How to Start a Profitable Cashew Nut Processing Business

Raw cashew nut needs proper processing for human consumption. There are several value-added food products you can produce from a cashew processing unit. These are cashew nut shell liquid (CNSL), dried, and roasted cashew nut. Here in this article, you will learn the important steps to starting a profitable cashew nut processing business.

If you live in a cashew-growing area, then you can seriously consider this business. There are two different ways you can initiate the processing plant. One is semi-automatic and another is fully automatic. The cashew nut processing business involves the recovery of edible kernels from the raw nut by mechanical means.

Establishing a cashew processing plant doesn’t demand a reasonable investment. You can set up the unit in any size depending upon the demand-supply ratio.

6 Steps to Start Cashew Nut Processing Business

1. Understand the Market

Raw cashew nut is not suitable for human consumption. Therefore, it needs proper processing. And manual processing doesn’t provide good quality products. Hence, small cashew farms always look for mechanizing processing units. In addition to that, this type of cashew nut has good export potential in different countries.

In the local market, raw and roasted cashew is a profitable FMCG product. Almost every grocery store, supermarket, and mall sells these items regularly. Furthermore, the bakery, confectioneries, hotels, sweetshops, and restaurants are the major bulk consumers of cashew.

2. Learn the Methods of Making Cashew Nut

Grading of raw nuts before processing reduces broken kernels. Nuts are conditioned by sprinkling water and allowed to remain moist for 24-48 hours. Generally, you will need to roast the raw nuts to make their shell brittle and to lose the kernel from the shell. Methods of roasting are drum roasting, oil bath roasting, and steam boiling.

In drum roasting, feed the nuts into an inclined rotating drum which is heated initially to such an extent that the exuding oil ignites and burns, thus charring the shell. The drum maintains its temperature due to the burning of CNSL oozing out of the nuts. Roasting takes 3-5 minutes.

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Oil bath roasting is a traditional method. In this method, you will need to pass the raw nuts for 1-3 minutes through a bath of CNSL maintained at a temperature of 190-200°C by means of a screw or belt conveyor.

The roasting equipment consists of a rectangular vessel of 60-90 cm wide and 90 cm deep with a flat bottom. The whole assembly furnace uses spent cashew shells as fuel. After conditioning, you will need to give the nuts a mild roasting in a closed vessel for 20-25 minutes at 100-120 PSI to lose the kernels from the shell and make its removal easy.

In nutshell, the process consists of moisture conditioning, roasting, shelling, kernel drying, peeling, grading, and packing. Find below the details on the steps involved:

a) Shelling

Nuts after roasting are shelled manually in most of the units. Its output is 15-20 kg kernels in 8 hours with 90% whole kernels. Mechanical shelling can also be done where the shell is cut and the kernel is scooped out using a sharp needle. The output of a worker is 14-22 kg of kernels.

The main disadvantage is that the kernels are contaminated by the CNSL from the mildly roasted nuts. The varying size of nuts requires careful manipulation during cutting to avoid injury to the hands.

b) Drying:

First of all, dry the kernels after separation from shells to reduce the moisture content (2-4%) and loosen the adhering testa. The most commonly used is a Borma dryer with wire mesh trays loaded into metal chambers heated indirectly by gases from the furnace at the bottom. Frequently, change the trays for uniform heating.

c) Peeling:

Peeling is the removal of testa from kernels. Kernels after removal from the dryer being brittle are cooled for 24-48 hours for moisture absorption. You can remove the testa using sharp bamboo sticks. The average peeling capacity is 7-10 kg/head.

d) Grading and Conditioning:

Generally, you need to grade the kernels based on their size and color according to the Government specifications of your area. You will need to condition the kernels before packing to prevent breakage during transport. Additionally, you will need to maintain a moisture content below 5%, otherwise microbial and oxidative spoilage takes place.

e) Packing:

Cashew nuts get rancid and quickly go stale, necessitating packaging having a permeability of oxygen and moisture. Generally, you can pack the bulk of cashew nuts in tin containers (metal cans) after evacuating and filling them with CO2.

A flexible packaging system with N-gas infusion or molded vacuum packaging can considerably reduce the packaging cost. So, you must use the updated and modern packaging machine for cashew packing.

f) Cashew Apple Processing

First of all, wash the ripe cashew apples in water. Then extract the juice by using a screw press or by hand pressing. You can obtain about 50-60% raw juice with 9-10% soluble solids. Also, you can remove the tannins present in juice by mixing with gelatin (0.5g/kg of juice), polyvinylpyrrolidone (1.4 g/kg of juice), or rice gruel (1.25 ml/kg of juice), allow to settle and decant the clear juice.

In case of mixing with rice gruel, repeat the process again. You can use the raw juice for making syrup, squash, ready-to-serve beverages, vinegar, wine, and liquor. To prevent spoilage of raw juice, you can mix the sodium benzoate (0.7 g/kg) and citric acid (5 g/kg) along with a clarifying agent.

g) Cashew Nut Shell Liquid Processing

Cashew nut shell liquid (CNSL) is a naturally occurring phenol. Actually, it contains the soft honeycomb mesocarp of the shell. CNSL is a viscous, oily, or balsam-like substance, pale yellow to dark brown. It has a bitter taste and caustic properties.

Fresh CNSL contains 90% anacardic acid. And you can convert it into cardanol on heating. The rest 10% is cardol which is mainly responsible for the vesicant property. It comes as a by-product of the shell obtained during the processing of the nut.

Generally, you can follow different methods such as hot oil bath, expeller, kiln method, and solvent extraction. Of these expeller extractions are common.

Generally, you can extract about 7 kg of crude oil from a 100 kg shell. The CNSL is a versatile industrial raw material. It is used widely in the formulation of resins, detergents, insecticide dyes, antioxidants for mineral oils, lubricants, drugs, etc.

The major products for industrial applications are cashew lacquer, insulating varnishes, electrical windings, and electrical conductors impregnated with CNSL and cashew cement (CSNL reacted with formaldehyde).

3. Create a Cashew Nut Processing Business Plan

If you are looking forward to making a profitable cashew nut processing unit, a professionally documented business plan is a must. There are plenty of free business plan templates available on the internet to take help from if you want to write on your own. However, hiring a professional business plan writer would be advised if you planning to fund your unit.

4. Arrange Finance

The amount of investment in developing a cashew nut processing unit largely depends on land, building, machinery, equipment, and allied civil construction works. In addition to this, you must have a stock of raw cashew nuts at least for three to six months.

You need to have a clear idea of how much investment you need for setting up the unit. Here, your business plan will come in handy to pitch the fund to investors.

5. Choosing the Location for Cashew Nuts Processing Business

If you are planning to start on a small scale, An area of around 600 sq. mt. is sufficient. However, you must ensure that open land is available for drying purposes. If the land is strategically located in a ready market, the profitability of the unit will increase. The purchase of raw cashew is another factor to consider.

If the location is nearby a cashew-growing area, it is a big advantage. If not, like if you import raw cashews from other countries like Vietnam or African countries, factory locations in proximity to ports will reduce the cost of transportation considerably.

6. Craft a Marketing Plan for Selling Processed Cashews

The demand for cashew nuts is worldwide. This product has got a huge export potential. You must have a well-designed marketing plan to ensure your products can reach most countries. Register your company with B2B marketplaces like Alibaba, Amazon, and eBay, and list your products. Creating a small online store is an easy way of reaching a wider audience with much less cost.

Starting and running a cashew nut processing business demands proper strategic planning and distribution strategy. Also, you must consider quality control seriously. Generally, quality control plays a very important role in the international market.