How to Make Money from Mustard Oil Extraction

How to Make Money from Mustard Oil Extraction Business.
How to Make Money from Mustard Oil Extraction Business.

How to make money from extraction of the mustard oil business

Mustard oil is one of the edible oil which is extracted from mustard seeds. It is considered as ancient oil that is loaded with many health benefits. The starting of the mustard oil mill plant is a very attractive business option that one can choose wisely. Mustards are part of the oilseed family and they are considered as a spice. As per research, it is estimated that Mustard oil consumption is increasing by 20% every year. The oil from mustard is considered as two different oils. One is the vegetable oil which is extracted by pressing seeds and the other is an essential oil extracted from grinding the seeds. This oil has pungent taste due to the presence of allyl isothiocyanate. In India, mustard oil is used extensively in all countries without reporting any negative and side effects. Mustard oil has a unique taste and aroma. Mostly in India, mustard oil is used for frying, tempering, and seasoning.

Ideas to start the mustard oil extraction business to make money

Create a business plan

Mustard oil is commonly used in India by many people. As it contains MUFA Monounsaturated Fatty Acids it is highly recommended. If one wanted to start the business of extracting oil from mustard seeds, firstly they have to prepare a business plan. The plan must include the fixed cost, variable cost, and total overall investment. Before planning for the cost they have to make sure what type of business should be implemented. Such as whether to produce mustard oil or supply mustard oil which is already prepared. They must determine the source of mustard seeds like from where to buy or to produce self.  Next after determining such things plan it before to whom they are going to supply, which means a client of the business. Here in this article, we are going to discuss the procedure to set up a business plan for extracting mustard oil and selling it to the end-users.

Location to set up the unit for the extraction of mustard oil to make money

After creating a business plan, locate land to set up the production, pack, and store the mustard oil. For extracting mustard oil one must physically set up machinery at some location and start producing it. The land must be near to the consumers by which a market can be created. Before searching for land make sure to do some research in nearby places to know geographical market areas. By analyzing all the factors get a good picture of the quantity of mustard oil to produce in the preferred area.

Legal formalities to start mustard oil extraction business

Before setting up a business one must register their business. To avoid any legal debts registering the business can help them to prevent losses. Before registering one must determine the form of organization. If the form of organization is a sole proprietorship then the registration is optional. But it is mandatory to obtain a trade license from the local authorities. If one wanted to extend the business registering the business as Company would be advantageous. To register the business as a Company first they have to apply to the ROC Register of Companies. The application should include the required documents. After applying it with ROC, the ROC will verify the documents and register the business. The company will be registered by the name they have filed with ROC before. After incorporating the Company obtain a trade license from the local authorities. The list of licenses and permissions required are listed below:

  • Registration of the Company from ROC Register of Companies
  • Trade license from the local authorities
  • SSI Small Scale registration from the Ministry of Micro, Small, and Medium Enterprises MSME
  • Food operator License from FSSAI
  • BIS the Bureau of Indian Standards Certification
  • No objection Certificate from the Pollution Control Board
  • AGMARK Certification approved by Directorate of Marketing and Inspection which falls under the Department of Agriculture
  • If any other permits required as per state laws

Extraction of mustard oil to start a small or medium scale oil business to make good money out of it

The mustard oil extraction is done by the seed oil processing unit. The consumption of mustard oil is increasing day by day. Filtered, double filtered and refined mustard oils usage gave entrepreneurs a hope of starting mustard oil extraction business. The step by step process of extraction of mustard oil is explained below:

  • The first thing is to check the mustard seeds received from the field regarding quality, the content of moisture, and the color of the seeds
  • In the cleaning section impurities like wooden pieces, stones are removed by the sieving machine
  • After cleaning let them dry for the further process
  • By using the mustard oil press machine the oil is extracted from the mustard seeds. Approximately 35% average of oil is extracted from the seed
  • For vegetable oil production mostly cage-style oil screw presses are favorable for both small scale and large scale industries
  • The mustard oil expeller contains a pressing chamber by which the seeds are compressed by pressure and friction from the screwdriver of the expeller
  • The waste or solid residue exists from the other side of the expeller known as oil cakes. These oil cakes have less oil content and they are used to make animal feeds through a process called distillation
  • The resultant oil is filtered by using a filter press machine to remove any solid particles from the oil
  • The crude mustard oil is stored and packed for selling it in retail size bottles

The cost to start a mustard oil extraction business

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The cost to start a mustard oil business.
The cost to start a mustard oil business.

