Economy, Domestic Economy

Oilseeds Ooze Money

Oilseeds Ooze Money Oilseeds Ooze Money

In recent years, growing attention has been paid to vegetable oil production, as they do not have the adverse health effects of trans fat and used in most cuisines.

In Iran, per capita consumption of vegetable oil amounts to nearly 18.5 kilograms annually, the Persian daily, Forsat-e Emrooz, reported.

“There are 28 oil extraction units in the country, some of which are not currently operating since they are newly founded or are on the verge of closure for not being able to overcome the challenges of the business,” said Akbar Sebghati, the head of Iranian Oilseed Extraction Industry Association.

He added that the nominal production of all units combined, provided they work at full capacity, amounts to 4.6 million tons per year—well above the domestic demand of 1.4 million tons.

“Three years ago, only 5% of this capacity were realized. It increased to 13% a year later and the figure rose to 26% last year,” he said. 

Sebghati said the promising growth could herald the fulfillment of the industry’s full capacity in the near future, though it requires proper policymaking and regulations to support domestic production.

He criticized the decisions made in the field over the past few years, which have led to unsystematic imports of the product and created impediments for business owners and potential investors.

“If the government lends its support to the industry and overhauls obstructive regulations, some 3,000 direct and close to 10,000 indirect jobs can be created,” he added.

Sebghati noted that the domestic production of oil from the seeds of grape, sesame and flax is less economical due to the low domestic  demand for these kinds of oil and inaccessibility of international markets.

“On the one hand, the raw material for the production of these oils is mostly imported and on the other, they are more expensive and therefore not as popular with consumers. Therefore, investors are reluctant to enter the field,” he said.

  “Unexplored Goldmine”

Industrial oil extraction has a long history and was conducted using hot pressing machines. Yet, due to their adverse environmental impacts, producers opted for cold pressing machines that are more environment-friendly.

“We manufacture cold pressing machines that extract oil on the industrial scale. Our products have not only been popular inside the country, but we have also had exports to the US and Europe, and received proposals for joint cooperation with them,” said Amir Mahmoud Moqaddasi, CEO of Iran Cold Pressing Company.

The business owner believes investment in the field using this kind of machinery for either small units or large firms can be highly profitable, describing the business as an “unexplored goldmine”. 

“One lucrative project could be investing in the production of coconut oil, which is used in petrochemical, cosmetics, detergents and foodstuff industries. Therefore, it has a big market, especially in Persian Gulf littoral states,” he said.

Moqaddasi said he is very optimistic about the industry’s future, adding that investors can reap a 40% profit in only five months. He said since the raw material is mostly imported, the best location to start such a business would be free trade and special economic zones to avoid getting hampered by customs regulations.

“The minimum capital required to found a coconut oil extraction unit in a 200-square-meter plot of land for instance is 15 billion rials (about $500,000 at market exchange rate). No fossil fuels are needed for the business, therefore, the process causes no environmental contamination while energy expenses are minimal,” he said.

According to Moqaddasi, the business allows the producer to kill two birds with one stone.

The main commodity produced is vegetable oil, while the residue is also highly valuable and can be sold as livestock feed.

“The added value of the product and the export opportunities it provides are so tempting that some producers of fruit juice have already invested in the area by adding oil extraction to their production lines,” he said.

“Many people have started small businesses in the country where oil is extracted from oilseeds in a shop in the presence of the customer. Depending on the size of the business, one can earn between $600 and $2,000 monthly.”