Coconut is so useful and versatile that it can be used to make oil, shampoos as well as ropes and mats. Many people are starting a coconut products business and making a lot of money from it.
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In this article, we will discuss the types of coconut oil, the business plan to start a coconut oil business, and methods to arrange funds in detail. So without wasting time let us now begin:
Types of coconut oil
There are different types of coconut oil like:
- Virgin coconut oil.
- Processed coconut oil
- Refined coconut oil
- Organic coconut oil
- Hydrogenated coconut oil and many more coconut oils.
Business Plan to start a coconut oil making business
In this business plan, we will discuss one by one in detail the resources which you need to start a coconut oil-making business. So let us begin:
#1 Raw materials required to make coconut oil
What could be the raw materials to make coconut oil?. Obviously coconut, you just need fresh coconuts as a raw material for making high-quality coconut oil because Coconut palms are taken into use for making oil. It is similar to that you need chillis to make chili powder.
You need other things like plastic bottles for packaging purposes.
The number of machines required depends on which coconut oil you want to make. But you just need one machine set to complete the below-mentioned manufacturing process. A small machine set will cost you about $2,000-$3,000 in the United States or Rs 1,00,000 in India, and there is no limit in the price of a large machine set.
#3 Land and building
You need a piece of land if you want to manufacture something and here you are going to do a coconut oil manufacturing business, so definitely you need a piece of land depending on the scale of the business. In my estimate, you can easily start the business with about an area of 600 sq. feet on a small scale.
On a small scale, you can do all the things by yourself but on a large scale, you require more workforce to increase the production. You will have to hire skilled workers for operating machines and unskilled workers to do all the manual work like cleaning the factory, separating the coconut shell from the nut, etc., and need to pay them accordingly.
#5 Transportation and other resources
Transportation facilities are required to transport coconut oil to distributors and wholesalers. You also need some other resources like electricity and water to operate your industry efficiently and effectively.
Coconut oil manufacturing process
The manufacturing process of coconut oil is generally of five steps, which are as follows:
Separation of nut and shell
This step is very simple, you just have to remove the outer covering of the coconut.
Cut into small pieces
In this step, you have to just cut the coconut into small pieces.
Making of copra
After that, you need to dry coconut using hot air( do not worry, all processes are to be done by machines). The dry coconut is known as copra.
Cooking and pressing
In the next step, you need to cook the copra and press it in a compressor.
In the final step, you just need to filter your oil to remove unwanted particles from it.
The manufacturing process slightly depends on the type of oil you are manufacturing. That is why I cannot explain them in detail.
Investment required to start a coconut oil-making business?
On a small scale, you need to buy a small machine and require a proper area. Depending on which area you are starting this business you need a minimum amount of $4,500 in the United States or Rs 2,00,000 in India to start this business.
On a large scale, according to my estimate, if you are having your own land then you need a minimum amount of $4,00,000 in the United States or Rs 2 crore in India to start this business.
How to arrange funds for the coconut oil-making business?
On a small scale, you can use your personal savings or help from various government schemes to start the business. But on a large scale, your personal savings are not going to be sufficient, so you have to take help from an investor or need to take a bank loan to arrange funds.
In my personal opinion starting a small scale business, whether it is a paper bag making business, red chili powder business, pen manufacturing business, incense stick manufacturing business, or any other business, is quite easy because, on a small scale, a person does not require enough funds, does not have to comply enough legal obligation and also does not have to pay huge taxes to the government.
Coconut oil is very beneficial for our health. It is so beneficial that many people use it daily. Businessmen dealing in it make a lot of profits. So you can also start it on a small scale with a minimum investment of about $4,500 in the United States or Rs 2,00,000 in India. You need raw materials, machines, land workers, and some other resources to start this business. Its manufacturing process depends on which coconut oil you are going to make but involves five common steps. You can take help from government schemes, consider taking funds from investors, or can take a bank loan to arrange all the funds.
As I said at the beginning that every part of a coconut is useful and you require only its palm to make coconut oil. So if you are finding ways to make money from the leftover coconut, then you can definitely check out coconut business ideas.
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Frequently Asked Question
What are the uses of coconut?
Coconut is a versatile item and can be used for making many items like oil, mats, ropes etc.
What are the various types of coconut oil?
There are various types of coconut oil like virgin coconut oil, refined coconut oil, organic coconut oil etc.
How much area is required to start a coconut oil business on a small scale?
An area of about 600 sq feet is required to start a coconut oil business on a small scale.
How much money is required to start a coconut oil business on a small scale?
You require about $4,500 in the United States or Rs 2,00,000 in India to start a coconut oil making business.