Cashew nut processing business plan | A step by step guide.

Cashew nut processing is a labor intensive process. In this post we are going to see drying, roasting, shelling, hot chamber process, grading and packaging process of cashew nut.

Well, Cashew nut is very healthy and full of protein. Many people use cashew nuts in daily diet plan.

As we all know Maharashtra is known as a cashew nut producer state. As well as Andhra Pradesh Kerala Goa Karnataka Tamilnadu Gujarat also majorly produce cashew nuts.

cashew but processing

If if we have to start a cashew nut processing business either we should have a locality in this States or we will have to transport cashew nuts for ourselves.


You can do this business have anywhere but remember that it’s how material availability and show it to nearby your location.

it will reduce your transportation cost and processing cost.

It is a small-scale profitable business idea.

Cashew is one of the most desirable dried fruits derived from an alien tree species. Cashew agriculture is mostly practised in eight Indian states: Andhra Pradesh, Goa, Kerala, Karnataka, Orissa, Maharashtra, Gujarat, and Tamil Nadu. India’s present output of cashew nut processing is 19.46% of world production.

The cashew nut grows outside of the fleshy fruit known as the cashew apple. The cashew apple, together with the seed, falls to the ground as it reaches maturity.

These are gathered and processed to produce cashew nuts. The cashew apple, which is fleshy and sweet in flavour, is used to make Feni, a fermented fruit drink. Kerala is the leading state in cashew processing.

More than two-thirds of cashew processing plants are located in Kerala, with the remainder dispersed among the other states. These mills have a combined processing capacity of more than 8 lakh tonnes per year.

The cashew apple seeds are separated and dried in the sun for 4-5 days. For commercialization, dried raw cashew seeds are processed into cashew nuts.

Cashew processing is a laborious and labor-intensive operation in India. The cashew industry is disorganized and dispersed. In the cashew business, women make up about 90% of the labour force.

Cashew processing mechanization is progressing slowly. This model is designed to give direction for the establishment of a new small-scale cashew processing plant.

Right! Now, what should be our business plan about cashew nut processing? it is a home-based business, also for women and young entrepreneurs.

Cashew nut processing business plan

Start small and grow big. These are the best business tips I have ever got in my life.

And I want to suggest to you that whether it is a cashew nut processing business or any business you should try it on small scale and then we have to grow it on a large scale

Raw cashew nuts are not ready to eat that’s why we have to process them in simple steps like cleaning, stimulating, shell cutting, and so on.

Now let’s think about your business location. what should be your business location? is it to nearby where cashew nuts are farmed or raw materials are easy to you?

can you start a cashew nut processing business from your home? is it a home-based business or not.

Yes! it is. if you have sufficient area required for the processing unit.

Market research

Market research and opportunity available in cashew nut processing business in India.

Before starting the cashew nut processing business we will have to understand our market opportunity and supply and demand in our business.

this market research will help you to understand and build your strategy to set up your processing unit in the best locations.

I will suggest you. To go to the market and find out who are the cashew nut providers.

or you can also go to the d Mart, supermarket,

here you can find your competitor’s names locations and how many suppliers are available in the cashew nuts processing business.

Now just assume that there are 5-6 competitors in your local market and you also.

What do you think who will take your products.
There are lots many like retailer Kiranaa stores in market. But you will have to give the best quality products while doing this business. because stores like Demart and supermarket will never take low-quality cashew nuts from you.

Market potential for cashew nut processing business

Cashew nut demand is gradually growing, but supply is inadequate. India is the world’s biggest producer, processor, user, and exporter of cashew nuts. It is a major agricultural commodity exported from India to many nations across the world. The cashew kernel’s market potential is as follows:

The cultivation of cashew nuts is restricted to coastal locations. However, cashew nuts and their derivatives are in high demand throughout the country. The demand for cashew nuts exceeds supply.

It is used by practically every home, but because to its expensive cost, it is out of reach for the lower-income people. India produces around 7-8 lakh MT of cashew nuts each year.

