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How to Start a Cashew Nut Processing Unit

In India, there are 8 states popular for the commercial cultivation of cashew, these are Andhra Pradesh, Goa, Kerala, Karnataka, Orissa,
Maharashtra, Gujarat, and Tamil Nadu. Raw cashew is not a ready to eat product. Processing is necessary. And cashew processing unit is
a small scale and profitable business in India.
Processed cashew nuts are consumed directly or converted to a variety of products like salted cashew nuts, kaju Burfi, cashew curries etc
In India, processing of raw cashew nuts involves both effective utilization of latest technology through equipment and skilled labor.
Market Opportunity
India is a leading producer, processor, consumer, and exporter of cashew nuts in the world. It is one of the important agricultural
commodities exported from India to many countries in the world. However, the local domestic market consumes about two third of
cashew produced in the country. India accounts for 65 percent of total cashew nut exports in the world and export cashew to more than
60 countries. The Cashew Export Promotion Council of India (CEPCI) works towards the promotion of cashew nut and cashew nut shell
liquid (CSLN). India produces 753,000 metric tons of raw cashew nuts per annum.
Business Registration and License
You will need to obtain various licenses to start a Cashew Processing Business. The license can be obtained from Government of India.
The license needed are as follows:

 Registration under Shop establishment act (known as Gumatsa in Maharashtra)/ Trade License from Municipal Authority
 VAT Certificate
 Udyog Aadhar MSME online registration
 FSSAI License (The processing units should follow the Food Safety and Standard Authority of India (FSSAI) act 2006. FSSAI Act is
the applicable pan India for all food products. It prescribes minimum standards operating procedures, food safety norms, packaging &
labeling norms.)
 Trademark Registration (If you want to sell the Processed Cashews under your own Brand)

If you want to start a commercial cashew processing unit, then you must have knowledge about the machinery, processing,
packaging etc.
Location & Machinery
There are 2 ways to do business:

1. The entrepreneur can the grow the cashews by himself and use it for production. For this, he will need farming knowledge and
2. The other way is to obtain the cashews by the farmers and Process it in the Plant or Factory.

The Cashew are mainly grown in the Southern region of the country like Konkan as it cannot withstand the extreme heat and extreme
cold weather of the northern region. Therefore, setting up factory around a Cashew growing area will be in favor of the business as it will
reduce transport cost, time and provide skilled labourers. However, help of transport can also be taken to get the raw cashew nut supply.
Following is the list of machines needed for the Processing Unit:

 Steam Boiler
 Cooking Vessels
 Semi-automated Peeling Machine
 Multi-color Cashew Kernel Sorting Machine
 Husk Winnowing Machine
 Steam Pipeline
 Hot oven
 Hand Operated Cutting Machine
 Cashew Peeling Machine
 cashew filling machine
 Pieces separator
 Weighing scale
 Vacuum Packing / Sealing Machine
 Food grade plastic tubs, buckets, crates, bowls
 Diesel Generator Set

The prices of the machines may vary according to their Processing Capacity, Size, Features etc. Small scale industries can start with few
used machines with low production capacity which will cost less.
Manufacturing Process
Step 1: Sun-Drying: The first step is sun-drying the raw cashews and store them in gunny bags.
Step 2: Steaming: Steaming the Raw Sundried Cashew is the next step, steaming the in-shell cashews under pressure helps in making
the shell loose which makes the removing process easier.
Step 3: Removing the Cashew from the shell: Then the Cashew shells is spilt open longitudinally and the cashew inside is at once
separated by hand.
Step 4: Oven-Drying: Once the cashew kernels are removed from their shells, it is dried in an Industrial oven at a low heat for a few
hours to make the skin loose which eases the peeling process.
Step 5: Peeling: Then the outer skin which turns reddish after drying known as Testa is peeled off to obtain the final cashew nut after
drying ready to be packaged.
Step 6: Grading the Processed Cashew nuts: Grading of Processed Cashew nuts is based on the color and the way the cashew kernels
are broken. The grade is decided as per the AGMARK standards.
Step 7: Packing: Prefer to use equipment which can pack and seal cashew nuts hygienically through a Vacuum packing machine.
Approximately finished good produces is 1/4th of the raw material.
Raw Materials
The only Raw Materials needed for the Processing unit are Raw Cashews.
Cashew nuts growing season starts from Feb – May. At this time, usually RCN is procured and stored to be utilized through rest of the
years. Therefore, this business in working capital intensive, as you need to buy raw material in bulk. One can also import RCN from
other African countries and process and sell it, however, Konkan region cashew is hailed as the best is quality and taste.
Other Materials needed are packaging materials which are moisture-proof, air tight and of superior quality for packing the Processed
Investment and Funding
RCN processing can be done at a very small scale also, where your minimum investment will be around 10 lakhs, which includes
working capital and some essential equipment. E.g. you can start processing 0.5 to 1 Tons per month. For this you will need ~ 8 lakhs of
Financing is easily available, as RCN processing units are considered under priority sector and SSI loans.
Contribution by Bank Contribution by Entrepreneur
Capital Investment 75% 25%
Working Capital Gap (Raw
75% 25%
Tenure of Loan 5-7 years
Moratorium 6 months to 1 year
Can be funded by SCB, Co-Operative Banks
One can also avail the Mudra Yojna Scheme & Standup Scheme launched by the Government of India