Flaxseed Oil Manufacturing Project Report, Business Plan
Introduction
Hello friends, today we are here with a new topic called “Flaxseed Oil Manufacturing Project Report, and Business Plan“. Flaxseed is an emerging and important functional food ingredient for its rich contents such as α-linolenic acid (ALA, omega-3 fatty acid), fiber, and lignans. Flaxseed oil, fibers, and flax lignans have proved to be advantageous to health by decreasing chances of cardiovascular disease, diabetes, atherosclerosis, osteoporosis, arthritis, cancer, autoimmune and neurological disorders. Flax protein aids in the prevention and treatment of cardiac disorders and in enhancing the immune system. As a functional food component, flax or flaxseed oil has been a major ingredient while preparing baked foods, juices, muffins, milk and dairy products, dry pasta products, macaroni, and meat items. The present report focuses on the facts of the expected health benefits of flaxseed through human and animals’ recent papers and commercial applications in various food items.
Flaxseed oil is obtained by cold pressing ripened flaxseeds and it is procured in both the capsule and liquid pattern. It finds its application in the food industry for salad dressing and the pharmaceutical industry while manufacturing high blood pressure and heart-related therapeutics. It is also used in the manufacture of plasticizers, solvents, and paints.
This present article will help you for preparing and establishing a proper flaxseed oil manufacturing plant. The article will highlight all the requisite elements that an individual should know before taking a firm step in the flaxseed oil industry.
A guide to Flaxseed Oil Manufacturing Project Report and Business Plan
Market potential of Flaxseed Oil in India
The global Flaxseed Oil market is categorized based on its use, product kind, distribution network, and location. Based on its use the global Flaxseed oil market is segmented into four main sectors; Food, Cosmetics, Industrial, and Dietary supplement. Flaxseed oil is seen to be useful for hair conditioning and nourishment, and as a skin toner in cosmetic industries. In culinary, flaxseed oil acts to be a base for many dishes of European cuisine. The use of this oil for industrial purposes is high but the use in food and cosmetics is attaining popularity gradually and the market is estimated to grow at a relatively higher rate in the coming years.
Depending on the distribution network, the global flaxseed oil market is sectioned into supermarkets, online retail, hypermarkets, direct sales, and specialty stores that accommodate natural food and cosmetic stalls. Among all, online sales are projected to rise because of the popularity of seed oils like argan and flaxseed oil on Facebook and Instagram. Specialty stores are also projected to raise their revenue shares in the coming future because of the growth in the number of plants especially in Western European countries and North American parts.
Business plan for starting Flaxseed Oil Making Business
Before starting any kind of business, you need to craft a perfect business plan by considering all the below points-
- Market demand of Flaxseed Oil
- License, permissions and registrations required to start Flaxseed Oil Manufacturing Business
- Area or land required for starting Flaxseed Oil Manufacturing Business
- Basic requirements for setting up Flaxseed Oil production unit
- Raw materials required for Flaxseed Oil Manufacturing Business
- List of machinery required for starting Flaxseed Oil Manufacturing Business
- Manufacturing process of Flaxseed Oil
- Financial analysis of Flaxseed Oil Manufacturing Business
License, permission, and registration for starting Flaxseed Oil Manufacturing Business
For initiating a flaxseed oil production plant, one must have a certain license and registration from various government organizations.
- Register your business with ROC
- Obtain Trade license
- Get SSI registration
- Factory license is essential
- Food operator license is mandatory
- BIS certification is a must
- “NOC” from the pollution control board
- AGMARK certification
- Fire license must be acquired
- FSSAI is mandatory as this business is classified under a food processing industry
The Food Standards and Safety Rules, 2011, and rules laid under IS 544: 1968 allow the inclusion of antioxidants in flaxseed oil which is meant to enhance the shelf life of the oil. However, under the scheme of labelling environment-friendly items, the occurrence of antioxidants in a specific limit is a need as per the rules of the Ministry of Environment and Forests. These few license and certification formalities. Verify the same with your local authority or any industry experts and get acquainted about any other needful obligations.
Area required to start Flaxseed Oil production
Area required to start flaxseed oil production unit is 500 – 800 sq. mt. This will depend on the scalability of your business. As you need to setup and establish production unit required for Flaxseed Oil manufacturing process.
Raw materials and Machinery required to start Flaxseed Oil Production
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The raw materials required are flaxseeds and the list of machinery depends upon the type of manufacturing process which you wish to chose for.
Different manufacturing processes of Flaxseed Oil
The production process of flaxseed oil is usually hot and cold pressing or extraction by solvent.
Hot pressing oil production
The new Flaxseed oil hot pressing production method is a recently added technology that is based on the traditionally cooked pressing of flaxseed. It comprises a certain advanced manufacturing process.
