Peanut Butter Project Report, Making Process

Introduction to Peanut Butter project report, manufacturing process, and Business Plan: Peanut Butter is the paste of peanuts that can be prepared by grounded dry roasted peanuts. If you are unaware of the information about how peanuts are transformed to peanut butter or how peanut butter is made in factories, then this post will help you understand all the essential data like what is the widely used variety of peanut for peanut butter making, applications of Peanut Butter, and what is the best and nutritious peanut butter. 

A guide to Peanut Butter project report, manufacturing process, and business plan

Peanut Butter Manufacturing Process
Peanut Butter (Image source: pixabay)

Business plan for starting Peanut Butter Manufacturing: To start a small-scale Peanut Butter Manufacturing Business in India, you need to first draft a perfect business plan by considering the following points:

  • Basis and presumptions of Peanut Butter Manufacturing Business
  • Implementation schedule of Peanut Butter Manufacturing Business
  • List of approvals required to start Peanut Butter Manufacturing Business
  • Raw materials required for Peanut Butter Manufacturing Business
  • List of machinery and equipment for preparing Peanut Butter
  • Manufacturing process of Peanut Butter
  • Project economics of Peanut Butter Manufacturing Business

Basis and Presumptions of Peanut Butter manufacturing business

The Peanut Butter Manufacturing project profile relies on the following assessments:

  • Working hours/shift: 8 hrs.
  • No. of shift/day:1
  • Working days: 300
  • Labor expenses: According to State Government’s Minimum Wages Act.
  • Rate of interest: 15% per annum
  • Costs of machinery and equipment: Taken based on A particular dealer
  • Value of raw material: As per local market Packing material/others rate (on wholesale rate)
  • Land: owned
  • Building Construction charge: About Rs. 2000 per sq. ft.
  • Break-even point will be estimated on a full capacity utilization basis
  • Pay-back time is 7 years

Implementation schedule of Peanut Butter manufacturing business

The project implementation schedule

  • Project preparation: 0-1 month
  • Location selection, acquisition of 1-2 months land and land development
  • Loan Sanction: 1-3 months
  • Building construction: 3-4 months
  • Connection of electric supply and water: 4-5 months
  • Obtaining machinery: 5-6 months
  • Electrification and installation:  6-7 months
  • Recruitment of staff and workers: 7-8 months
  • Trial run can be initiated in 8-10 months
  • Commercial production could start from 10-11 months

List of approvals and permits required to start Peanut Butter manufacturing business

The next step to start Peanut Butter Manufacturing Business in India is acquiring the below list of licenses, permissions and registrations –

  • Register your business identity
  • MSME registration
  • GST registration
  • ROC
  • Get the PAN Card
  • Registration of firm
  • 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

Area required to start Peanut Butter manufacturing business

In around 3000 sq. ft, a small-scale unit can be established. However, the basic mill can be initiated in a much smaller region.

Equipment required to start Peanut Butter manufacturing business in India

The primary necessity while one desires to begin Peanut Butter business is ‘its machinery’. Equipment is essential for making Peanut Butter. The main equipment and the machinery, and the materials needed for Peanut Butter making are mentioned in the following section (considering all the types of flour mills):

  • Availability of transportation facilities
  • Electricity supply
  • Water connection
  • Semi-skilled staff
  • Drainage provision

Machinery for example

  • Bucket elevator
  • Reel machine (3 segments)
  • Rotary separator with aspiration channel
  • V-Groove, Pulleys, Couplings, V-Belts, etc
  • Scourer machine with aspiration channel
  • Intensive dampener
  • De-Stoner
  • Rotameter
  • Indent cylinder
  • Screw conveyor
  • Weighing scale
  • Dust cyclone
  • L.P fan for cleaning
  • Magnate
  • Purifier
  • Silogate
  • Roller Mill body
  • Roll Grooving and spindle cutting
  • Super cyclone

Manufacturing process of Peanut Butter

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Manufacturing process of Peanut Butter
Manufacturing process of Peanut Butter (pic source: pixabay)

The peanuts often have an additional component that enhances the taste, texture for instance the following: emulsifiers, sweeteners, and salt. In the next section, we have mentioned the basic steps of how peanuts are transformed into peanut butter. 

Pre-clean the groundnuts or the peanuts

For obtaining the best quality of groundnuts, one must do precleaning of the groundnuts. This is performed by washing them neatly.

Removing the ground nuts shells

In this step, the hulls have to be properly removed with minimum or no damage to the nuts or seeds. To prevent the excessive brittleness of the kernels or shells and even to reduce dirt, the moisture of the unshelled peanuts will be adjusted or optimized.

