Refined Edible Oil Processing Facility

Project Overview

An Indian FMCG and agricultural processing major and a European solvent extraction and edible oil refining technology partner engaged IMARC Engineering to establish a greenfield oilseed processing, solvent extraction, and edible oil refining facility at Neemuch, Madhya Pradesh. The project was structured against the Government of India's National Mission on Edible Oils – Oilseeds (NMEO-OS) approved by the Union Cabinet on 3 October 2024 with a financial outlay of INR 10,103 Crore, implementation window from FY 2024-25 to FY 2030-31, and administered by the Ministry of Agriculture and Farmers Welfare, targeting the transformation of India's edible oil sector from the current 57 percent import dependence (representing approximately INR 1.4 lakh Crore of annual foreign exchange outflow) toward Atmanirbharta (self-sufficiency) in edible oil production.

The Mission targets a combined domestic edible oil production of 25.45 million tonnes by 2030-31 (across the NMEO-Oilseeds and NMEO-Oil Palm components the latter approved in 2021 with a INR 11,040 Crore outlay), covering approximately 72 percent of India's projected domestic edible oil requirement. NMEO-OS focuses on nine primary oilseed crops (Rapeseed-Mustard, Groundnut, Soybean, Sunflower, Sesamum, Safflower, Niger, Linseed, and Castor) alongside enhanced extraction from secondary sources including cottonseed, rice bran, and Tree-Borne Oilseeds, with implementation across 347 identified oilseed-priority districts, prioritisation of small and marginal farmers (below 2 hectares), targeted expansion of oilseed cultivation into 40 lakh hectares of rice and potato fallow lands, and continuation of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) framework ensuring farmers receive Minimum Support Price through the price support scheme and price deficiency payment scheme.

The project involved establishing 120,000 tonnes per annum of oilseed feedstock processing capacity across a 90,000 tonnes soybean and 30,000 tonnes rapeseed-mustard product mix, leveraging Madhya Pradesh's dominant position as India's largest soybean-producing state alongside the Malwa plateau's border adjacency to the Rajasthan mustard belt, yielding approximately 27,300 tonnes per annum of refined edible oil (approximately 23 percent oil yield on the blended feedstock) and 92,700 tonnes per annum of de-oiled cake supporting the growing Indian animal feed and soy-protein-adjacent food ingredient demand. Site infrastructure was designed for Phase 2 expansion adding a specialty co-product line for soybean lecithin, tocopherol concentrates, and food-grade de-oiled protein isolates.

Client's Challenges

The client faced several specific challenges in establishing greenfield oilseed processing and edible oil refining in India:

• Multi-oilseed feedstock handling: Engineering the pre-processing, dehulling, flaking, and conditioning infrastructure capable of handling the variable moisture, oil content, and impurity profile of the Malwa soybean crop alongside the higher-oil-content rapeseed-mustard feedstock, with associated seed cleaning, drying, and storage silos sized for the seasonal harvest cycle across the Kharif soybean and Rabi mustard windows.
• Solvent extraction process engineering: Engineering the hexane-based solvent extraction process across the multi-oilseed feedstock comprising the extractor design, desolventiser-toaster operation, distillation and solvent recovery loop, and safety-critical solvent handling infrastructure meeting Petroleum and Explosives Safety Organisation (PESO) requirements alongside food-grade hygiene standards.
• Edible oil refining precision: Engineering the four-step edible oil refining sequence comprising degumming, neutralisation (alkali refining), bleaching, and deodorisation required to produce refined edible oil meeting relevant BIS standards alongside FSSAI Edible Oil Regulations food safety compliance across the operational batch cycle.
• Farmer supply chain from NMEO priority districts: Structuring a farmer supply chain drawing on the surrounding NMEO-OS priority districts across the Malwa plateau, with approximately 32,000 farmer registrations targeted for Year-2 operations across the small and marginal grower base (below 2 hectares), through Farmer Producer Organisation (FPO) partnerships, structured price signalling above PM-AASHA MSP where market conditions permit, and coordinated Agmark grading at the procurement point.
• FSSAI and BIS compliance across product portfolio: Achieving FSSAI edible oil regulations compliance across the refined soybean oil and refined mustard oil product families, alongside relevant BIS standards the required credentials for FMCG edible oil brand aggregator supply, institutional buyer participation, and cooperative distribution network offtake.
• Workforce build-up: Recruiting 200 personnel including chemical process engineers, food safety specialists, quality technicians, and skilled process operators in the Neemuch regional labour market that hosts the broader Malwa oilseed processing ecosystem alongside the surrounding agricultural extension network.

