Project Report for Cashew Industry
India processes more cashew nuts than any other country in the world, importing raw cashew nuts (RCN) from Africa and processing them into kernels for home and export use. A cashew processing plant is a food manufacturing enterprise that takes raw nuts and produces graded kernels, with cashew shell liquid (CNSL) as a valuable byproduct. Sharda Associates generates CA-certified cashew processing project reports. Starting at Rs. 2,999.
Get Your Report
What Is a Cashew Processing Business?
A cashew processing facility is an agricultural manufacturing company that turns raw cashew nuts (RCN) into processed cashew kernels, which are edible and shelf-stable products offered in retail, food production, and export markets.
India is the world’s largest cashew nut processor, processing both domestically grown RCN (from Kerala, Goa, Maharashtra, Odisha, Andhra Pradesh, and Karnataka) and imported RCN (from West Africa, including Ivory Coast, Tanzania, Mozambique, and Guinea-Bissau). The processing sector is concentrated in coastal locations where RCN is available, although interior processing units that source imported RCN through major ports are also viable.
The business plan is to buy RCN at raw material cost, process it through the shelling-peeling-grading-packaging chain, and sell finished kernels at a much higher price — with cashew shell liquid (CNSL, produced during shelling) serving as an additional byproduct revenue stream.
At the MSME level, a cashew processing plant processes 100-500 MT of RCN per season, yielding roughly 20-25% of the input weight as kernels.
The Processing Chain — Raw Cashew to Finished Kernel
Step 1 — Raw material procurement: RCN is obtained from farmers (in growing states) or imported via Cochin, Mumbai, or Visakhapatnam ports. RCN quality (moisture content, nut count per kg, and outturn ratio) affects kernel yield and grade.
Step 2 — Steaming: RCN steamed at 100-105°C for 20-45 minutes to soften the shell and reduce the caustic CNSL content, making the shell simpler to cut without contaminating the kernel.
Step 3 — Shelling: The steamed nuts are shelled with mechanical shelling devices (drum shellers or centrifugal shellers) or by hand, separating the kernel and shell. Mechanical shelling is faster but results in more broken kernels, whereas hand cutting yields more entire kernels. CNSL is collected as it flows out during shelling.
Step 4 — Drying: Shelled kernels (with testa/skin still on) are dried in ovens at 60-80°C for 4-6 hours to reduce moisture content, facilitate peeling, and improve shelf stability.
Step 5: Peeling (skin removal): The dried testa (red-brown skin) is removed manually or with semi-automatic peeling equipment. This is the most labor-intensive step. Kernel quality (whiteness, breakage) is mostly determined here.
Step 6: Grading and sorting: Kernels are evaluated on size and quality. W180 (Jumbo) is a premium export grade with around 180 kernels per pound and the highest price. W210, W240, and W320 are standard grades, with W320 being the most commonly traded globally. W450 (smaller kernels): Economical grade. Broken/split grades (B, S, LP, SP): Low-cost domestic market.
Step 7 — Fumigation and packing: Graded kernels are vacuum-packed in aluminum or tin containers (flushed with CO2 or nitrogen to remove oxygen) for shelf stability. FSSAI label was applied.
CNSL — The By-Product That Changes the Economics
Cashew Nut Shell Liquid (CNSL) is extracted during the shelling process—a dark brown industrial liquid that is a really useful industrial raw material.
CNSL is used in a variety of products, including paints and varnishes, industrial resins, waterproofing compounds, insecticides, and friction materials (such as brake linings and clutch facings).
The value of CNSL ranges from Rs.30 to Rs.70 per kg, depending on grade and demand. A facility processing 300 MT of RCN produces about 15-18 MT of CNSL, which is worth Rs.4.50-12.60 lakh at current pricing.
This by-product revenue is frequently overlooked in project reports, despite the fact that it significantly enhances the business case and DSCR calculation.
Cashew Kernel Grades and Pricing
Grade | Description | Approx. price (Rs./kg) |
W180 (Jumbo) | ~180 kernels/lb, whole, white | Rs.900-1,200 |
W240 | ~240 kernels/lb, whole | Rs.800-1,000 |
W320 (Most traded) | ~320 kernels/lb, whole | Rs.700-900 |
W450 | ~450 kernels/lb, smaller whole | Rs.600-750 |
Broken (B, S grades) | Broken pieces | Rs.350-550 |
Pricing fluctuates with global RCN supply, USD exchange rate (cashew is priced globally in USD), and domestic demand. A unit producing primarily W320 whole kernels targets both export and domestic institutional buyers.
Market and Sales Channels
Domestic retail and branded packaging: Cashew kernels are packaged and sold to grocery stores, kirana shops, and online (Amazon, BigBasket, Flipkart) under the processor’s own brand or private label. The highest margin channel.
Bulk supply to food manufacturers: Confectionery companies, bakeries, hotel chains, and airline catering buy big quantities at wholesale pricing. Volume companies have lower margins than retail, but continuous large orders.
Export via APEDA: India exports processed cashew kernels to the United States, Europe, the Middle East, and Southeast Asia. Export-oriented processors must be registered with APEDA (Agricultural and Processed Food Products Export Development Authority), have EIC (Export Inspection Council) quality certification, and comply with phytosanitary standards. Premium grades (W180, W240) are generally export-oriented.
Institutional and government procurement: Canteen Stores Department (CSD) and government supply chains use tender-based pricing.
