What is a cashew nut shell liquid project report?
A cashew nut shell liquid project report is a detailed project report (DPR) for a plant that presses the dark, phenolic oil out of discarded cashew shells and heat-treats it into technical CNSL. It covers shell supply, yield, expellers, the market for CNSL and shell cake, project cost, five-year projections, DSCR and break-even.
Promoters use it to size the plant and raise a term loan; lenders and investors use it to judge whether shell cost, yield and selling price leave enough to repay.
Also known as: CNSL project report, cashew shell oil project report, CNSL extraction plant DPR, cashew nut shell liquid business plan.
Cashew nut shell liquid manufacturing plant cost in India
The sample report models a plant making 5.4 MT of CNSL per day, 1,782 MT a year at full capacity, over 330 working days. It starts at 60% capacity, reaches 80% in Year 5 and sells at ₹49,800 per MT, ex-GST.
| Land and site development | 25.21 |
|---|---|
| Building and civil works | 114.49 |
| Plant and machinery | 213.28 |
| Other fixed assets | 34.47 |
| Contingencies | 16.39 |
| Preliminary and pre-operative | 10.10 |
| Working capital margin | 22.65 |
| Total | 436.59 |
| Promoter's contribution (25%) | 109.15 |
|---|---|
| Term loan from bank (75%) | 327.44 |
| Cash credit limit (separate) | 67.95 |
| Total project cost | 436.59 |
The lowest DSCR (debt service coverage ratio, cash available to repay divided by the instalment due) is 1.54 in Year 2, when full principal repayment starts. Net margin rises from 9.0% in Year 1 to 14.3% in Year 3.
Term loan at 10.5% with a 6-month moratorium and 54 monthly instalments. All figures are illustrative.
Cashew nut shell liquid manufacturing process
The liquid sits in the honeycomb layer between the outer and inner shell. A stand-alone plant buys shells from kernel units, presses the liquid out and sells two products: CNSL and the pressed shell cake.
- Shell receiving
Shells are weighed, checked for moisture and stray kernel pieces, and stored under cover so rain does not spoil the batch.
- Conditioning
A pre-heater warms the shells so the thick liquid in the cells flows freely into the expeller.
- Expelling
Screw expellers crush the shells and press out the liquid, leaving a dry, fibrous shell cake.
- Settling and filtration
The crude liquid is settled and run through a filter press to remove shell fines that would choke buyers' reactors.
- Heat treatment
The liquid is heated in a reactor so anacardic acid gives off carbon dioxide and turns into cardanol, producing technical CNSL.
- Testing and dispatch
Each batch is checked for viscosity, moisture and polymerisation, then filled into drums or road tankers.
- Shell cake handling
The cake is conveyed to a covered yard and sold to boilers, brick kilns and other industrial users as fuel.
How is CNSL extracted? Choosing a route
The route decides the grade you sell, the yield you get and how much the plant costs. Most new units start with expellers and heat treatment, and add solvent or distillation stages later.
| Hot oil bath at the kernel unit | Nuts are dipped in hot CNSL before shelling, which releases part of the liquid; the shells left behind hold less oil for a CNSL plant |
|---|---|
| Expeller pressing | Screw expellers press warmed shells; the main route for a stand-alone plant and the one modelled in our sample report |
| Solvent extraction of cake | A solvent plant recovers oil left in the expeller cake and can give natural, cold-extracted CNSL; adds cost and a solvent-handling licence check |
| Heat treatment | Converts anacardic acid in natural CNSL into cardanol; the output is technical CNSL, the grade friction and resin buyers usually order |
| Cardanol distillation | Vacuum distillation of technical CNSL into cardanol and a heavy residue; a separate, higher-value stage that usually comes after the plant is stable |
Match the route to the shells: shells from steam-cooking units keep most of their liquid, while shells from oil-bath or roasting units have already lost part of it. Price your shell contract on tested oil content, not weight alone.
Raw material: cashew shells and CNSL yield
Cashew shells are the only real input. A June 2026 company disclosure for a planned Indian CNSL unit puts output at 22–23% CNSL and 72–73% biomass fuel by shell weight. At that yield, 5.4 MT of CNSL a day needs roughly 24 MT of shells.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Raw cashew nut shells (net of shell cake sold as fuel) | 92% | 260.45 |
| Filter cloth, filter aid and process consumables | 8% | 22.65 |
| Total | 100% | 283.10 |
The sample sells one product, so the value of the shell cake is set against shell cost. Raw materials come to 45.6% of sales; a full report shows shells and cake as separate lines.
