Soybean Oil Making Business – How To Start

How To Start a Soybean Oil making business in India


Soybean oil is an essential edible cooking oil globally. It is vegetable oil. Generally, it is extracted from the seeds. Here in this blog, we intend to explain how to start a soybean oil production business in a detailed way. For starting a soybean oil production business, the location has a major role. You must establish the unit near the soybean producing areas. As you should have the supply of soy seeds at your unit without spending much for transporting the raw materials. Or else, you won’t be able to get the maximum gain from the business.

Some of the major soybean-producing countries are Bolivia, Canada, Uruguay, Ukraine, India, and China. It is well-known that India stands to be the second-largest producer of soybeans in Asia. And the major soybean-producing states in India are Maharashtra, Rajasthan, Madhya Pradesh, Karnataka, Andhra Pradesh, and Gujarat. India accounts for 3.95% of global production according to reports.

Commercially, we have two methods for producing soybean oil. You can produce the oil either through pressing or solvent extraction methods. Basically, the screw pressing method is a mechanical method. The process is complex and the oil yield is much less.

Whereas, solvent extraction is a chemical procedure. It ensures a higher oil yield. Thus, we strongly endorse going with the solvent extraction process. Moreover, you can begin the soybean oil production unit in two methods. One is only oil production. And you will send the oil to other oil refinery factories. Basically, you can initiate this type of unit with moderate capital investment. Another way you can begin the unit along with a refinery setup. However, this type of unit operates as a large-scale and demands extensive capital investment.

A step-by-step guide to starting a Soybean Oil making business in India

Market potential for Soybean Oil making business

It is known that the oil has omega-3 fatty acids, PUFA-polyunsaturated fats, and low saturated fats. Therefore, it is known as one of the healthiest cooking oils. Currently, it stands after palm oil as an edible oil consumed in the world with the USA and China representing the largest markets.

The majority of its global demand currently is because of the food industry. Within the food sector, most of the demand due to cooking and as a condiment in salads. Also, the oil finds its uses in industrial paints, solvents, lubricants, adhesives, cleaners oleochemicals, biodiesel, biocomposites, etc.

Due to its high unsaturated fat component, it undergoes early oxidation when exposed to air, light, or moisture – which makes it suitable for printing inks and oil paint formulations. According to industry specialists, the demand for soybean oil is expected to rise at a CAGR of around 4% in the coming future.

License, permission and registration required for starting Soybean Oil making business in India

One should acquire specific licenses and mainly depends on the final product. First, analyze whether you want to sell the solvent extracted oil or refined soybean oil. In addition, check your state law for well-before. Here, we have accumulated some of the basic needs.

First of all, register your business and get ready with the MOA.

  • Apply for MSME Udyog Aadhaar online registration
  • Obtain the NOC from the PCB- Pollution Control Board
  • Apply for the commercial electricity connection & water supply
  • Apply for the Factory License. Moreover, apply for the FSSAI license. You should maintain the standard according to the PFA Act. Finally, check the upcoming tax liabilities of the business.

For starting a Soybean Oil production unit, you should get several license and registration approvals from different government organizations.

  • Primarily, you must define the management design of your organization. And then as per the design, register your business.
  • Firstly, apply for MSME Udyog Aadhaar which is available as online registration.
  • Then, the important trade license from the local municipality should be applied.
  • The business comes under the food Industry category and requests consent from FSSAI which is also done online.
  • Nowadays it is a must to apply for GST registration.
  • Try to create a current account in any of the nearby banks.
  • Then it is important to apply for the BIS certification. The product must also conform to the PFA Act, guidelines
  • Moreover, it is essential to check the tax liabilities as well for this business.
  • AGMARK certification
  • Fire license
  • Mandi Act
  • Labor Laws such as the following: ESIC, EPFO, etc
  • CLU – for land
  • Electricity Bills
  • FSSAI: The Food Standards and Safety Rules, 2011, and rules made under IS 544: 1968 permit the inclusion of antioxidants in Soybean oil for an increased shelf life of the oil. However, under the scheme of labeling of environment-friendly products, the occurrence of antioxidants in a prescribed limit is a need as per notification of the Ministry of Environment and Forests. These are the basic license and certification requisites. Check out the same with your local DIC authority about any other needful formalities.