Approximately two-thirds of the cashews produced in the nation are consumed domestically. These are used in a variety of sweet dishes, Farsan delicacies, desserts, and ice creams.

During festive holidays such as Diwali, Ramadan, and Janmastami, the demand for cashew nuts rises.

Area requirement for cashew nut processing machine.

You will need a 500 square meter area because we also have to dry out cashew nuts in the sunlight. In that much area, you can fit all the cashew nut processing machines.

That’s it and we need also experienced laborers for our processing unit.

You will have to also calculate your transportation cost from your area of the processing unit to your market.

Location for cashew nut processing

Anywhere in the country, a cashew processing plant can be established. However, a place should be chosen wisely, taking into account the availability of a ready market and inexpensive labour.

Raw cashew can be delivered from raw material growing sites to processing units. The majority of current units import raw cashew from other countries like as Vietnam, Africa, and so on.

The facilities placed in cashew growing areas, on the other hand, you have the added benefit of easily available backward and forward markets.

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A step by step cashew nut processing guide.

A simple steps like Drying, Roasting, Shelling, Hot chamber process, Grading and packaging are involved in cashew nut processing. Let’s see one by one each of them.


Raw cashew nuts are sun-dried for 2 to 3 days in an open yard. To achieve equal drying, the nuts are turned over on a regular basis. This procedure eliminates the nut’s surplus moisture.


The edible cashew kernel is protected by an outer shell. The steam roasting technique aids in the removal of this shell with minimum effort. For around 20 minutes, steam is passed over raw cashew nuts in the roasting drum. For two days, roasted cashew nuts are air-dried.


The raw cashew kernel has a kidney appearance. Furthermore, the exterior shell of a raw cashew nut is extremely difficult to shatter. The shell contains a liquid known as CNSL, which can be extremely deadly if not handled appropriately. Cashew shell and unblanched cashew kernels are separated using shelling machines.

The Hot Chamber

Unblanched cashew nuts are then roasted in custom designed ovens set at 70°C to make the skin brittle and simple to remove.

Peeling Testa (skin) adhering to cashew kernels is removed by blowing compressed air on them and brushing them.


Cashew kernels are classified into more than 25 categories based on their size and colour. The Cashew Export Promotion Council of India has standardised these grades.


Infrared heating is initially applied to cashew kernels. An X-ray machine is then used to eliminate any foreign particles. Finally, grades are given a final polish by being sent through a cleaning line that is manually overseen.

The cashew kernels are then packaged in a controlled environment. CO2 and Nitrogen gases are used to replace the ambient air.

Cashews are pricey because each fruit only contains one nut. Only after cashew trees have been grown, harvested, separated from the fake fruit, roasted, cooled, split open, skinned, sundried, and sorted can they be sold as raw nuts.

The quantity of value generated is inextricably linked to the amount of labour that goes into it.’

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While processing cashew nut, The most difficult step is removing the kidney-bean-shaped nut from its shell, which is labour demanding and needs a competent staff. 90 percent of whom are women who are given pitiful salaries.

When the shell is split open, it pours a highly corrosive oil known as CNSL, or ‘cashew nut shell liquid.’ When this oil comes into touch with skin, it creates burns and blisters, which pose serious health concerns to employees.

What is a CNSL liquid?

Cardolite products are made from cashew nutshell liquid (CNSL), a non-food chain, yearly renewable biomaterial. It  is a reddish brown in color and  volatile fluid in nature. it is derived from the cashew nutshell’s delicate honeycomb structure.

This tiny liquid is mostly composed of anacardic acid, with a trace of cardol and its methyl derivatives. Decarboxylation and distillation of CNSL yields high purity cardanol, a highly sought alkylphenolic molecule in the chemical industry.

The distillation residue has the potential to be utilised to create durable friction particles and binders for the automobile brake lining industry.

Clothing and equipment for protection

All individuals working in the roasting and scrubbing of cashewnuts or extracting oil from cashewnuts or cashewnut shells should be provided and maintained for the benefit of the occupier.