The cost required to start the mustard oil extraction business includes both fixed and variable costs. The mustard oil business does not require huge capital to start.  The investment for setting up mustard oil mill is approximately Rs. 20 lakhs to Rs. 30 lakhs. The costs are listed below:

  • Cost of equipment like oil expeller, filter, storage tank, etc, – Rs. 2,50,000 to Rs. 3,00,000
  • Installation, electrification and taxes – Rs. 50,000 to Rs. 60,000
  • Working staff – Rs. 20,000 to Rs. 30,000 per month
  • Raw material (mustard seeds) – Rs. 5,00,000 to Rs. 6,00,000
  • Power, electricity, and water charges – Rs. 1,00,000 per month
  • Registration and licenses – Rs. 2,00,000 to Rs. 2,50,000
  • Rent of premises- Rs. 2,00,000 to Rs. 2,50,000
  • Any other expenses – Rs. 1,00,000 to Rs. 1,50,000

The profit margin in the mustard oil extraction business in India

To gain profits from the extraction of mustard oil it is necessary to estimate production efficiency, operation costs, project input, the market price of mustard oil, etc. the numbers mentioned below show the usage of mustard oil during the past few years. It is predicted that by 2012-2013 17.5 million metric tonnes of oil is consumed by the people. This upward trend has increased that 30 grams of oil are recommended to use for the daily allowance. India is ranked as the fourth largest country in producing worldwide vegetable oils. This made many entrepreneurs start a mustard oil manufacturing business and earn good profits.

Marketing and advertisement of produced mustard oil

The marketing of mustard oil is the further step after producing the oil. The resultant filtered mustard oil is stored and tested for clean and clear specifications. The oil-packed in bottles or drums is distributed to the clients who have ordered. The advertisements can be improved to make sales efficiently. Alternatively, one can go to local shops and markets to increase orders. They can create a brand for the oil and sell them based on that brand. The efforts can be made to increase the brand name by promoting through social media. Advertisements on television and local newspapers can increase local sales.

Uses of mustard oil

One tablespoon of mustard oil contains 124 calories. It contains 14 grams of fat, out of which 1.6 grams are unsaturated fat, 2.9 grams is polyunsaturated fat, 8.3 grams is monounsaturated fat. The uses of mustard oil are listed below:

  • Mustard oil is widely used by Indians in preparing pickles. It is used in many states as the main component in preparing vegetarian and non-vegetarian dishes like Mango pickle, tandoori paneer tikka, etc, but consuming large amounts of mustard oil can be harmful to the heart.
  • This oil is used as a relief for the joint pains.
  • Due to its anti-fungal and anti-bacterial properties when it is taken internally, it fights bacteria in the intestines.
  • The mustard oil can help to lower the body temperature which is useful in reducing fever.
  • Mustard oil is full of MUFA Monounsaturated Fatty acids which is essential for health. It is good for skin, hair, and promotes heart health.
  • This oil can treat brittle nails and cracked feet. Many apply coconut oil and almond oil but the mustard oil also works well for cracked feet.
  • Due to its antibacterial properties, it can fight to prevent infections.
  • As per Ayurveda massaging mustard oil can improve blood circulation on the skin. But before applying it on the skin do a patch test for allergic nature.
  • This oil is rich in vitamin E, which is essential for skin to rejuvenate and treat wrinkles.
  • Traditionally mustard oil is used to treat cold and cough.
  • It is treated as an excellent insect repellant.
  • Make a paste of ½ teaspoon of mustard oil, 1 teaspoon of turmeric powder, and ½ teaspoon of salt. Rub this mixture on your teeth and gums twice a day to promote healthy teeth.
  • Mustard oil boiled with henna leaves applied on hair will increase hair growth and strengthen the hair follicles.

The cost of mustard oil in India

The price of mustard oil in India varies from different brands. There are many brands available in markets through online and offline.  The names of the best brands of mustard oil are Dhara, Fortune, Nature fresh, etc. The bottle of 1 liter of mustard oil costs around Rs. 85/- to Rs. 90/-.

The conclusion to make money from the mustard oil extraction business

The mustard oil is labeled and branded as one of the healthiest oil in the country. It won’t disappoint in using it as a medicinal purpose, for skin or hair, etc. so it is advisable to do this mustard oil extraction business and earn huge profits. If you want to reduce input seed costs, you can go for commercial mustard farming.

1 COMMENT

  1. I am Intrested to start a Mustard oil Manufacturing unit , please help me to prepare a project which includes profit / Loss statement.

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