What We Did

• Pre-Investment and Strategic Advisory

Our feasibility study evaluated four candidate Indian locations Neemuch (Madhya Pradesh), Ratlam (Madhya Pradesh), Latur (Maharashtra), and Bikaner (Rajasthan) with Neemuch selected on the strength of Madhya Pradesh's dominant position as India's largest soybean-producing state (contributing approximately 45 percent of national soybean production alongside meaningful mustard and sesame cultivation), the Malwa plateau's border adjacency to the Rajasthan mustard belt providing complementary rapeseed-mustard feedstock supply, established road connectivity to the Northern, Western, and Central Indian FMCG edible oil brand aggregator distribution networks, the Madhya Pradesh Industrial Investment Promotion Policy framework alongside the state's agricultural processing incentive support, and access to engineering talent from IIT Indore, MANIT Bhopal, and the surrounding agricultural university and technical education base.

CapEx planning of INR 190 Crore covered the seed cleaning, dehulling, and storage area, the solvent extraction line with associated solvent recovery loop, the four-stage edible oil refining line, the specialty co-product handling area, the quality laboratory, the effluent treatment plant, and central utilities. Financial modelling demonstrated post-tax IRR of 19.8 percent at full ramp with a 5.6-year payback.

• Engineering and Design Services

IMARC designed an 18,000 sq.m built-up facility on a 12-acre plot comprising the seed receiving, cleaning, dehulling, and storage area with dedicated soybean and rapeseed-mustard silos sized for the seasonal harvest cycle, the seed conditioning and flaking area, the solvent extraction line comprising the extractor, desolventiser-toaster, and solvent recovery infrastructure engineered to Petroleum and Explosives Safety Organisation (PESO) safety standards for hexane handling, the four-stage edible oil refining line covering degumming, neutralisation, bleaching, and deodorisation, the finished refined oil storage and packaging area, the de-oiled cake handling and pelletising area engineered for animal feed customer despatch, the quality laboratory covering gas chromatography, ultraviolet-visible spectrophotometry, and full FSSAI Edible Oil Regulations testing infrastructure, the effluent treatment plant meeting Madhya Pradesh State Pollution Control Board specifications, and central utilities.

Process utility design covered 2.4 MW grid demand supplemented by a captive biomass-fired boiler (using rice husk and agricultural biomass from the surrounding Malwa agricultural residue base as feedstock, delivering approximately 38 percent of facility thermal energy demand) alongside a 0.8 MW captive rooftop solar array, dedicated compressed air and specialty gas supply, integrated MES for lot-level and farmer-level traceability aligned with FSSAI and NMEO documentation, and dedicated dust and volatile organic compound extraction across the seed handling and solvent extraction operations.

• Procurement and Supply Chain Support

We executed a multi-geography procurement programme across 36 critical vendors. Seed cleaning, dehulling, and conditioning equipment was sourced from established European and Chinese specialists with documented oilseed processing industry references. Solvent extraction line equipment including extractor, desolventiser-toaster, and solvent recovery infrastructure was sourced from established European specialists with proven Indian oilseed industry deployment references.

