What is a cashew nut shell oil project report?
A cashew nut shell oil project report is a detailed project report (DPR) for a plant that presses the dark, phenolic liquid out of cashew shells left after kernel processing. It sets out shell supply, process, machinery, project cost, means of finance, five-year projections, DSCR and break-even for a bank or investor.
Cashew processors adding a by-product line, chemical traders and new promoters near cashew clusters use it to size the plant and raise a term loan; lenders use it to test repayment.
Also known as: CNSL project report, cashew nut shell liquid project report, cashew shell oil plant DPR, cashew nut shell oil business plan.
Cashew nut shell oil plant cost and economics
The sample report models a plant that presses 5 MT of oil per day from bought-in shells, 330 days a year. It starts at 60% of capacity, reaches 80% in Year 5 and sells technical grade oil at ₹47,500 per MT.
Plant and machinery is the largest cost at ₹132.01 lakh, about half the project. Working capital is sized for 60 days of shell stock. The Year 1 requirement is ₹92.61 lakh, and the bank funds ₹69.46 lakh of it as cash credit.
| Land and site development | 18.50 |
|---|---|
| Building and civil works | 63.45 |
| Plant and machinery | 132.01 |
| Other fixed assets | 17.12 |
| Contingencies | 9.77 |
| Preliminary and pre-operative | 6.02 |
| Working capital margin | 23.15 |
| Total | 270.02 |
| Promoter's contribution (25%) | 67.50 |
|---|---|
| Term loan from bank (75%) | 202.52 |
| Cash credit limit (separate) | 69.46 |
| Total project cost | 270.02 |
Term loan at 10.5% with a 6-month moratorium and 54 monthly instalments. The lowest yearly DSCR is 1.78. All figures are illustrative.
Cashew nut shell oil manufacturing process
The liquid sits in the honeycomb layer between the outer and inner shell. A stand-alone plant works on shells left after kernels are removed, presses the liquid out and heats it to a stable technical grade.
- Shell receipt and drying
Each lot is checked for moisture and leftover kernel pieces, then dried, because wet shells press poorly and add water to the oil.
- Conditioning
Shells are warmed in a heated conditioner so the thick, sticky liquid flows when pressed.
- Expelling
Heavy-duty screw expellers crush the shells and squeeze out the liquid; the pressed shell leaves as de-oiled cake.
- Settling and filtration
Crude oil stands in settling tanks, then a filter press removes shell fines and free water.
- Heat treatment
The filtered oil is heated in a jacketed vessel, which converts anacardic acid to cardanol and gives technical CNSL with steadier viscosity.
- Testing and drumming
Every batch is checked for viscosity, specific gravity and moisture before filling in drums or tankers.
- Cake handling
Part of the de-oiled cake fires the thermic fluid heater; the rest is bagged and sold as boiler fuel.
Which CNSL extraction method should you choose?
The route decides the grade you sell. Heat turns most of the anacardic acid in raw CNSL into cardanol, so thermally extracted technical CNSL holds about 60–65% cardanol. Cold solvent extraction gives natural CNSL with 60–65% anacardic acid, which only a few specialty buyers ask for.
| Expeller pressing of shells | Screw expellers press shells from steam-cooked nuts. Needs no link to a kernel line, so it suits a stand-alone plant. This is the route in our sample report. |
|---|---|
| Hot oil bath | Whole raw nuts are dipped in CNSL held at 185–190 °C for about 1½–4 minutes, which releases part of the liquid into the bath. It runs inside a kernel factory and the shells still need pressing afterwards. |
| Drum or open-pan roasting | Older method in which much of the liquid burns off or polymerises, with heavy smoke. Recovery is low and pollution boards look at it closely. |
| Solvent extraction | Hexane extracts natural CNSL from pressed cake or shells. Yields are higher but solvent recovery, storage safety and cost make it a second-stage add-on rather than a first plant. |
Cashew shells, oil yield and raw material cost
Shells make up most of the cost. The sample shows shell cost net of de-oiled cake sales. Cake sells at a few rupees a kilo as boiler fuel and recovers a large part of what the shells cost. Shell asking prices across Indian clusters ran from about ₹8 to ₹20 per kg as of October 2026 (indicative), with fuel-grade lots at the low end.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Cashew nut shells, net of de-oiled cake sales | 95% | 272.74 |
| Filter aids and process chemicals | 5% | 14.35 |
| Total | 100% | 287.09 |
Raw materials are 52.3% of sales in the sample, which holds 60 days of shell stock because shell supply follows the kernel season.
