Coconut Oil Manufacturing Project Report

Coconut Oil Manufacturing Project Report, and Business Plan


Hello friends, today we are here with a new topic called “Coconut Oil Manufacturing Project Report and Business Plan”. Coconut Oil is extracted from coconuts by cooking the decorticated and granulated coconuts with good oil content. In the temples, devotees will offer coconuts, and large quantities of coconuts are gathered. Those coconuts are for offering to the Gods and after that, they are decorticated first and then granulated for preparing sweet but at present times these coconuts are sold to certain parties and the money is used by the temple for its development. These people are using these collected coconut and extracting coconut oil from granulated coconut and the de-oiled coconut powder is being used for sweets with sugar syrup. 

A guide to Coconut Oil Manufacturing Project Report and Business Plan

Market potential of Coconut Oil Manufacturing Business

In India, Coconut oil is used as massaging oil before going for a bath. It’s light in weight, low viscosity, and of sweet fragrance, and preferred for massaging. Coconut oil is mixed with other components like henna, Triphala, Shikakai, synthetic essence to manufacture hair oil. Though commercial preparation of coconut oil in some parts is not viable when compared with the one in Karnataka, Kerala, but in the present scheme raw coconut is obtained at a reasonable cost, which will aid the entrepreneur to prepare it for commercial purpose by mixing it with scented coconut oil. 

Basis and presumptions of Coconut Oil Manufacturing Business

1. Eight hours per day and 300 days per year could be the working period.

2. 15% of oil is gathered from the coconuts procured in the temple.

3. The unit can be arranged in a rental location and oil can be collected manually.

4. Blending and packaging are performed with machines.

5. 12% ROI (Rate of Interest) could be expected on total capital investment. 

Implementation schedule of Coconut Oil Manufacturing Business

  • Develop the project report and registration in 1 month
  • Procure the investment in 3 months
  • Purchase the equipment and machinery in 1 month
  • Appoint staff and trial operations in 1 month

List of registration, license, and permissions required for starting Coconut Oil Manufacturing Business

Coconut oil is even an important food product, and the business demands various registrations and approvals before starting only. These licenses are commonly based on the location where you intend to initiate the unit. However, it is recommended to contact nearby small business experts and tax consultants.

  • First, you have to think about the management design of your business. And then plan to register accordingly under ROC.
  • Next, apply for MSME Udyog Aadhaar that can be done online.
  • Then, the essential trade license must be gained from the local municipality.
  • The business comes is classified under the food processing category and thus should get FSSAI consent and could be acquired online.
  • Presently, it is mandatory to apply for GST registration.
  • Open a current account in nearby banks.
  • Then it is essential to apply for the BIS certification. The Bureau of Indian Standards specification for this item is IS 966:1962. The product should abide by the PFA Act, guidelines
  • Besides, it is important to verify the tax liabilities too for this business.

Raw materials required for starting Coconut Oil Manufacturing Business

Raw Coconut
Coconut (pic source: pixabay)

Properly dried copra having a moisture content of around 6% is the best raw material for coconut oil preparation. Usually, the standard of coconut oil is dependent on the quality of the copra.

The machinery required for establishing Coconut Oil Manufacturing Unit

Some of the machinery is necessary for various operations. The machinery is required for the manufacturing steps, also dependent on the raw material used, the specificity of the required yield, and the investment capacity of the entrepreneur. Here, we have included a few general and essential machinery required for coconut oil manufacturing.

  • Copra Cutter
  • Screw conveyor
  • Bucket elevator
  • Filter press
  • Crude coconut oil storage tanks
  • Steam jacketed kettle
  • Oil expeller
  • Wooden storage drums
  • Baby boiler
  • Microfilter
  • Filtered oil storage tanks
  • Volumetric filling machine

Coconut oil manufacturing process

Firstly, the edible oil is obtained from matured contents (or) kernels that are acquired from the coconut palm. Below you will see few steps included in making virgin coconut oil. 

Step -1: De-husking of coconut

In this stage, by using the coconut de-husking machine, the husk is will be acquired manually.

Step -2: De-shelling of coconut

Here, the coconut shell will be separated without breaking the kernel.

Step -3: Paring of coconut

In this process, the brown skin of the kernel is removed with a paring machine.

Step -4: Blanching of coconuts

In this stage, the pared coconuts will be submerged in boiling water for some period in a blanching tank.

Step -5: Draining of coconut

This is done to remove the extra moisture that is left after the blanching process This is performed by using a vibratory screener called as draining process.

Step -6: Disintegration process

In this stage, the pared nuts are chopped into tiny pieces and introduced into a disintegrator to prepare them for the extraction step.