Machinery for a CNSL plant
Screw expellers are the largest machinery cost in the sample, followed by the heat treatment reactor and its thermic fluid heater. Expeller screws and cages wear fast on hard shell and need a spares budget.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Shell feed hopper, elevator and conveyors | Moves shells from the yard to the line | 17.06 |
| Shell pre-heater and conditioner | Warms shells so the liquid flows | 21.33 |
| CNSL screw expellers | Crush shells and press out the liquid | 63.98 |
| Settling tanks and filter press | Remove shell fines from crude CNSL | 19.20 |
| Heat treatment reactor with thermic fluid heater | Turns natural CNSL into technical CNSL | 42.66 |
| CNSL storage tanks and transfer pumps | Hold and load finished liquid | 21.33 |
| Shell cake conveyor and storage | Carries pressed cake to the fuel yard | 10.66 |
| Laboratory testing equipment | Tests viscosity, moisture and polymerisation | 6.40 |
| Electrical panels and cabling | Power distribution for the line | 10.66 |
| Total plant and machinery | 213.28 | |
Costs are the sample report's estimates for a 5.4 MT per day line. Get current quotations before you finalise.
Licences and the BIS standard for CNSL
As of October 2026, the product standard is IS 840:2026, which replaced IS 840:1986. The other approvals are routine for a small chemical unit but take time, so start them with the land search.
| Product standard | IS 840:2026, the BIS specification for cashewnut shell liquid; buyers often test supplies against it |
|---|---|
| Pollution board consent | Consent to establish and operate from the State Pollution Control Board. Odisha lists cashew nut processing as Orange but does not name CNSL, so the state board sets the category |
| Factory licence | Under the Factories Act where worker and power thresholds apply; rules vary by state |
| Fire NOC | From the state fire service, given the thermic fluid heater, stored liquid and large stocks of combustible shell and cake |
| Business registration | Udyam (MSME) registration and GST registration |
Market for cashew nut shell liquid in India
Buyers treat CNSL as a plant-based phenol. Friction material makers turn it into friction dust for brake linings, and resin, coating and laminate producers use it to replace part of the petroleum phenol in their formulas.
Shell supply is the constraint, not demand. Shells come from kernel units in Kerala, Karnataka, Goa, Tamil Nadu, Andhra Pradesh, Odisha and Maharashtra, and processing follows the raw nut arrival season.
- Brake lining and friction material manufacturers
- Phenolic resin, laminate and adhesive producers
- Paint, varnish and coating manufacturers
- Cardanol refiners and specialty chemical units
- Buyers of shell cake: boilers, brick kilns and process plants
Two products, one plant: by weight, about three times as much shell cake leaves the plant as CNSL. A firm buyer for the cake matters almost as much as a buyer for the liquid.
Mistakes that weaken a cashew nut shell liquid project report
- Using a textbook yield for every shell
Shells from roasting or oil-bath units carry less liquid. A report that assumes the best yield on all shells overstates output and DSCR.
- Leaving the shell cake out, or pricing it like coal
Cake is most of the shell weight. Ignoring it understates income; valuing it at coal prices overstates it.
- Stocking shells for only a few weeks
Shell supply is seasonal. The sample holds 45 days of stock; a plant far from kernel units may need more, and a larger cash credit limit.
- Overheating during heat treatment
Too much heat polymerises the liquid and raises viscosity, and the batch fails the buyer's test.
- No budget for worker safety
Raw CNSL burns and blisters skin. Gloves, aprons, wash points and closed transfers belong in the cost of project.
How NPCS helps you set up a CNSL plant
- Shell sourcing and yieldSize the plant to the shells you can contract, at a tested oil content.
- Route and machineryCompare expeller, solvent and distillation stages and get equipment quotations.
- Bank-ready project reportProjections with CNSL and shell cake as separate lines, DSCR and working capital for the shell season.
- Approvals and layoutPlant layout, fire safety and the consent list for your state.
NPCS's client list shows 269 assignments in specialty chemicals. The NPCS project team, led by founder Ajay Kumar Gupta, has prepared project reports for chemical units since 1994.
What's inside the cashew nut shell liquid sample report
- Introduction
- Uses and applications
- Market potential
- Manufacturing process
- Raw materials
- Plant and machinery
- Land, building and utilities
- Manpower
- Licences and approvals
- Project cost and means of finance
- Working capital
- Projected profitability
- Cash flow statement
- Projected balance sheet
- Depreciation
- Term loan repayment
- Debt service coverage
- Break-even analysis
- Financial ratios
- Key assumptions
- Conclusion
- Monthly loan repayment schedule
18 pages, five-year projections, illustrative figures.
