Canola Oil Project Report – Business Plan

Introduction to Canola Oil Project Report, Manufacturing Business Plan: Canola oil is not only one of the harmless forms of plant-derived oils on the globe but is also one of the oldest forms of fuel agents used by people. The legacy of canola oil is from around 4,000 years when the first known cases of rapeseed use were evolved in India. The cultures of Japan and China were also adopted in the beginning years around 2,000 years ago before the oil became famous in Northern Europe during the 13th century. Canola plays an important role in saving the lives of billions of people as it reduces the LDL content in the body.

Canola Oil is an edible vegetable oil that is extracted from a variety of rapeseed. It has a low percentage of erucic acid compared to colza oil. Canola Oil also has industrial uses and based on the requirement and demand both edible and industrial forms are produced. There is a huge number of cultivars of both industrial and edible forms of Canola Oil.

Uses and applications of Canola Oil: The use of Canola Oil for cooking has increased because of its health benefits. It is mostly used in the preparation of various food items like

  • Coffee whiteners,
  • Salad dressings,
  • Cake mixes, 
  • Salad dressings, 
  • Shortening, 
  • Cooking sprays, 
  • Bread making, 
  • Buns preparation, 
  • Fried snacks, etc.                                           

Apart from the food industry it also has a huge number of industrial uses. It is used in the areas of biofuels and oleochemicals. In biofuels, it is used in the preparation of biodiesel, bioplastics, etc. Canola Oil has high energy content and remains in a liquid state even at low temperatures and hence it is mostly preferred as biodiesel.

A Guide to Canola Oil Project Report, Manufacturing Business Plan

Canola Oil Manufacturing Business
Canola Oil Manufacturing Business (Image credit: pixabay)

Health benefits of Canola Oil: Most people in the world prefer Canola Oil in their regular diet because of its health benefits. The fatty acid content has low 7% saturated fat and more amount of monounsaturated fatty acids with the highest percentage of omega-3 and omega-6 fatty acids. This lowers the cholesterol level in the human body. Hence, most of them prefer Canola Oil in all cuisines. It is also rich in antioxidants such as Vitamin E, which protects the body from the harmful effect of free radicals. Considering all these benefits Canola Oil has become the third-largest consumable vegetable oil after soybean and palm.

Market potential of Canola Oil Manufacturing Business

Canola Oil market demand is increasing day by day because of its enormous health benefits and industrial uses. The market potential of Canola Oil is expected at 31.8 million USD in 2021. It is also estimated that it might reach 44.5 million USD by the end of the year. Canola Oil market has an enormous growth rate CAGR of 8% throughout 2022-2028. This huge increase in demand is because of the highly nutritious content in it. It has a different composition of fatty acids compared to other oils. This increases the demand for Canola Oil in the coming years.

Business plan for starting Canola Oil Manufacturing Business

To start the profitable Canola Manufacturing Business, you need to craft a perfect business plan to make it a successful one.

  • Implementation schedule
  • List of approvals required
  • List of machinery required
  • Manufacturing process
  • Project economics
  • Benefits of starting Canola Oil Manufacturing Unit

Implementation schedule of Canola Oil Manufacturing Business

  • Market analysis and information on the scope of business, product demand, power provision, water facility and necessary raw materials, etc. 0-1st month
  • Preparation of business plan 1st – 2nd month
  • Financial support or investment 2nd– 4th month
  • Selection of location and development of unit 3rd– 4th month
  • Power and water connection facility
  • Building construction and shed development 4th– 6th month
  • Machinery and equipment purchase 4th– 6th month
  • Obtain raw materials and recruitment of manpower 7th– 8th month
  • Trial operations 9th month

List of approvals required to start Canola Oil Manufacturing Business

While setting up your, your primary step should be the registration of your firm with ROC. This registration could be done based on the capital, size, and management pattern of your business. You can opt for a partnership or a proprietorship company.

A trade license must be acquired from the Local Municipal Authority and Udyog Aadhaar Registration is available on the portal of MSME. You must also get a commercial power connection for your unit.

  • Registration of firm
  • GST registration
  • ROC
  • Shop Act License
  • FSSAI License
  • IEC Code
  • Export License
  • Fire and Safety
  • ESI
  • PF
  • No Objection Certificate from pollution board
  • Trade license from local municipal authority

List of machinery required for starting Canola Oil Manufacturing Business

To start Canola Oil Manufacturing Business, you need the following basic machinery:

  • Seed cleaner,
  • Seed cooker,
  • Oil press,
  • Filter press,
  • Steam boiler,
  • Screw conveyor and 
  • Bucket elevator

The manufacturing process of Canola Oil

In case if you miss this: Palm Oil Manufacturing Project Report.

Canola Crop
Canola Crop (pic credit: pixabay)

The manufacturing process of Canola Oil is simple and similar to other edible oils. In this process, the Canola Oilseeds are collected and converted into oil and meal cake. Seeds are collected, processed, and pressed to collect the oil and oil cake separately. The next step is refining and processing into finished goods which are ready for marketing. 

Canola seeds are collected from the Canola plant farms. These belong to the Brassica family (Brassica napus, Brassica rapa, or Brassica juncea). The oil extracted from these families contains a mixture of 2-hydroxy-3 butenyl glucosinolate, 4-pentenyl glucosinolate, 3-butenyl glucosinolate, and 2-hydroxy- 4-pentenyl glucosinolate per gram of air-dry, oil-free solid.

