Starting a groundnut oil production business in Nigeria is a wise choice considering how much Nigerians love and use groundnut oil. It's not just about cooking. This oil is popular for its rich flavor and health benefits. Imagine becoming your go-to person for this important household item. Not only is it valuable, but it can also yield a significant profit.

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Then, sourcing quality groundnuts is your next step in your journey to start an edible oil manufacturing business, as they're the main ingredient in your oil production. After securing your supply of groundnuts, setting up your production space is the next task.

Remember, it doesn't have to be big or fancy to begin with. Lastly, getting the word out about your high-quality groundnut oil is crucial for your business's success. Each of these steps is a key milestone on the path to building a thriving edible oil manufacturing business

So, are you ready to dive into the groundnut oil production business? Let's break down these steps one by one and get you started on this exciting journey.

Market Research

Before diving into the groundnut oil business, take a closer look at Nigeria's market. It's bustling and growing, with many key players and specific tastes from consumers.


As per Data Bridge Market Research, in 2021, the worldwide peanut oil market was valued at a remarkable USD 2.40 billion, and it is expected to reach an even higher USD 3.28 billion in 2029. This corresponds to an encouraging yearly growth rate of 4.00%, suggesting a potentially robust market

Now, let's delve deeper into the specifics of the Nigerian groundnut oil market.


Building on the promising outlook, Nigeria's peanut production is on an upward trajectory, with FAS Lagos projecting a 7 percent increase to 4.8 million metric tons in MY 2023/24, from the previous year's 4.5 million metric tons. This growth is attributed to the crop's resilience to drought and efficient water use, making it an increasingly popular choice among Northern Nigerian farmers facing erratic rainfall patterns.

Strategic inclusion of groundnut in crop rotations benefits from minimal fertilizer requirements and optimal response to direct application, further increasing production. Harvested area is expected to increase by 3% to 3.5 million hectares, with farmers particularly in the less conflict-affected regions of northern and southern Nigeria poised to benefit from higher demand and premium prices. Food processors benefit feed manufacturers.

This increase in production, accompanied by a 9% increase in groundnut consumption, which is projected to reach 4.9 million tonnes in the 2023/24 financial year, will be a major challenge for aspiring entrepreneurs in Nigeria's edible oil manufacturing sector. This highlights the resilience and potential of the groundnut oil market.

Business Planning and Registration

When building your peanut oil business, it's important to determine your goals and know who you want to sell to. What makes your oil special? This is your unique advantage. Next, decide how you want to run your business. Three basic possibilities exist, each having pros and cons of its own.

  • Sole Proprietorship
  • Partnership
  • Limited Liability Company (LLC)

Must be registered with the relevant authorities to officially operate. The key agency in Nigeria is the National Agency for Food and Drug Control (NAFDAC). Guarantee food safety and quality.

NAFDAC registration requires certain procedures and fees. For further advice, please visit our website or speak to a business consultant. Remember that obtaining all necessary licenses and permits is essential to operating a legal and compliant business.

Steps and Equipment for starting a Groundnut Oil Production Mill

Getting your groundnut oil production process rolling involves a few key steps, incorporating essential techniques of oil extraction. Here's a simplified breakdown of how to do it:

Cleaning : Start by thoroughly cleaning your groundnuts to remove any dirt or stones, ensuring the seeds are pristine. This step, known as cleaning seeds before pressing, is crucial because clean nuts are the foundation of clean, high-quality oil.

Roasting : Next, roast the groundnuts. This step brings out the rich flavor and makes the oil extraction easier.

Pressing : Now, it's time to press those roasted nuts using a seed crushing machine or a hand press. This crucial step squeezes the oil out from the nuts, marking the heart of your oil production process.

Filtering : After pressing, you'll get oil mixed with some small particles. Filter this oil to make it clear and pure through a filter press.

Storing : Finally, store your oil in clean storage tanks. Make sure the tanks are dry and airtight to keep the oil fresh.

For equipment, you'll need a cleaning machine, a roaster, an oil press, and filters. You don't need big, fancy machines to start; simple, small-scale equipment works just fine for a start-up.

Building and Managing a Team

To start your groundnut oil business in Nigeria, creating a strong team is essential. Here's an easy-to-follow guide to get you started:

Identify Your Needs : Think about the tasks in your business, like making the oil, checking its quality, and selling it. Decide what skills are needed for each task.

Find the Right People : Look for folks who have the skills your business needs. You'll need people who know how to handle the machines, who can ensure the oil is good, and who can get customers interested.

Train Your Team : Once you've got your team, teach them how to do their jobs the best way. This includes everything from operating machinery to maintaining cleanliness.

Focus on Safety : It's super important that everyone knows how to keep safe while working. This means knowing what to do in emergencies and how to avoid accidents.

Keep it Cleans : Show your team the importance of cleanliness, both in the production area and personally. This is crucial to make sure your groundnut oil is safe and of high quality.

Cost to Start a Groundnut Oil Production Business

Starting a groundnut oil business in Nigeria, or establishing a groundnut oil mill, involves certain costs that you need to consider to plan your investment properly. Here's a straightforward breakdown of what you might expect to spend:

Groundnut Seeds : This is your main ingredient. The cost depends on how much you buy and the market price, but starting small could keep this cost lower.

Equipment : You'll need a roaster, an oil press, and filters. Basic, small-scale equipment might not be too pricey, but it's crucial for making the oil.

Rent : If you're not working from home, you'll need a place. Rent varies widely depending on location.

Licenses and Permits : Getting the necessary approvals, like from NAFDAC, involves some fees. These are essential for running your business legally.

Labor : Paying your team is a big part of your costs. It depends on how many people you hire and their roles.

Marketing : Getting the word out about your oil might need some budget, especially for online or local ads.

Here's a simple table to summarize:

Expense Category Estimated Cost (Naira)
Groundnut Seeds Variable
Equipment $100,000 - $500,000
Rent $50,000 - $200,000/month
Licenses/Permits $20,000 - $100,000
Labor Variable
Marketing $10,000 - $50,000

These are tentative estimations intended to give you an idea. Prices can change, so it's smart to do your own detailed research and planning.


In conclusion, starting a groundnut oil mill plant in Nigeria is a journey full of opportunities. Remember, it all starts with choosing the best peanuts and making sure they are clean and in a good condition. Choosing the right edible oil plant manufacturer is important to have reliable and efficient machinery for your business.

It is important to use the right equipment to extract this pure and delicious oil. As a leading edible oil extraction plant and edible oil refinery manufacturers, N&T Engitech can provide you with the quality machinery you need.

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Riyaz Tunvar

Riyaz Tunvar is a seasoned Director at N&T Engitech Pvt Ltd, specializing in sales and marketing for industrial plants, refinery, and machinery manufacturers. His deep understanding of the sector, combined with his customer-centric approach, has played a vital role in positioning N&T Engitech as a trusted name in the market.

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