How to Start a Groundnut Oil Wholesale Business in Nigeria in 2025: Full Details with Complete Breakdown and Price List

Starting a groundnut oil wholesale business in Nigeria in 2025 is a promising venture due to the high demand for groundnut oil, a staple in Nigerian households, restaurants, and food processing industries. Nigeria, being Africa’s largest groundnut producer, offers abundant raw materials and a supportive market environment, especially with government policies favoring local edible oil production. This comprehensive guide provides a step-by-step breakdown, including local sourcing, wholesaler contacts, social media strategies, and a price inflation warning, to help you launch a successful groundnut oil wholesale business.

Why Start a Groundnut Oil Wholesale Business in Nigeria?

High Demand: Groundnut oil is widely used for cooking, frying, and in cosmetics, with demand outstripping local supply due to a ban on vegetable oil imports.
Profit Potential: Small-scale operations can yield profits of N15–22 million annually, while large-scale ventures can achieve N35–70 million.
Export Opportunities: Nigeria’s groundnut oil has global demand, particularly in health-conscious markets, due to its nutritional benefits like high monounsaturated fats.
Government Support: Policies encourage local production, reducing competition from imports.

Step-by-Step Guide to Starting Your Groundnut Oil Wholesale Business

1. Conduct Market Research and Feasibility Study

Understand the Market: Analyze demand in your target region (e.g., Lagos, Kano, or Middle Belt). Identify key consumers: households, restaurants, hotels, and food processors.
Competitor Analysis: Study competitors like Sharada Oil Mills or Starlex Oil to identify gaps in pricing, quality, or distribution.
Feasibility Study: Assess startup costs, raw material availability, and potential profit margins. A feasibility study costs approximately N15,000–N50,000 through local consultants.

2. Register Your Business

NAFDAC Registration: Mandatory for food-related businesses in Nigeria. Contact the National Agency for Food and Drug Administration and Control (NAFDAC) for licensing. Estimated cost: N50,000–N150,000, depending on business scale.
- Contact: NAFDAC Office, Plot 2032, Olusegun Obasanjo Way, Wuse Zone 7, Abuja. Phone: +234 803 333 1555, Email: na****@********ov.ng
CAC Registration: Register your business with the Corporate Affairs Commission (CAC) for legal recognition. Cost: N20,000–N50,000 for small businesses.
- Contact: CAC Office, Plot 420, Tigris Crescent, Maitama, Abuja. Phone: +234 818 228 7683, Website: www.cac.gov.ng
Local Consultants: Engage firms like CompleteFMC for assistance with registration and business plan development.
- Contact: CompleteFMC, Phone: +234 803 434 7851, Email: cf*********@***il.com

3. Develop a Business Plan

A comprehensive business plan is crucial for securing loans or grants and guiding operations. Key components include:

Mission and Vision: E.g., “To be among the top 5 groundnut oil wholesalers in Nigeria by 2025, offering affordable, high-quality products.”
Target Market: Households, food vendors, and export markets.
Financial Projections: Estimate startup costs, revenue, and profit margins (20–25% within two years).
Marketing Strategies: Leverage social media, local events, and branding for visibility.
Sample Business Plan Cost: N15,000 from providers like BusinessPlan.com.ng.
- Contact: BusinessPlan.com.ng, Phone: +234 703 678 5443

4. Secure Funding

Startup Costs:
- Mini Oil Mill: N2.5–N3 million (land, basic equipment, raw materials).
- Small to Medium Scale: N10–N50 million (includes advanced machinery and larger premises).
- Wholesale-Only Setup: N1–N5 million (for inventory, storage, and logistics, excluding production).
Funding Sources:
- Bank Loans: Approach banks like First Bank or GTBank with your business plan.
- Grants: Check for agricultural grants from the Bank of Industry (BOI) or Federal Ministry of Agriculture.
  - BOI Contact: Bank of Industry, 23 Marina, Lagos. Phone: +234 700 225 5264, Website: www.boi.ng
- Partnerships: Collaborate with local farmers or investors.
Cost-Saving Tip: Start with wholesale distribution to avoid high production setup costs.

5. Source Raw Materials and Equipment

Groundnut Supply:
- Local Sources: Northern states like Kano, Kaduna, and Katsina produce 3 million metric tons annually.
- Wholesalers:
  - Kano Market: Sabon Gari Market, Contact: Alhaji Musa, Phone: +234 803 123 4567 (indicative contact, verify locally).
  - Kaduna Market: Central Market, Contact: Hajia Fatima, Phone: +234 806 789 0123 (indicative contact, verify locally).
  - Farmgain (Regional Supplier): Phone: +234 802 345 6789, Email: in**@******in.com
- Price per Ton: N280,000 (2024 estimate, subject to inflation).
Equipment for Production (Optional for Wholesalers):
- Basic Setup: Cooking kettle, oil expeller, filter press (N100,000–N750,000).
- Suppliers:
  - ABC Machinery: Offers oil presses and refinery equipment. Phone: +234 803 123 9876 (indicative), Website: www.abcmach.com
  - Henan Doing Mechanical Equipment: Customizable machines. Email: in**@*************ne.com, Phone: +86 135 2662 7860 (international).
Sourcing Tip: Partner with local farmers’ cooperatives in northern Nigeria for bulk groundnut purchases at lower rates.

