A comparative efficiency analysis of cold pressed groundnut oil production units in Chitradurga district of Karnataka

This study evaluates the economic and operational aspects of cold-pressed oil production in Chitradurga district, Karnataka, focusing on establishment costs, profitability, and a comparative analysis of 5 HP, 10 HP, and 15 HP expeller capacities. Cold-pressed oil extraction, a traditional and natural process, is gaining popularity due to its health benefits. The cold-pressed oil industry has seen significant growth, driven by shifting consumer preferences towards healthier, more natural food options. Using primary data from 30 processing units across six taluks, the research examines establishment costs, profitability, and efficiency. Machinery and fixtures were the largest establishment cost, comprising over 60 per cent of the total investment, followed by land and building expenses. Among the units, the 15 HP expeller demonstrated the highest capacity utilization (51.70%), while the 10 HP expeller, the most commonly used, reported the lowest capacity utilization (41.85%). Profitability analysis revealed that raw material costs made up the largest portion of variable expenses (69.25% for 10 HP expellers), while oil sales contributed about 78 per cent, and oilcake contributed 22 per cent of total returns. The return on investment was highest for the 15 HP expeller, emphasizing the advantages of scaling up production. The study identifies key challenges, such as irregular raw material supply, electricity fluctuations, and labour shortages, which impact operational efficiency. Policy recommendations include fostering partnerships with oilseed producers, promoting e-commerce platforms, and enhancing government support for infrastructure and skill development, particularly for self-help groups. The findings highlight the growing consumer preference for cold-pressed oils, suggesting that addressing supply chain inefficiencies and adopting innovative marketing strategies are crucial for sustained growth.