PMFME Scheme — For MSME Cashew Processors
PM Formalisation of Micro Food Enterprises (PMFME) provides:
- Credit-linked capital subsidy of 35% (up to Rs.10 lakh) for individual micro food enterprises
- Support for branding, packaging, and certification
- Seed capital for SHG members in food processing
A MSME cashew processing plant that transitions from informal to formal (FSSAI-registered, bankable) is eligible for PMFME. When combined with an MSME term loan or Mudra for bigger units, the PMFME subsidy reduces effective capital costs.
Project Cost for Cashew Processing Unit
Scale (RCN/season) | Capital Cost (Rs.) |
Small (100-200 MT RCN) | Rs.15-35 lakh |
Medium (200-500 MT RCN) | Rs.35-80 lakh |
Large (500+ MT RCN) | Rs.80 lakh-2 crore |
Key equipment includes a cashew steaming drum, shelling machines (mechanical and hand cutting stations), drying ovens, peeling stations, grading conveyor, vacuum packing machine, CO2/nitrogen gas system, CNSL collection tank, and an FSSAI-compliant packing room.
Small units accommodate PMFME + MSME term loans. Medium and bigger businesses are suitable for MSME term loans from NABARD or bank project finance.
Why Choose Sharda Associates
- 45,500+ Project Reports: Agri-Processing and Food Manufacturing Experience. Cashew processing is a food manufacturing MSME with a distinct raw material cost structure (RCN as the principal input), grading-dependent output revenue, and a CNSL byproduct, all of which we appropriately model.
- CNSL By-Product Revenue is correctly included. Many project reports omit CNSL; we incorporate it as a separate revenue stream, which improves the DSCR and overall business case.
- Kernel Grade Mix is correctly modelled. The grade mix (W180 premium vs W320 standard vs broken) impacts the average selling price and overall revenue; we simulate a realistic grade distribution for your processing scale and equipment.
- RCN Input Cost as Primary Variable: RCN prices fluctuate seasonally and with global supply; we accurately model raw material costs at realistic market prices with suitable sensitivity.
- PMFME + MSME Loan Dual Documentation: For smaller enterprises, the PMFME subsidy (35%, up to Rs.10 lakh) is combined with an MSME term loan, both of which are documented simultaneously.
- APEDA Export Channel Mentioned Where Relevant For export-oriented processors, APEDA registration, EIC certification, and export-grade documentation are mentioned in the compliance and market sections.
- Starting at ₹2,999 · 24–48 working hours ·
+91 89899 77769 | All India service
Frequently Asked Questions
A Cashew Processing Project Report is a detailed business plan and financial document prepared for starting or expanding a cashew processing unit. It includes details about raw cashew nut procurement, processing methods, machinery, production capacity, manpower, project cost, working capital, sales assumptions, expenses and profitability projections.
For bank loans, it helps financial institutions evaluate the feasibility and repayment capacity of the proposed cashew processing business.
Sharda Associates prepares customized Cashew Processing Project Reports according to the entrepreneur's business model and investment requirement.
Banks and financial institutions may require a project report while evaluating finance for setting up a cashew processing plant.
The report explains machinery investment, raw material requirement, processing capacity, operating expenses, expected revenue and repayment capability.
Sharda Associates can prepare a bank-oriented Cashew Processing Project Report with complete financial projections.
The investment depends on:
- Processing capacity
- Type of machinery
- Automation level
- Factory infrastructure
- Raw cashew nut inventory
- Packaging facility
- Working capital requirement
A small cashew processing unit requires lower investment compared to a large automated processing plant.
A customized project report helps calculate the actual investment requirement.
Common machinery used in cashew processing includes:
- Cashew steaming equipment
- Cashew shelling machine
- Drying equipment
- Peeling machine
- Grading machine
- Roasting equipment
- Sorting tables
- Packaging machine
- Weighing equipment
The machinery requirement depends on production capacity and level of automation.
The main raw material is Raw Cashew Nut (RCN).
Other requirements include:
- Packaging materials
- Food-grade containers
- Labels
- Processing consumables
- Electricity and fuel requirements
The project report considers raw material availability, consumption and cost according to the planned production capacity.
A cashew processing unit can produce:
- Whole cashew kernels
- Broken cashew grades
- Roasted cashews
- Salted cashews
- Flavoured cashews
- Retail packaged cashew products
- Cashew by-products
The business model can be customized for wholesale, retail or export markets.
Revenue can be generated through:
- Wholesale cashew sales
- Retail packaged products
- Export supply
- Bulk supply to retailers
- Contract processing services
Revenue depends on production capacity, product quality, market demand and selling price.
A detailed project report may include:
- Project cost
- Machinery investment
- Factory setup cost
- Raw material requirement
- Working capital
- Means of finance
- Production capacity
- Sales projections
- Processing expenses
- Employee cost
- Profit & Loss Statement
- Balance Sheet
- Cash Flow Statement
- Break-even analysis
- DSCR calculation
- Loan repayment schedule
Sharda Associates prepares these financial projections based on the actual cashew processing project.
Yes, a cashew processing project report can be prepared for presenting the business proposal to banks and financial institutions.
The report can include machinery details, investment requirement, working capital, revenue model and financial feasibility.
Eligibility for PMEGP, MUDRA or other financing schemes depends on applicant eligibility, project size and applicable guidelines.
Sharda Associates can prepare a customized Cashew Processing Project Report for bank loan and business planning purposes.
The report can include:
- Business profile
- Cashew processing workflow
- Machinery requirement
- Raw material assessment
- Project cost calculation
- Working capital estimation
- Revenue model
- Profitability analysis
- Cash flow projections
- Balance sheet projections
- DSCR and repayment calculations
The report can be customized for cashew processing units, cashew factories, roasted cashew businesses, packaged dry fruit businesses and food processing enterprises.