Establishment of Canola Oil Manufacturing Plant/Unit

Below are the steps involved in manufacturing of Canola Oil-

Step 1: Seed cleaning

The collected Canola seeds are cleaned and separated to remove impurities like stems, leaves, dust, metal, etc. This cleaning process improves the quality of the oil and oil loss, increases the oil yield and the quality of meal cake. If the seed cleaning is not done properly then it causes equipment friction and leads to unsafe operations.

Step 2: Seed cooking

The seed cooking process is an important step in the extraction of Canola Oil. It helps to-

  • Level the moisture content to an optimum in the meal cake.
  • It ruptures the cell wall which helps in the easy extraction of oil.
  • Reduces the viscosity of the oil.
  • Coagulates the protein content in the seed cake which helps to separate the oil.

Step 3: Canola seed pressing/ Canola Oil pressing 

There are two methods in Canola Oil pressing. These include Solvent extraction and Mechanical Press. In the Mechanical press method, the cooked Canola Oilseeds are pressed by using Screw Press or expellers. This process has high value as it doesn’t involve any chemicals to process. The oil cake contains 5-7% of oil. This can be subjected to the solvent extraction method for further extraction of oil.

Step 4: Solvent extraction

Recently, the solvent extraction method has gained popularity because of its high yield. This rapidly developed solvent extraction method has a separate unit in which the seeds are first subjected to pre-pressing and later it is followed by cleaning, flaking, steam cooking or conditioning, pressing. This pre-pressed meal cake contains about 16-19% of oil and is then processed by the solvent extraction method to bring down the percentage of oil content from 19% to less than 1.5%.

This kind of combined yield of the pre-pressing and solvent extraction process gives the highest percentage of oil than the mechanical extraction method. But the oil produced by the pre-pressing and solvent extraction method contains few chemicals like isothiocyanate, peroxides, colloids, etc. which affects the taste and quality of the oil.

Hence, it is better to opt for high pressures and steam cooking temperatures to improve the oil yield in the Screw pressing method. The recent launch of the GOYUM screw press has advanced technology for processing Canola seeds to extract good quality Canola Oil.

Step 5: Canola Oil filtration

The Canola Oil extracted from the Screw press method contains some suspended solids which have to be removed to get the pure product. Hence, the oil is transferred to the screening tank or filtration tank for preliminary separation of suspended particles. This pre-cleaned oil is then transferred to a vertical pressure leaf filter for the final filtration of Canola Oil. This oil will be free from all the suspended particles and hence it can be sent for the further refining process.

Step 6: Canola Oil refining process

The crude Canola Oil contains few substances like sterols, waxes, water, phospholipids, aromatic compounds, oxidation products, free fatty acids, pigments, etc. This will affect the quality and the duration of the product. Hence, there has to be removed from the oil to get a purified one with desired quality. The crude oil is sent for refining process which involves- 

  • Degumming,
  • Neutralization and water washing,
  • Bleaching,
  • Winterization,
  • Dewaxing,
  • Deodorization

These processes will make the Canola Oil fit for consumption. 

Canola Oil Project Report/ Economics of Canola Oil Manufacturing Business in India

You may also check this: Mustard Oil Manufacturing Project Report.

Economics of Canola Oil
Economics of Canola Oil (Image credit: pixabay)

Land and Building: Rs. 5,50,000

Plant and Machinery: Rs. 2,70,000

Miscellaneous Assets: Rs. 55,000

P&P Expenses: Rs. 40,000

Contingencies @ 10% on Land and Building and Plant and Machinery: Rs. 80,000

Working Capital Margin: Rs. 1,35,000

Total: Rs. 11,30,000.

Means of finance:

Promoters’ Contribution @ 25 %: Rs. 2,80,000

Loan from Bank/FI: Rs. 8,50,000

Total: Rs. 11,30,000

Debt Equity Ratio: 1.96 : 1

Promoters’ Contribution: 25%.

Working capital calculation:

Raw materials/ Packing materials: Rs. 1,70,000

Working expenses: Rs. 1,00,000

Finished goods: Rs. 1,00,000

Receivable: Rs. 80,000

Total: Rs. 4,50,000

Cost of Machinery

Table Ghani 1: Rs. 70,000

Oil Expellers 2: Rs. 80,000

Filter Press 1: Rs. 60,000

Other Support Equipments, electric motor and testing facilities: Rs. 60,000

Total: Rs. 2,70,000.

Profit in Canola oil making business in India:

Sales price of Canola Oil: Rs. 32,16,000

Sales price of De-oiled Cake: Rs. 4,44,000

Total: Rs. 36,60,000

Profits in Canola oil making business = Sales – Project cost = Rs. 32,60,000 – Rs. 28,80,000

= Rs. 7,80,000.

Benefits of setting up Canola Oil Production Business

There is an old belief that huge capital is required to begin an oil plant. But it’s not true for small-scale oil extraction units. You can start this business as a two-room building having moderate investment. The business does not require expensive machinery as well and you can install them in a small place. A small oil plant is an excellent opportunity for budding businessmen.

Financial independence is the main reason plan to work in the oil processing business. Everyone seeks financial freedom. This is accompanied by abundant returns, old age safety, and the capacity to purchase whatever you desire.

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