Machinery for a cashew nut shell oil plant
The screw expellers are the largest item, at about 35% of the machinery cost in the sample. Expeller worms and cages wear fast on hard, gritty shells, so spares belong in the budget.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Heavy-duty screw expellers | Crush shells and press out the oil | 46.21 |
| Heated shell conditioner | Warms shells so the oil flows | 15.84 |
| Thermic fluid heater | Supplies heat, fired on de-oiled cake | 15.84 |
| MS settling and storage tanks | Settle crude oil and hold stock | 15.84 |
| Shell conveyors and bucket elevator | Feed shells to the expellers | 10.56 |
| Filter press with transfer pumps | Removes fines and water | 10.56 |
| Cake conveyor and bagging unit | Moves and bags de-oiled cake | 6.60 |
| Electrical panel and pipelines | Power distribution and oil lines | 6.60 |
| Quality control laboratory | Viscosity, specific gravity and moisture tests | 3.96 |
| Total plant and machinery | 132.01 | |
Costs are the sample report's estimates for a 5 MT per day plant. Get current quotations before you finalise.
Licences and standards for a CNSL unit
| Business registration | Udyam (MSME) registration and GST registration |
|---|---|
| Pollution board consent | Consent to establish and operate from the State Pollution Control Board. Cashew nut processing is listed in the Orange category under CPCB criteria; CNSL extraction is not named separately, so confirm the category with your state board |
| Product standard | IS 840:2026, the BIS specification for cashew nut shell liquid, replaced the 1986 edition and is the reference buyers use for quality |
| Factory licence | Under the Factories Act where worker and power thresholds apply; rules vary by state |
| Fire safety | Fire NOC for drum and tank storage of oil and for the cake store, as the state requires |
Who buys cashew nut shell oil in India?
CNSL is a plant-based phenol, so it sells to industries that would otherwise use petroleum phenol. Buyers judge a supplier on viscosity, moisture and lot-to-lot consistency, and an approved supplier tends to keep the account. Shells come from kernel units in Kerala, Tamil Nadu, Karnataka, Goa, Maharashtra, Andhra Pradesh and Odisha, so a plant near a cashew cluster saves freight on a bulky raw material.
- Friction dust and brake lining makers
- Epoxy curing agent (phenalkamine) and resin producers
- Paint, varnish and anticorrosive coating manufacturers
- Cardanol distillers
- Chemical traders and exporters
Most exports are cardanol, not crude oil: APEDA data for 2024-25 shows 7,525.92 MT of cardanol exported against 971.69 MT of CNSL. A crude CNSL plant therefore sells mainly to Indian distillers and resin makers.
Mistakes that weaken a cashew nut shell oil project report
- Using the shell's full oil content as yield
Laboratory content is well above what an expeller recovers. Revenue built on 30% recovery fails the first bank review.
- Counting de-oiled cake twice, or not at all
Cake either offsets shell cost or appears as by-product sales. Showing it in both places inflates profit; leaving it out hides real income.
- No plan for the shell season
Shells are cheapest during peak kernel processing. Without stock days and storage in the plan, working capital comes out too small.
- Overheating the oil
CNSL thickens and polymerises when held too hot for too long, and buyers reject high-viscosity lots. Temperature control belongs in the process design.
- No budget for worker protection
The liquid blisters skin. Gloves, aprons, washing points and closed transfer lines are running costs, not extras.
How NPCS helps you set up a cashew nut shell oil plant
- Shell sourcing and yield balanceSize the plant to the shells you can buy and set a realistic oil and cake balance.
- Route and gradeCompare expeller, hot oil bath and solvent stages for crude or technical CNSL.
- Bank-ready project reportProjections, DSCR and working capital with shell-season stock, in your lender's format.
- Machinery, layout and approvalsExpeller and heater quotations, tank farm layout and the consent list for your state.
NPCS's client list shows 3 assignments for cashew nut shell oil and 269 in specialty chemicals. The NPCS project team, led by founder Ajay Kumar Gupta, has prepared project reports since 1994.