Machinery required to start a Soybean Oil making business

For establishing the plant, the primary need is the land. If you already have an area for the manufacturing operation, then it is perfect.

Otherwise, you can get a space in any industrial area for rent. Generally, a 2000 sq. ft built-up area is enough for small-scale production. Some of the most essential machines are

  • Solvent extraction plant
  • Boiler
  • Basically, a solvent extraction plant includes
  • Elevators
  • Seed Cleaner
  • Aspiration system
  • Cracker
  • Cooker
  • Flaker
  • Roll Grinding attachment
  • Hydraulic system
  • Conveyors
  • Rotary Air Lock
  • Feed Bin
  • Micro-Level Indicators
  • Extractor
  • Rising Hoppers
  • Discharge Bin
  • Bulk Flow Conveyor
  • Rotary Air Lock
  • Toaster,
  • Dust Catcher
  • Horizontal Tubular Condensor
  • Sealing Devic
  • Vapour Cooler,
  • Water Solvent Separator
  • Spent Water Desolventiser
  • Evaporator
  • Separator
  • Pre-Heater
  • Condensers
  • Oil Stripping Column
  • Heater
  • Dryer
  • Oil Holding Tank
  • Vacuum Equipment
  • Final Vapour Absorber
  • Heat Exchangers
  • Final Vertical Stripper

Soybean Oil extraction process by solvent extraction process

The first step is the cleaning of the soy seeds. Then, dry the seeds and dehull which is important before the oil extraction. You have to separate the soybean hulls because they will hold oil and thereby provide a lower yield.

The Dehulling is done by cracking the soybeans. Finally, separate the hulls and cracked soybeans mechanically. Moreover, you can even have magnets to separate any iron particles from the soybeans.

The soybeans are also heated to around 75°C to coagulate the soy proteins to make the oil extraction simple. For extracting the oil it is important to slice soybeans as flakes. Place them in a percolation extractor and immerse them with a solvent, usually hexane.

Counterflow is used as an extraction system as it gives the highest yield. After removing the hexane, the extracted flakes only have about 1% of soybean oil and is used as a livestock meal or to prepare food as products like soy protein.

In the end, separate the hexane from the soybean oil using evaporators. The evaporated hexane is even recovered and return to the extraction process. Now, the hexane free crude soybean oil is ready to be sent to the refineries.

Raw materials required for starting a Soybean Oil making business

Soyabean (Image credit: Pixabay)

The most essential raw material is soy seed. Besides that, you have to obtain Hexane and other miscellaneous compounds. Not only that, you have to acquire packaging materials for bulk packaging purposes.

Area required to start Soybean Oil making business

The area which is needed to set up Soybean Oil making business is 200 sq. ft.

Investment required to start Soybean Oil making business in India

To initiate the Soybean Oil making business, you need to arrange the finance from Rs. 2 lakhs to Rs. 5 lakhs.

The Soybean Oil making machine price ranges from Rs. 80,000 to Rs. 2,00,000 depending upon the capacity.

The raw materials cost is about Rs. 1 lakh.

So, the total amount required to start Soybean Oil is Rs. 2 lakh if you plan it on a smaller scale.

Soybean Oil making machine cost

The price of a soybean oil machine is based on the type and the desired production output. The rate may range from 1 – 5 Lacs per machine for a small scale unit.

Expected profit in starting Soybean Oil making business in India

You can earn good profits in Soybean Oil making business. You can make 35 to 40% of profits in Soybean Oil making business, after deducting the total expenses from the capital amount. Then the leftover amount will be your profit, so you need to minimize the expenses incurred accordingly. You can also plan for used machines so that it will reduce your fixed capital investment.

In case if you miss this: Real Ways To Make Money From Home.

How to sell your Soybean Oil

You can sell your Soybean Oil in local markets or you can even sell with online stores. You can also register in B2B websites and B2C websites in online markets to promote Soybean Oil products.

You can also sell your products in supermarkets, small stores in shopping malls, etc. Advertise about your product through social media to get a huge number of clients in this way you can increase and promote your business. There are very limited Soybean Oil manufacturers in India, but the demand for encouraging the new product is also high because of its medicinal properties. So, you need not worry about the market. You can sell your product based on the Soybean Oil wholesale price in India.


Please enter your comment!
Please enter your name here