Edible oil refining line equipment covering degumming, neutralisation, bleaching, and deodorisation was sourced from European specialists with documented FSSAI-compliant refining industry references. Quality laboratory equipment covering gas chromatography, spectrophotometry, and food-safety testing was sourced from European and US specialty analytical equipment specialists. Effluent treatment plant infrastructure was sourced from Indian water technology specialists.

Oilseed feedstock sourcing was structured through the surrounding Farmer Producer Organisation network, direct farmer procurement arrangements, and mandi-linked procurement, drawing on approximately 32,000 farmer registrations across the NMEO priority districts of the Malwa plateau by Year-2 operations. Documented Domestic Content reached 92 percent in Year-1 operations and 96 percent in Year-2 reflecting the near-complete domestic sourcing of oilseed feedstock alongside progressive localisation of bleaching earths, refining catalysts, and packaging materials.

• Project Execution and Site Management

Our turnkey project management delivered 20 months from groundbreaking to first commercial refined edible oil despatch, coordinating civil construction, mechanical and electrical erection, PESO safety compliance for the solvent handling zones, equipment integration, and phased commissioning across the seed handling, solvent extraction, refining, and packaging zones.

Phased commissioning ran the seed cleaning, dehulling, and storage area first (as the critical-path bottleneck for first feedstock availability), followed by the solvent extraction line with initial crude oil production in month 17, then the four-stage refining line with the first refined soybean oil batch completed in month 19, and finally the finished oil packaging and de-oiled cake pelletising areas with the first commercial refined edible oil despatch to a FMCG edible oil brand aggregator in month 21.

Multi-vendor coordination across European, Chinese, and Indian contractors required a 12-strong owner's engineering team supplemented by 5 European resident engineers from the solvent extraction and refining technology partner during the extractor commissioning and initial FSSAI qualification phases.

• Compliance, Quality and Sustainability

IMARC led certification readiness across different product portfolio in Year-1 of operations FSSAI Edible Oil Regulations compliance verification across both product families, Agmark grading standards verification, Petroleum and Explosives Safety Organisation (PESO) hexane handling safety compliance, Codex Alimentarius international edible oil specification compliance for export-oriented supply, and ISO 9001:2015, ISO 14001:2015, ISO 22000:2018 (Food Safety Management), ISO 45001:2018, and ISO 50001:2018 management system certifications.

Environmental compliance covered Madhya Pradesh State Pollution Control Board Consent to Establish and Operate, Hazardous Waste Authorisation for spent bleaching earths and refining process residues, and Extended Producer Responsibility commitments for end-of-life packaging material recovery under the Plastic Waste Management Rules 2022 framework.

The facility achieved IGBC Gold certification through captive biomass-fired thermal energy from rice husk and agricultural residues covering approximately 38 percent of facility thermal energy demand, 0.8 MW captive rooftop solar covering approximately 16 percent of facility daytime electrical energy demand, heat recovery from the deodorisation operations, variable-frequency drives across HVAC and process pump systems, and 20 percent lower facility energy intensity versus the Southeast Asian edible oil refining industry benchmark.

Final Results

Operational Performance

The facility achieved mechanical completion in 20 months with first commercial refined edible oil despatch in month 21. Full 120,000 tonnes per annum nameplate oilseed processing capacity was reached at 76 percent utilisation (equivalent to 91,200 tonnes of oilseed feedstock processed in Year-2, yielding approximately 20,748 tonnes of refined edible oil and 70,452 tonnes of de-oiled cake), with FSSAI Edible Oil Regulations verification across the batch cycle.

Agmark grading recognition was secured across the refined soybean oil and refined mustard oil product families, and successful supplier qualification audits were passed with three FMCG edible oil brand aggregators, two agricultural cooperative distribution networks, and two animal feed manufacturers across the first operational year.

Financial Outcomes

Final CapEx of INR 180 Crore delivered 5.3 percent savings against the INR 190 Crore budget through optimised civil packaging, disciplined Indian-fabrication leverage across the structural and process infrastructure scope, adjacency benefits from the Malwa oilseed processing ecosystem for auxiliary supplier ecosystem, and Madhya Pradesh Industrial Investment Promotion Policy incentive framework benefits alongside NMEO-OS auxiliary infrastructure support.