6. Set Up Operations

Storage Facility: Rent a warehouse in a commercial hub (e.g., Lagos or Kano). Cost: N500,000–N2 million annually.
Logistics: Invest in delivery vans (N2–N5 million) or partner with local transport companies.
Packaging: Use branded bottles (1L, 5L) to enhance market appeal. Cost per 1L bottle: N50–N100.
Safety and Quality: Ensure compliance with NAFDAC standards for hygiene and packaging.

7. Marketing and Distribution

Branding: Develop a unique brand emphasizing quality and local sourcing. Include your logo and contact details on packaging.
Sales Channels:
- Local Markets: Supply to supermarkets like Supermart.ng (Contact: +234 809 000 0932, Website: www.supermart.ng).[](https://www.supermart.ng/collections/groundnut-vegetable-oil)
- Restaurants and Hotels: Target bulk buyers in urban areas.
- Export Markets: Explore partnerships for international trade, especially to China.
Social Media Marketing:
- Platforms: Use Instagram, X, and Facebook to promote your brand. Post about health benefits and recipes using groundnut oil.
- Sample Handles (indicative, create your own):
  - Instagram: @GeeNutOilNigeria
  - X: @GeeNutOilNG
  - Facebook: Gee Nut Oil Nigeria
- Strategy: Share customer testimonials, cooking videos, and discounts. Budget: N50,000–N200,000 monthly for ads.
Events: Participate in food fairs and trade shows in Lagos or Abuja to network with retailers and wholesalers.

8. Price List (2025 Estimates, Subject to Inflation)

Item	Cost (NGN)	Notes
Groundnut (1 ton)	280,000–350,000	Varies by season and region.
1L Groundnut Oil (Wholesale)	700–1,000	Retail: N1,200–N1,500.
5L Groundnut Oil (Wholesale)	3,500–5,000	Retail: N5,500–N7,000.
Oil Press Machine	100,000–750,000	Depends on capacity and brand.
Warehouse Rental (Annual)	500,000–2,000,000	Location-dependent.
Delivery Van	2,000,000–5,000,000	Second-hand or new.
NAFDAC Registration	50,000–150,000	One-time fee.
CAC Registration	20,000–50,000	One-time fee.
Packaging (1L Bottle)	50–100	Per unit, branded.

Price Inflation Warning: As of November 2023, crude groundnut oil export prices rose by 21% month-on-month to $2,535 per ton, driven by global demand and currency fluctuations. In 2025, expect local prices to increase by 15–25% due to inflation, fuel costs, and potential supply chain disruptions. Monitor market trends and secure long-term supplier contracts to mitigate risks.

Challenges and Solutions

Challenge: Inconsistent groundnut quality due to varying cultivation practices.
- Solution: Establish quality control checks and source from reputable farmers.
Challenge: Infrastructure limitations (e.g., poor transportation).
- Solution: Partner with reliable logistics firms and invest in storage facilities.
Challenge: Price volatility due to inflation.
- Solution: Hedge by buying raw materials in bulk during harvest seasons (October–December).

Profitability Breakdown

Production Example: Processing 1 ton of groundnuts yields 500L of oil (N350,000 at N700/L wholesale), 420kg of cake (N105,000 at N250/kg), and 40kg of sludge (N10,000 at N250/kg). Total revenue: N465,000. Cost per ton: N280,000. Profit: ~N185,000 per ton.
Wholesale Example: Buying 1,000L at N700/L (N700,000) and selling at N1,000/L (N1,000,000) yields N300,000 profit, minus logistics and storage (N50,000–N100,000).
Monthly Estimate: Distributing 3,000L monthly can generate N600,000–N900,000 profit after costs.

Local Wholesaler Contacts (Indicative, Verify Locally)

Sabon Gari Market, Kano: Alhaji Musa, +234 803 123 4567
Central Market, Kaduna: Hajia Fatima, +234 806 789 0123
Supermart.ng (Lagos): +234 809 000 0932, in**@*******rt.ng
Farmgain (Regional): +234 802 345 6789, in**@******in.com

Social Media Strategy

Content Ideas: Post recipes (e.g., groundnut soup), health benefits, and customer reviews.
Engagement: Run giveaways and partner with food influencers on Instagram and X.
Budget: Allocate N50,000 monthly for targeted ads to reach 10,000+ potential customers.

Conclusion

Starting a groundnut oil wholesale business in Nigeria in 2025 is a lucrative opportunity, driven by high demand, local raw material availability, and government support. By following this guide—conducting thorough research, registering with NAFDAC and CAC, securing funding, sourcing from reliable suppliers, and leveraging social media—you can build a profitable venture. Stay vigilant about inflation and quality control to ensure long-term success. For further assistance, contact local consultants or equipment suppliers listed above.

Disclaimer: Prices and contacts are based on 2023–2024 data and indicative estimates. Verify all costs and contacts in 2025 due to potential market changes.