Grading the ground nuts 

It is necessary to grade the ground nuts the shelled peanuts to get a uniform material and avoid the mix of small and big peanuts.

Roasting the groundnuts

In this step called Roasting based on the moisture content, roasting is performed at 160 ° C for almost 40 – 60 minutes. This method aids to endorse the shelf life of peanuts and also enhances the flavor. This step thereby decreases the water content to 1%.

Cooling the roasted groundnuts

After roasting the peanuts, they will be cooled using a blower cooler cylinder. And the process is accomplished when the temperature reaches 86 °F or 30 °C.


In this process, the cooled peanuts will be blanched either by Heat or Water Blanching 

1. Firstly, Heat Blanching 

2. Secondly, Water Blanching 

Heat Blanching

Heat Blanching is a traditional step where peanuts will be heated at 280 °F or 138 °C for around almost 20 minutes that helps to soften and split the skins.

Water Blanching

Water Blanching is a new method in which the peanuts will be passed for the removal of outer red skin and later checked for the discolored grey nuts or black nuts.

Grinding the peanuts

In this stage, the peanuts will get grounded in a peanut butter mill that is performed in two stages to obtain fine and creamy butter. During this step, the outlet temperature will be regulated and kept at 65°C to 75°C. The ingredients such as sugar or salt will be added during this step.

You have to de-aerate 

Here, one has to de – aerate them. This is performed by incorporating the air into peanut butter that is later separated in a Vacuum.

Cool the de-aerated peanuts 

It is important to cool them again in this step in the basic steps of how peanuts are transformed into peanut butter. For this process, a scraped surface heat exchanger is used and cooled.  


In this last step, based on the client’s instructions, the peanut butter is transferred to either pet jars or filled in metal drums. 

It is necessary to pack the peanut butter in the bottles and stock them as the final step for how peanuts are made into peanut butter.

Peanut butter project report/Economics of Peanut Butter manufacturing business in India

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Economics of Peanut Butter manufacturing
Economics of Peanut Butter manufacturing (pic source: pixabay)

Fixed Capital

i) Land and Building   

Land Owned

Building 2000 sq. ft. @Rs. 2000 per Sq. ft: Rs. 4,00,000

Over Head Tank: Rs. 40,000

Total: Rs. 4,40,000

ii) Machinery and Equipments: Rs. 4,95,000

iii) Pre-operative Expenses: Rs. 25,000

Total Fixed Capital (i+ii+iii): Rs. 9,60,000.

Working Capital

i) Raw Materials

Groundnut with husk 75000 no’s 2 Rs. 10: Rs. 7,50,000

Polythene bags 75 kg @ Rs.120 per bag: Rs. 9,000

Plywood Boxes of 25kg capacity 300nos @ Rs.100 per box: Rs. 30,000

Labels, gums and other packing aids L.S: Rs. 10,000

Total: Rs. 7,99,000.

ii) Salaries and Wages

Manager cum Food technologist 1: Rs. 20,000

Sales man: Rs. 10,000

Skilled workers-2: Rs. 30,000

Helpers 10 no’s: Rs. 50,000

Total: Rs. 1,10,000

iii) Utilities: Rs. 11,300

iv) Other Contingencies: Rs. 13,700

Total working capital (i+ii+iii+iv): Rs. 9,34,000.

Total Capital Investment

a) Fixed Capital: Rs. 9,60,000

b) working Capital: Rs. 9,34,000

Total: Rs. 18,94,000.

Source of Fund

Term loan: Rs. 7,20,000

working Capital Loan: Rs. 7,00,500

Own fund: Rs. 4,73,500

Total: Rs. 18,94,000

Total loan amount required: Rs. 14,20,500.

Cost of production

Total recurring expenditure: Rs. 9,34,000

Depreciation on Building and tank @ 5%: Rs. 1,833

Depreciation on machinery and equipments @ 10%: Rs. 2,917

Depreciation on hand tools@ 15%): Rs. 438

Depreciation on Office equipments @ 20%: Rs. 1,000

Interest on loan (15%): Rs. 17,756

Total production cost: Rs. 9,57,944.

Say: Rs. 9,58,000

Turnover per month

Total: Rs. 10,75,000

Net profit per month: Rs. 1,17,000

Annual profit without tax: Rs. 14,04,000.

Break Even Point Analysis

1) Fixed Cost

Depreciation: Rs. 6,188

Interest: Rs. 17,756

40% of salary and wages: Rs. 44,000

40% 0f other expenses: Rs. 5,480

Total: Rs. 73,424

2) Net profit: Rs. 1,17,000

B.E.P = Fixed Cost x 100 / (Fixed Cost + Net profit) = 38.56%.


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