  • gloves made of rubber or leather that may be washed
  • appropriate impermeable aprons with sleeves to cover the entire body down to the knees and shoulders; and
  • proper type footwear to protect the feet and legs from cashewnut oil; and for cashewnut shelling employees, either
  • a protective ointment made up of 10% shellac, 5% alcohol, 10% sodium perborate, 5% carbitol, and 20% talc;
  • enough amounts of kaolin and coconut oil; and
  • any other material or equipment deemed necessary for worker protection by the Chief Inspector of Factories

Manpower requirement

The cashew nut processing business requires a lot of labour. Each activity, such as loading and unloading of raw materials and completed products, drying of raw materials, and processing and packing of cashew kernel, need the use of labour.

It takes talent to chop and peel cashews. The majority of these cashew processing operations are handled on a contract basis by female specialised labour. Wages are paid on a per-kilogram basis. Permanent labour is also required for the processing units to handle numerous day-to-day tasks.

  • Manager cum supervisor =1 *300000 annually
  • Skilled labour =2 *15000= 180000 annually
  • Helper 1 *8000= 96000 annually
  • Total 576000 annually labour cost.

License and registration for cashew nut processing plant.

  • License from FSSAI
  • Permission to commence production from State Pollution Control Board
  • License from boiler inspector
  • Permission to dug bore well from Ground Water Survey and Development Authority (GSDA)
  • Registration with District Industry Centre (DIC) for as Small and Medium Enterprise
  • Application to State Electricity Board/ Authority for sanction of requisite power load
  • Registration of concern with Registrar of Companies (ROC)
  • NOC from Local Bodies like Gram Sabha/ MC etc. – mandatory
  • Consent to establish from State Pollution Control Board – mandatory
  • Approval of Layout plan for construction – mandatory

Cashew nut processing investment cost

Total cashew nut processing cost will be approximate to 1 cr. here is list.

  • Land development -0.30 lakh
  • Building and civil structures (sq mt) – 1 lakh
  • Plant and machinery 60.14 lakh
  • Miscellaneous fixed assets – 1.00 lakh
  • Preliminary & Pre-operative expenses- 2.50 lakh
  • Margin money for working capital -36.09 lakh
  • Total project cost – 1 cr.
  • Margin Money (25%) 25 lakh
  • Bank loan (75%) -75 lakh

Plant and machinery for processing unit

Cashew processing is a seasonal business, It means, you can do this business 200 days per year. With raw material availability and market forecasts in mind, a processing capacity of 500 tonnes of raw cashew processing each season should be determined. Plant and machinery are expected to cost Rs.60.15 lakh. Here is a list.

  1. Steam Boiler= 1* 758000 =758000.00
  2. Cooking Vessels =2 *36000 =72000.00
  3. Semi Automated Peeling Machine= 1* 834000 =834000.00
  4. Multi-color Cashew Kernel Sorting Machine= 1* 729300= 729300.00
  5. Husk Winnowing Machine= 1* 105000 =105000.00
  6. Steam Pipeline= 1* 610000= 610000.00
  7. Hot Oven= 1 *335000= 335000.00
  8. Hand Operated Cutting Machine= 10 *1900 =19000.00
  9. Cashew Peeling Machine= 7 *214286 =1500000.00
  10. Filling Machine= 1* 105500= 105500.00
  11. Pieces separator= 1 *90000 =90000.00
  12. Weighing Machine= 3* 13500= 40500.00
  13. Sealing machine= 1* 3500 =3500.00
  14. Food grade plastic tubs, buckets, crates, bowls LS= 250000.00
  15. Diesel Generator Set= 1* 562609= 562609.00
  16. Grand total= 6014409.00

Subsidy for cashew nut processing.

The state government offers a variety of incentives to promote the food business.
Some states have developed Agro Industry Policies. These criteria should be followed by newcomers. District Industry Centres (DIC) offer a variety of incentives based on the location of the unit.

To take full advantage of these benefits, entrepreneurs should contact the DIC in their individual states. The Ministry of Food Processing Industry, Government of India, is collaborating with state governments to carry out a centrally supported initiative known as the National Mission on Food Processing (NMFP).

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