Year-2 revenue of INR 490 Crore was generated at an EBITDA margin of 6 percent, consistent with established Indian oilseed processing sector economics where commodity edible oil pricing carries structural margin pressure, a margin trajectory supported by the growing Indian edible oil demand pipeline as the Government of India progresses toward the 25.45 million tonne domestic production target by 2030-31 alongside disciplined co-product utilisation of the de-oiled cake for animal feed and food-ingredient markets.

Market Access

Long-term supply commitments were signed with three FMCG edible oil brand aggregators covering committed annual refined soybean oil and refined mustard oil offtake for the aggregators' branded and private-label edible oil portfolios serving the Northern, Western, and Central Indian consumer markets, two agricultural cooperative distribution networks covering cooperative-branded edible oil offtake for the surrounding Malwa and adjacent Vindhya agricultural belts, and two animal feed manufacturers covering de-oiled cake offtake for the poultry, dairy, and aquaculture feed manufacturing supply chain.

The farmer supply base reached approximately 32,000 registered growers by Year-2 across the surrounding NMEO priority districts, with structured price signalling above PM-AASHA Minimum Support Price wherever seasonal market conditions permitted, delivering measurable farm-gate income uplift alongside the Government's Atmanirbhar Bharat edible oil localisation objective.

Sustainability Impact

Our integrated design combining captive biomass-fired thermal energy from rice husk and agricultural residues covering approximately 38 percent of facility thermal energy demand, 0.8 MW captive rooftop solar covering approximately 16 percent of facility daytime electrical energy demand, heat recovery from the deodorisation operations, variable-frequency drives across HVAC and process pump systems, and LED lighting throughout achieves 20 percent lower facility energy intensity versus the Southeast Asian edible oil refining industry benchmark. Process water reclamation is delivered through closed-loop cooling cycles and effluent treatment plant recovery.

The refined edible oil produced by the facility directly substitutes imported edible oil (India currently imports approximately 57 percent of edible oil demand), reducing the well-to-consumer greenhouse gas emissions and shipping-associated impacts of the imported oil supply chain alongside foreign exchange conservation. Spent bleaching earths are structured for recovery through binding into biomass boiler fuel blend, and packaging material recovery partnerships are established under the Plastic Waste Management Rules 2022 framework.

Strategic Impact

The project established a meaningful greenfield oilseed processing and edible oil refining capability under the National Mission on Edible Oils – Oilseeds framework, positioning the client across the structural Indian edible oil Atmanirbharta trajectory with the NMEO-OS INR 10,103 Crore programme through 2030-31 targeting a fundamental reduction in India's 57 percent edible oil import dependence, the combined NMEO 25.45 million tonne domestic edible oil production target by 2030-31 covering approximately 72 percent of projected domestic requirement, the 347 identified oilseed-priority districts implementation footprint, and the 40 lakh hectare cultivation expansion into rice and potato fallow lands creating a growing farm-gate feedstock base.

Year-2 revenue of INR 490 Crore, FSSAI and BIS compliance across the product portfolio, three FMCG edible oil brand aggregator supply commitments, and the 32,000-farmer supply network led the client to approve Phase 2 expansion comprising a specialty co-product line for soybean lecithin, tocopherol concentrates, and food-grade de-oiled protein isolates.

IMARC Engineering's end-to-end EPCM advisory, combining solvent extraction and refining engineering, farmer supply chain design across NMEO priority districts, FSSAI and BIS compliance readiness, and disciplined multi-vendor execution, enabled the client to anchor a strategically important Indian industrial asset in a sector positioned at the intersection of India's food security agenda, the accelerating Atmanirbhar edible oil transition, and the rural livelihood expansion embedded in the NMEO priority district framework.