Step -7: Extraction of the milk

Here the milk extractors – screw press (or) hydraulic press includes shredded coconuts and the extractor will give the coconut milk. When any solids (or) large particles are left over, they are removed by filtering the extracted coconut milk.

Step -8: Centrifugation

In this step, two immiscible substances are separated through centrifugation. Coconut milk is a natural oil in the emulsion of water. Hence, coconut oil and coconut skim milk will get separated after centrifugation. 

Step -9: Filtration of the crude extract

Filtration is considered the final stage for virgin coconut oil preparation. In this step, the coconut oil is poured through a filter and later packed into suitable packets. The excess moisture present in coconut oils is removed using the vacuum dehydration of oils. 

Coconut Oil Manufacturing Project Report/ Economics of Coconut Oil Manufacturing Business

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

Coconut oil
Coconut oil manufacturing (image source: pixabay)

Land and building construction on rental basis per month: Rs.2500


  • Cast iron pan 1000 lit. capacity (200 kg.Wt): Rs. 1,20,000
  • Rotor cum screener to expel oil Rs. 4,000
  • Decorticator: Rs. 500
  • Aluminium Disc 500 lit. capacity: Rs. 20,000
  • Stirrer with motor 1 HP (for blending purpose): Rs. 10,000
  • Other necessary equipments for cooking: Rs. 5,000
  • Automatic filling machine for liquid: Rs. 70,000
  • Office furniture: Rs. 10,000
  • Total: Rs. 2,39,500 

Pre-operative expenditure:

  • Wooden chulla four nos.: Rs. 2,000
  • Project profile: Rs. 200
  • Travel: Rs. 2,000
  • Regn. With Sales tax: Rs. 2,000
  • Packing advance for plastic containers, cartons: Rs. 15,000
  • Stationery: Rs. 300
  • Telephone connection: Rs. 3,000
  • Other misc. exp.: Rs. 5,000
  • Total: Rs. 29,500

Fixed capital investment:

  • Machinery: Rs. 2,39,500
  • Pre-operative expr.: Rs. 29,500
  • Total: Rs. 2,69,000/-

Working capital Analysis:

  • Raw coconuts 60 tons @ Rs.2000/Ton: Rs. 1,20,000
  • Scented coconut oil 500 lit. @ 60/lit.: Rs. 30,000
  • Packing materials (plastic containers, cartons,etc.): Rs. 20,000
  • Total: Rs. 1,70,000


  • Wood 30 quintals @ Rs.120/qtl.: Rs. 3600
  • Electricity 300 KWH @ Rs.3.00: Rs. 900
  • Total: Rs. 4,500

Staff and Labour:

  • Skilled labour: Rs. 10,000
  • Unskilled labour: Rs. 7,500
  • Salesman: Rs. 3,000
  • Accountant: Rs. 2,500
  • Peon: Rs. 2,000
  • Total: Rs. 25,000

Other expenses

  • Rent: Rs. 2,500
  • Transport and travel: Rs. 2,000
  • Telephone: Rs. 400
  • Stationery: Rs. 100
  • Publicity: Rs. 1,000
  • Sale tips: Rs. 1,000
  • Other misc. expr.: Rs. 2,000
  • Taxes and levies: Rs. 500
  • Total: Rs. 9,500

Total working capital P.M. = 1,70,000 + 4500 + 25,000 + 9,500 = Rs.2,09,000.

Coconut Oil Manufacturing Project Report – Total capital Investment:

  • Fixed capital: Rs. 2,69,000
  • Working capital: Rs. 2,09,000
  • Total: Rs. 4,78,000

Coconut Oil Manufacturing Project Report – Cost of production (Per annum):

  • Depreciation on machinery and equipments @ 10%: Rs. 22,950
  • Depreciation on furniture @ 20%: Rs. 2,000
  • Recurring expenditure (per annum): Rs. 25,08,000
  • Interest on total cap. Investment @ 14%: Rs. 66,920
  • Total: Rs. 25,99,870

Turnover of Coconut Oil production

Coconut oil turnover 92.4 MT @ Rs.30,500/ton: Rs. 28,18,200 (Say Rs. 28,20,000).

Coconut Oil Manufacturing Project Report – Profit in Coconut oil production

Profit = Rs. 28,20,000 – Rs. 25,99,870 = Rs. 2,20,130

Net profit ratio = Profit x 100/Turnover = 7.8%.

Break even analysis:

Fixed cost (Per annum):

Total depreciation: Rs. 24,950

Interest @ 14%: Rs. 66,920

40% salary: Rs. 1,20,000

40% other exp. Except rent: Rs. 33,600

Rent: Rs. 30,000

Total: Rs. 2,75,470

B.E.P. = FC x 100 / FC + profit = 55%.


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