Coconut Oil Manufacturing – Coconut oil is a popular medium for cooking food in southern states. However, it is not to be assumed that there are no other applications of coconut oil. On the contrary, it has got extensive applications starting from cosmetics, soaps to the hair tonics, etc.
It can offer you a fabulous opportunity for opening a profitable small scale business. Moreover, you can start the business with an investment as little as INR 75 thousand. Comparatively, it is easy to start coconut oil manufacturing business for earning a decent livelihood.
Once you have made your decision, it is not difficult to collect raw materials required for producing the oil. We use dried coconut for production of oil, which is the main raw material. No denying, one is sure to make money if proper quality standards are maintained.
There is great demand for organically produced oils amongst customers. Moreover, you can start the business from your home or else you can also rent space for running the business.
Overview of coconut manufacturing business plan
Coconut oil is a popular product in India as well as abroad. However, you find coconut palms aplenty in coastal areas. Kernel of dried coconut is industrially known as copra. It is a commercial product of coconut.
Oil content in copra varies from 65% to 72 per cent. There is another of variety called virgin coconut oil. It mostly comes from the extraction of the coconut. However, virgin oil does not come from copra. For starting a coconut oil manufacturing business, it is a must that you live in coconut palm growing area.
There is another type of coconut oil known as RBD coconut oil. RBD stands for refined, bleached and deodorized. However, bleaching here means a filter process to remove impurities. In the following sections, we will discuss the manufacturing of coconut oil and scope of the business.
Arranging finances before starting the business
There is no denying the fact that one can start manufacturing business with very less investment. Still, you need to have adequate resources for purchasing agricultural land and the necessary machinery. Even if you are starting it on a very small scale still you would need capital.
There is labor cost. No denying, you will have to pay the labor hired for running machinery and doing numerous other tasks. And, you have to buy coconut oil expeller machine for extracting oil. All of these are necessary expenses.
However, the scale of the business would decide your operating budget. Also, maintenance of machinery and the factory premises would also incur expenses. Then, there is security which will also cost you.
On the other hand, it is imperative for you to learn about extraction, manufacturing processes for smooth operations. Learning will also cost you. So it is very important that you arrange the finances beforehand as per the scale of the business. Arranging necessary finances in advance for running with any hassles for at least 6 months is imperative.
Register your business
It is important to register your business as legal entity and get all the legal approvals for operating a manufacturing business. However, you would need to get the services of a chartered accountant or a company secretary.
At the time of starting the business you can register the business as a proprietorship. Later you can switch to LLP or PVT ltd registration.
Purchasing coconut supplies
Coconuts are needed in large numbers for extracting adequate amount of oil. There are many wholesalers offering coconut supplies. There are coconut farms from you can get the supplies.
And, you can also grow your own trees as well. Coconut tree take a long time to grow and they give off coconuts seasonally. However, coconut trees continue to provide huge produce of coconuts throughout life.
Coconut oil production process
This is the most important part of the business. In the present section, we will discuss production process for generating coconut oil. The process starts with cutters slicing dried copra into small pieces.
In the next step, the small copra pieces are sent to the copra dryer. Here, we cook the small pieces between 35 degrees Celsius to 50 degrees Celsius for 6 hours. When the pieces are cooked, we will send them into the oil expeller.
Now, the machine extracts coconut oil from the copra through the pressure exerted by the continuous rotation of warm shaft in the barrel. In the final step, we use oil filter press removing impurities. We use containers for bulk packaging while we use small pouches for doing packaging for small consumers.
Find your competition
Entering the coconut oil production business is easy. However, to stay in the business and make profits is difficult. It is profitability that sustains the business over a long run. For staying in the business, it is imperative that you study your competitors.
To ensure better sales of your product, it is imperative that you study your rivals and their marketing techniques. It is important that you evolve effective marketing strategies for the business. Simultaneously, packaging of oil must be attractive and in line with the values and expectations of your target customers.
Branding your coconut oil in an effective manner is crucial. It is a recall of value of a product. During branding and promotion, you associate the product with qualities that are appealing to your target audience.
Taste of coconut oil
Taste of coconut oil differs according to different factors. Many people might assume that coconuts have one uniform taste. It is not so as the taste differs in accordance with the soil structure. Different regions have different soils so their tastes are also different. In South India, we can find many types of soil structures. Each of these soils provides their unique taste to coconuts.
Geographical location also has a great role in determining the taste. It is the location that gives a particular type soil structure. So there are many factors that decide the favors of coconuts. And, there are many types of coconut that give different flavors to coconuts.