How To Start Vegetable Oil Business In Nigeria

Vegetable Oil Business In Nigeria
Vegetable Oil Business In Nigeria

Edible vegetable oil is oil produced from any of the edible oil bearing seeds that exist in nature. Many of these seeds are produced in large quantities in Nigeria. Amongst them are: groundnut, oil palm fruit, soybeans, cotton seed, sesame seed, melon seed, etc.

Vegetable oil business is a business of many parts. The cake gotten as a by-product from delivering vegetable oil from soya-bean is utilized for domesticated animals. Particularly for steers, sheep and poultry.

The present production level of Vegetable Oil in Nigeria cannot meet the ever-increasing demands of Nigerians for high quality vegetable oil. Recently, a ban has been placed on the Importation of Vegetable Oil into the country by the federal government with the aim of encouraging local production and marketing of vegetable oil in the country.

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Vegetable oil is consumed every day, as the population increases so also the rate of consumption. Meanwhile, the quantity of vegetable oil produced is not sufficient for the masses because it cannot meet the demand of Nigerians.

The ban placed by the Federal Government on the importation of vegetable oil into the country has helped to quicken the sales of the product. This also has widened the space for investors to invest. But more investors are encouraged to take up this business not only to satisfy demand but also to create employment for thousands of people.


Different oil-bearing seeds are produced in Nigeria, this includes groundnut seed, cottonseed, palm kernel nut, soybean seed, castor seed, shea nut, melon seed etc. The market for groundnut oil and the cake is large. This write up therefore, will focus on the processing of groundnut into oil and cake. Although the production process is almost the same for almost all the seeds with just slight differences in the production line.

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  • Seed fryer
  • Oil expeller
  • Oil refiner


  • Weighing machine
  • Containers
  • Drum


Electrical seed fryer: it roast crushed nuts. The fryer heats up the crushed nuts and stir up the oil molecule content from the nut for it to start action.

Oil expeller: after the crushed buts has been successfully heated, the press nut is applied on it to expel oil out from it. The oil will come out from the oil exit chamber and the cake is collected from the cake exit.

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Oil refiner: it refines and purifies the extracted oil by removing the free fatty acid content of the oil, bleaches the colour of the oil and establish its natural flavour.


It has high demand which are not always me
The business is very profitable
It is sustainable because of the rise in population
Many people are yet to venture into vegetable oil production so the business is not yet saturated
The materials (seeds) for the production can be gotten locally.


For a small/medium scale mechanized groundnut oil mill, the start-up capital is between five to six million naira. This will cover the cost of land, construction, furniture, procurement and installation of machinery, vehicle and operational expenses.

A ton of groundnut oil goes for #150,000
Process vegetable oil is #60,000 per kilogram
Cake is #85 per kilogram
Sludge is #40 per kilogram

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A ton of viable groundnut will produce 430 litres of oil. On the average that is about 2 and half drums. The cake will be about 420kg and the sludge 40kg.
This means a ton of groundnut oil multiply by the litres or number of drums
Therefore 2.5×60,000=#150,000
Cake will be 85×420=#35,700
While sludge will be 40×40=#1,600
Total will be 150,000+35,700+1,600=#187,300
Assuming you spent #7,000 on miscellaneous then you will be left with
187,300-(150,000+7,000) that is amount sold minus expenses


Oil press #450,000
Seed fryer #480,000
Oil refiner #500,000

Note: These prices are subject to change.

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Sell to market traders, supermarkets, wholesalers, shops, hotels, restaurant, distributors etc. Look for the cake, feed mills are their major patronisers. Look out for one in your location and supply. After that they will be the ones booking down or paying in advance. In other to get regular supply. Another way is to sell the oil to entrepreneurs who buys in large quantities and then package it themselves according to their own packaging materials and company name (container, label).


It is not every groundnut that brings out oil in volume because we have different kinds of groundnut. Find out the type that is used from those who have experience or are already in the business


If you cannot start groundnut oil production then you can start palm kernel oil production.

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You can produce and sell your palm kernel oil to vegetable oil refineries in Nigeria. You don’t have to wait until you have equipment for production because the cost of setting up vegetable oil production plants is very expensive. Buy palm kernel nuts take them to millers let them expel and press the oil out for you. Fill the oil in drums or gallons and sell to buyers who are constantly in need of it. Refiners need minimum 100 tonnes of vegetable oil every day for export.

A ton of good Palm kernel nut will produce 450 litres of oil. And a ton of oil goes for #180,000 while cake is #25,000 per ton

As earlier said to set up complete plants for large production is capital-intensive of course there is no small-scale production when it comes to vegetable oil. And they must produce daily to meet up with demand. That is why they will constantly demand for both kernel nut and oil to meet up with demand.


The quality of the oil must be very dry because wet nuts will reduce the volume of the oil. The nuts should be unshelled.

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Due to the increase number of low and middle level earners in Nigeria, refined oil now sells faster than groundnut oil because the palm kernel oil is cheaper than groundnut oil. Palm kernel goes for #330 a litre while #500. Palm kernel oil is free of cholesterol and is tripled filtered.

There are 3 ways you can do palm kernel business. They are;

  • Buying and selling of kernel nuts
  • Expelling of kernel oil and supplying to refiners
  • Expelling of the oil and refining them yourself


Whichever seed you chose to process will give you good profit. We have all the raw materials needed for vegetable oil production business and locally manufactured machines to get you started. So start yours today.

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