Flaxseed primary processing: Flaxseeds are the raw material that must be of high quality and fresh, they are first pressed, added to flavoured oils in extremely high temperatures, and kept for drying. After drying, a mechanical pressing takes place wherein these hot seeds will be exposed to a lower temperature. These dried and cooled-up seeds are now sent through the process of stone and impurity elimination and remove the hollow, low-grade seeds. When all the iron and other impurities get separated from the seeds, they are sent into large hoppers and divided into two pieces. The next step includes feeding these separated and refined seeds into rotary drum roasting machines which impart aroma to these seeds at high temperatures. Selected flaxseeds are kept in flaking machines for further processing and quality improvement.
Oil pressing processing: All the seeds are transferred to huge frying pan-like vessels and later they are fed into the flaxseed oil pressing machine. The completion of the pressing process will generate strong-flavored crude oil which can be stored in large tanks separately. Residues remaining after the pressing step will be repeated with the production process again for high yield.
Oil extraction processing: Crude Oil extracted will be moved to cooling pots using pumps. When the temperature is about 30 to 35 degrees, it is fed out into filter plates to remove impurities and obsolete cake powder. The oil is then passed into heat exchangers and lastly transferred into large sedimentation tanks, where the temperature is 15 degrees. After the production step is over, the extracted oil is placed in low-temperature conditions and stored as it is ideal for its storage.
The hot-pressing method of flaxseed oil is an easy, common, and less expensive oil pressing method, which can attract higher returns with less investment.
Flaxseed Oil Cold Pressing production process
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Flaxseed oil cold pressing is the process where the vegetable oil is extracted with great physical and mechanical pressure under low temperature, thus called cold pressing. In this process, flaxseeds are not sent for a high-temperature stir-frying or steaming process, so the oil is still distributed in the undeformed protein cells and has abundant inherent properties of flaxseed (like linolenic acid and other nutrients).
Cold pressing process features:
1. Prevent harmful substances that could develop by degradation of oils and sugars in high-temperature oil pressing and proteins malfunction.
2. Prevent the flaxseed oil color from becoming darker and avoid a burnt smell due to high temperature.
3. In the hot pressing method, the oil extraction passes through several stages of treatment by acids like sulphuric acid, caustic deacidification which is harmful for consumption and minimized in the cold-pressing process.
4. Stop high-temperature distillation and deodorization, efficiently avoid the destruction of PUFA-α-linolenic acid in flaxseed oil under high temperature, properly sustain the natural complete nutrients, and will thereby is easy for absorption and acts as a proper nutritional supplement.
Advantages: It sustains almost all the nutrients in flaxseed, and even the taste is refreshing and non-greasy, having rich in polyunsaturated fatty acids.
Disadvantages: Yield is comparatively low and costs if extraction is high.
Flaxseed Oil Extraction and refining process
Flaxseed oil extraction method using solvent oil (such as light gasoline that will absorb oil raw material in flaxseed and extract the oil using high temperature. The oil is first extracted as a mixture of organic solvents and oils, that is not edible directly and can only be consumed after a series of oil refining steps like dewaxing, degumming, deodorization, dehydration, deacidification, decolorization, and other chemical processes.
Advantages: The cost of production is less and yield is high. This is the prevalent process in almost all modern oil industries.
Disadvantages: Destroy the effective nutrients and keep only traces of organic solvents.
Flaxseed Oil Manufacturing Project Report/Economics of Flaxseed Oil Manufacturing
Land and building construction on rental basis: Rs. 3,00,000
Flaxseed Oil Manufacturing Project Report – Cost of Machinery:
- 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
Flaxseed Oil Manufacturing Project Report – 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
Flaxseed Oil Manufacturing Project Report – Fixed capital investment:
- Machinery: Rs. 2,39,500
- Pre-operative expr.: Rs. 29,500
- Total: Rs. 2,69,000/-
Flaxseed Oil Manufacturing Project Report – Working capital analysis:
- Flaxseeds 60 tons @ Rs. 2000/Ton: Rs. 1,20,000
- Scented Flaxseed oil 500 lit. @ 60/lit.: Rs. 30,000
- Packing materials (plastic containers, cartons, etc.): Rs. 20,000
- Total: Rs. 1,70,000
Utilities:
- 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
Flaxseed Oil Manufacturing Project Report – Total capital Investment:
- Fixed capital: Rs. 2,69,000
- Working capital: Rs. 2,09,000
- Total: Rs. 4,78,000
Flaxseed 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 Flaxseed Oil production
Flaxseed oil turnover 92.4 MT @ Rs. 30,500/ton: Rs. 28,18,200 (Say Rs. 28,20,000)
Profitability in Flaxseed 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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