What's inside the cashew nut shell oil 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 |
Real NPCS cashew nut shell oil project reports
These are cashew nut shell oil project reports NPCS has prepared, with the plant capacity, total capital investment, rate of return and break-even worked out in each. Costs have moved since some were written, so we bring any of them up to date for your capacity and location.
| Project report | Plant capacity | Total investment | Rate of return | Break-even | Action |
|---|---|---|---|---|---|
| Cashew Nut Shell Oil | Cashew Nut Shell Oil, : 1500 MT/Annum De-Oiled Cashew Nut Shell Cake (bye Product), : 13000 MT/Annum | ₹1.59 crore | 27% | 57% | Get this report |
| Cardanol from Cashew Nut Shell Oil | Cardanol:24 MT Per Day | ₹6.58 crore | 28% | 60% | Get this report |
| Extraction of Cashew Nut Shell Oil and Cardanol | Cashew Nut Shell Oil 11.0 MT per day Cardanol 5.5 MT per day De-Oiled Cashew Nut Shell Cake (bye Product) 78.0 MT per day | ₹7.52 crore | 26.7% | 52.5% | Get this report |
Figures as worked out in each NPCS report. Total investment includes plant and machinery, land and building, and working capital.
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Cashew Nut Shell Oil project report: frequently asked questions
What is the cashew nut shell oil manufacturing plant cost in India?
A small expeller unit making 1–2 MT of oil per day needs roughly ₹60–120 lakh. An 8–10 MT per day plant with heat treatment and a tank farm needs about ₹3.5–6 crore. Our sample report models a 5 MT per day plant at ₹270 lakh. These are indicative figures; your report works out the cost for your capacity, site and shell source.
How much oil do cashew nut shells give?
Shells hold roughly 25–35% liquid by weight, depending on the nut and the method used to measure it, but a plant recovers less. Expeller plants usually plan for about 18–23% of shell weight as oil (indicative). The rest leaves as de-oiled cake, moisture and sludge, so the report must show a shell-to-oil balance.
Is cashew nut shell oil the same as CNSL?
Yes. Cashew nut shell oil, cashew shell oil and cashew nut shell liquid (CNSL) are the same product. It is not the edible oil pressed from cashew kernels. Heated CNSL is called technical CNSL and is rich in cardanol, while solvent-extracted natural CNSL is mostly anacardic acid.
What is cashew nut shell oil used for?
Most CNSL goes into friction dust for brake linings and clutch facings, phenalkamine curing agents for epoxy coatings, anticorrosive paints and varnishes, and laminating and foundry resins. Distillers refine it into cardanol, which India exports in larger volumes than crude CNSL. The de-oiled cake is sold as boiler fuel.
Is the cashew nut shell oil business profitable?
In our illustrative sample, a 5 MT per day plant earns a 26% return on investment in Year 3. It breaks even at 36% of capacity and pays back in about 3.2 years. Real profit depends most on shell price, oil recovery, the value of de-oiled cake and whether you sell crude or technical grade.
Which licences does a CNSL plant need?
You need Udyam and GST registration and consent to establish and operate from the State Pollution Control Board. Add a factory licence where thresholds apply and a fire NOC for drum and tank storage. IS 840:2026 is the BIS specification buyers refer to for quality. Confirm the pollution category with your state board before you buy land.
Is the cashew nut shell oil 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, not from a real project, so do not submit it to a bank. For a loan, NPCS prepares a report on your own capacity, shell source and location.
Sources and references
- IS 840:2026 Cashewnut shell liquid (CNSL): specificationBureau of Indian Standards, checked Oct 2026
- Cashew: product profile and export statisticsAgricultural and Processed Food Products Export Development Authority (APEDA), checked Oct 2026
- Categorisation of industrial sectors under Orange as per CPCB criteriaState Pollution Control Board, Odisha, checked Oct 2026
- Project profile: cashew nut shell liquid (Feb 2003)Office of the Development Commissioner (MSME), Government of India, checked Oct 2026
- From cashew nut shell wastes to high value chemicalsIUPAC, Pure and Applied Chemistry, checked Oct 2026
- Processing of cashew nuts and production of CNSL on a commercial scale in Sri LankaJournal of the National Science Foundation of Sri Lanka, 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.