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6 Steps To Produce Groundnut Oil In Nigeria

Here in this article, we are going to take time to discuss the steps to produce groundnut oil in Nigeria. We hope you find this information invaluable.

Before now, and when the Nigerian economy was in a better state, Nigeria used to be one of the worlds largest groundnut producing countries.

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Groundnut oil is a commodity that is on every woman’s market list. What I am simply trying to say is that groundnut oil business is a profitable business because of its importance in every kitchen.

Read Also: 7 Steps to Produce Vegetable Oil in Nigeria

Steps To Produce Groundnut Oil In Nigeria
Steps To Produce Groundnut Oil In Nigeria – Photo Source: https://businesshab.com

I will explain how to start a groundnut oil producing business in this article, so pay close attention and take notes if possible.


Groundnut oil is a multi-purpose commodity, and well known for frying our plantains, potatoes but Groundnut Oil is actually used for a lot more.

Just like rice, there is a ban on the importation of groundnut oil into the country, this is to urge young entrepreneurs like yourself to venture into the production of vegetable oils.

So what are you waiting for, the government has paved way for you to excel in this business. The business was profitable when there was no ban, now there is ban don’t you think it would be more profitable.

Read Also: How to Start Vegetable Oil Business in Nigeria


Let me hit the nail on the head, Groundnut oil business is a profitable business that has the prospects of fetching you good and reliable income all through the year.

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Since the Groundnut oil business is a fluctuating sector, where production is usually determined by the size of the venture or business (Low scale or Large scale production).

I will be basing my research on low scale production, because I feel you may just be starting out, and not have the capital to build a large scale groundnut oil producing plant.

1 ton of groundnut seeds, produces an average of 500kg of groundnut oil.

440kg of groundnut cake and 30kg of groundnut sludge.

The sales of all this should result to a profit of about 17,000 naira per day and  119,000 naira every week. So you see, the groundnut oil business is a gold mine for people who know how to set it up and manage it. Luckily, I will be showing you how to start up your own small scale groundnut oil business In Nigeria.

Read Also: 12 Health Benefits Of Coconut Oil

Steps To Start Groundnut Oil Business

This are the steps to start a groundnut oil making business in Nigeria.

Capital/Equipment Needed

You will need a fully automated groundnut oil mill, to be able to recover your capital and a reasonable profit. The equipment needed to start up a groundnut oil business include;


Equipment acquisition


Vehicle and transportation costs


1. Learn How to Produce Groundnut Oil

In order for you to begin the business, you must learn how to produce this commodity on your own. If there is already a Vegetable Oil producing company around your area, you can go there and work as a apprentice. If you are lucky, you might also be getting paid by the owner.

Once you have acquired the required knowledge about the business, It is time to move on to the next step in starting this profitable business.

Read Also: How To Start Palm Kernel Oil Business In Nigeria

2. Get an Office Location

This is where your equipment will be stored, and all operations will be conducted from. It does not have to be the size of a football stadium, however, It does not have to be too small as well. The last thing you want is to have a cramped up working space.

Get a property agent and tell him/her the kind of space you need. It is left for the agent to find a space that will do just for your type of business.

3. Choose a Name and Resister Your Business

The next step is to choose a name, and register your business with the CAC. I advise that you choose a name that is easily re-callable, with a funny but catchy hook.

This type of products usually do well in the Nigeria, mysterious names and beautiful packaging usually attract Nigerian buyers, e.g. Baba dudu, Aunty Oil.

As for registering your business, I suggest you visit the Corporate Affairs Commission office closest to you, to begin the process of registering your business name and business.

This will give you autonomy of that name, this means that nobody else can use any name you decide to give your business.

4. Hire Workers

After conducting my research to write this article, Groundnut oil production is just not a business for one individual. The demand for this product is never-ending, and in other to meet up, you need extra hands working for you.

Make sure to hire responsible and hardworking employees, because lazy and irresponsible workers can kill a business faster than lack of funding can.

5. Test the Market

Now that the equipment, workers and funding has been set up, it’s time to test your product in the market. Consider producing few quantities of your groundnut oil and taking it to your local market. Try selling all of the products and if you do, then that is confirmation that your Vegetable oil will do well in the market.

Make sure you have provision for transportation because late delivery of your product can cause retailers to lose confidence in your business. A small shuttle bus (customized with your brand logo) is enough for now.

6. Market Your Product

Many businesses failed because, they lacked a dependable marketing strategy. Also, many other businesses have made ground breaking success because they took marketing and publicizing seriously. Print Leaflets, flyers and distribute them at the local market.

Nowadays everybody spends about 6 hours a day on social media, so if you are looking to properly reach a lot of people, and consider social media advertisements and promotions.

Read Also: How to Start Palm Oil Business in Nigeria


The production of oil from groundnut seeds: seed planning, seed squeezing/oil extraction and filtration. An average vegetable oil mill has the accompanying offices:

  1. Decorticator;
  2. Cooking pot;
  3. Child boiler;
  4. Oil expeller; and
  5. Channel press.

So far your vegetable oil is of good quality, you will have customers paying ahead of time to secure their share of your product.

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Emmanuel Chibuike

Chibuike Emmanuel is a Content Developer at InfoGuideNIgeria.com. InfoGuide Nigeria is a team of Resource Persons and Consultants led by Ifiokobong Ibanga. Page maintained by Ifiokobong Ibanga. If you need a personal assistance on this topic, kindly contact us.

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