marketing tips such as giving ads in local channels or newspapers, and reaching out to popular Youtube channels can boost your presence.
When it comes to distribution, you need to have good connection with local shopkeepers and supermarket owners.
You can also get in touch with local restaurant owners and gain a contract to supply your products for their business.
You can also approach catering services that do weddings, events, and special occasions and introduce them to your business
So, Overall distribution and marketing can cost you a significant amount. In addition to that, you need to travel a lot which can cost you more fuel. However, securing your first customer is worth the effort.
Mini Oil Mill Profitability
Profit in the mini oil business depends on how you operate the plant. If you are going to completely process the seeds, pack the oil and distribute by yourself then you need to make sure to get the best quality raw materials, buy packing equipment and spend an extra amount on marketing and distribution. So the initial investement for this type of production is significantly high as you are all doing by yourself.
So, here the profitability factor depends on expected customers and total sales done per month and then you must compare it with the monthly expense.
On other hand, if you process the oil on demand, which means, if the customer provides the seeds and then you run the mill on demand bases then you charge certain amount per each Kilogram. In this method the total number of customers and the amount of oil processed influences your profitability
If you charge 40 rupees per Kg of Groundnut Oil, then if a customer brings 5 Kgs of Ground nuts you would charge 200 Rupees for oil processing
Let us suppose in the initial stages of business, if we consider you get 20 customers daily with 2 Kg to process on average per person and considering you charge 40 per Kg, then you would make 1,600 Rupees daily. This means you will make 40,000 rupees monthly
If we pay off all the expenses as estimated below your profit per month will be 20,000 rupees
|Total Processing Daily||40 kg|
|Amount you charge per each Kg||40 Rupees|
|Total amount daily (for processing 40 Kg)||1,600 Rupees|
|Monthly revenue (25 days)||40,000 Rupees|
|Salary for one worker||7,500 Rupees|
|Monthly Electricity Charges||3000 Rupees|
|Rent||8000 per month|
|Machinery Maintenance||1500 per month|
|Total Profit per month||20,000 Rupees|
From the above, we can expect an average of 20,000 thousand rupees and even more profit from a mini oil mill business. This amount may seem less for some, but it can provide a good living for those who were in towns and rural areas.