Open sample reportFree sample or a report for your project?
| What you get | Free sample | NPCS report for your project |
|---|---|---|
| Capacity and location | Typical unit | Your capacity, site and state |
| Figures | Illustrative | Built on current prices and quotations |
| Machinery suppliers and quotations | No | Yes |
| Market survey for your region | No | Yes |
| Bank or scheme format (PMEGP, term loan) | No | Yes |
| Use for a loan application | No | Yes |
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Cashew Nut Shell Liquid project report: frequently asked questions
How much does it cost to set up a cashew nut shell liquid plant?
Our sample report models a 5.4 MT per day CNSL plant at ₹436.59 lakh, including ₹213.28 lakh of plant and machinery, land, building and working capital margin. An expeller-only unit of 1–2 MT per day costs roughly ₹1.2–2 crore, indicatively. Adding solvent extraction of the cake or cardanol distillation raises the cost. Your report fixes the figure for your capacity, site and route.
How much CNSL do you get from one tonne of cashew shells?
About 220–230 kg. A June 2026 stock exchange disclosure for a planned Indian CNSL unit puts the yield at 22–23% of shell weight, with 72–73% left as shell cake sold as biomass fuel. Yield is lower when the kernel unit roasted or oil-bathed the nuts, because those methods already drive part of the liquid out of the shell.
What is cashew nut shell liquid used for?
Most CNSL goes into friction dust for brake linings and clutch facings, and into phenolic resins, epoxy curing agents, paints, varnishes, laminates and rubber compounds. It is also the feedstock for cardanol, which specialty chemical units refine further. Buyers value it as a plant-based phenol that can partly replace petroleum phenol in these uses.
What is the difference between natural CNSL, technical CNSL and cardanol?
Natural CNSL is the liquid taken out of the shell by cold pressing or solvents, and it is mostly anacardic acid. Heating converts anacardic acid into cardanol, which gives technical CNSL, the grade most buyers use. Cardanol itself is obtained by refining technical CNSL further, usually by vacuum distillation, which is a separate and costlier stage.
Which standard and licences apply to a CNSL plant?
BIS published IS 840:2026, the specification for cashewnut shell liquid, replacing the 1986 version; buyers often test supplies against it. The plant also needs Udyam and GST registration, consent from the State Pollution Control Board, a factory licence where thresholds apply and a fire NOC. The pollution category is set by each state board, so confirm it before buying land.
Is a CNSL plant profitable?
In our illustrative sample, a 5.4 MT per day plant earns a 20% return on investment in Year 3, breaks even at 37% of capacity and pays back in about 3.7 years, with an average DSCR of 1.76. Real profit depends mainly on the shell price, the yield you actually get and what the shell cake fetches as fuel.
Is the cashew nut shell liquid project report PDF free, and can I use it for a loan?
The sample is free to view and download. It is an illustrative report that shows the format and depth of an NPCS report; its figures are representative and not based on a real project, so it should not be submitted to a bank. For a loan, NPCS prepares a report for your own capacity, location, shell source and lender.
Sources and references
- IS 840:2026 Cashewnut shell liquid (CNSL): specificationBureau of Indian Standards, checked Oct 2026
- IS 840:1986 Cashewnut shell liquid (withdrawn)Bureau of Indian Standards, checked Oct 2026
- Project profile: cashew nut shell liquidOffice of the Development Commissioner (MSME), Government of India, checked Oct 2026
- Categorisation of industrial sectors under Orange categoryState Pollution Control Board, Odisha, checked Oct 2026
- Company disclosure on a proposed CNSL extraction facility (22 June 2026)National Stock Exchange of India, corporate filings archive, checked Oct 2026
The NPCS project team, led by Ajay Kumar Gupta
This page and its sample report are prepared and reviewed by the NPCS project team, which has written techno-economic feasibility studies and detailed project reports since 1994.
Ajay Kumar Gupta founded Niir Project Consultancy Services (NPCS) and leads the organisation. With 40 years of experience in MSME project consulting, he has built the team that has delivered more than 28,000 project reports for clients worldwide, helping entrepreneurs plan and finance profitable manufacturing businesses.
- Published
- Last updated
- Next review
- Oct 2027
- Reviewed by
- NPCS project team
This page is reviewed every 12 months, or sooner when scheme limits, GST rates, BIS rules or pollution categories change. The sample report is illustrative: its figures are generated from industry-typical ratios for a unit of this size, checked so every statement balances, and are not taken from any client project.