India is the world’s largest producer, consumer, and exporter of cashew nuts, making cashew processing an attractive and profitable business. From raw cashew nuts (RCN) to shelled kernels, roasted snacks, flavored nuts, and cashew-based products, the industry offers vast potential for value addition. Moreover, with rising global demand for healthy snacks and plant-based ingredients, starting a cashew processing unit is a rewarding opportunity for new entrepreneurs and food manufacturers alike.

Cashew Processing & Value-Added Products | Start a Plant

Cashew processing involves transforming raw cashew nuts into consumable, marketable products through a series of mechanical and manual operations. A cashew plant can process nuts into various forms like white kernels, roasted and salted cashews, flavored variants, and even cashew butter or cashew milk. Moreover, by-products like cashew nut shells are valuable for oil extraction used in the paint and resin industries, adding extra income streams to the business.

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Raw Material and Sourcing

The first step in cashew processing is sourcing high-quality Raw Cashew Nuts (RCN). India cultivates cashew in coastal states such as:

• Kerala

• Maharashtra

• Tamil Nadu

• Andhra Pradesh

• Goa

• Odisha

You can also import RCN from African countries like Ivory Coast, Tanzania, and Ghana, especially during off-season months. Moreover, ensuring uniform size and moisture-free nuts results in higher kernel yield and quality.

Step-by-Step Cashew Processing Workflow

The cashew processing workflow is a combination of mechanical automation and skilled labor:

1. Steaming/Roasting – RCNs are heat-treated to loosen shells

2. Shell Cutting – Nuts are cut manually or using semi-automatic machines

3. Drying (Borma Dryer) – Extracted kernels are dried to reduce moisture

4. Peeling – Thin brown skin is removed, exposing white kernels

5. Grading – Kernels are sorted by size, color, and quality (e.g., W180, W240, W320 grades)

6. Packing – Kernels are vacuum sealed or nitrogen-flushed for long shelf life

7. Flavoring (Optional) – Kernels are roasted and flavored (e.g., salted, masala, honey-coated)

Moreover, strict hygiene, temperature control, and food safety practices must be followed to meet FSSAI and export standards.

Machinery and Equipment Required

To set up a cashew processing plant, essential machines include:

• Boiler or steaming unit

• Shell cutter (manual or automatic)

• Borma dryer or tray dryer

• Peeling machine

• Grading machine

• Flavor coating and roasting units

• Weighing and packing machines

Moreover, semi-automated units are ideal for small businesses, while large units with conveyor systems and continuous roasters suit industrial-scale operations.

Investment and Profitability

Setting up a cashew processing business involves moderate investment with attractive margins:

Moreover, selling flavored or branded cashew snacks in the retail market offers significantly higher profit margins compared to bulk sales.

Value-Added Cashew Products

Expanding into value-added products increases shelf appeal and opens new markets:

• Salted and roasted cashews – Popular in snack food chains

• Masala/spiced cashews – Flavored using local spices for regional tastes

• Honey or chocolate-coated nuts – Premium segments for gifting and exports

• Cashew butter/paste – Vegan alternative to peanut butter

• Cashew milk – Plant-based dairy substitute gaining popularity

• Cashew shell liquid (CNSL) – Used in industrial resins, coatings, and lubricants

Moreover, launching your own brand or private labeling for supermarkets can multiply revenues.

Domestic Demand and Target Markets

The demand for cashew-based products is high in:

• Urban retail outlets and supermarkets

• Export markets (USA, UAE, Netherlands, Japan)

• Snack manufacturers

• Vegan and plant-based food brands

• Hospitality and airline catering sectors

Moreover, rising health awareness and premium gifting culture boost domestic consumption of quality cashew products.

Export Potential

India exports cashew kernels and value-added products to:

• United States

• United Arab Emirates

• Netherlands

• Japan

• Saudi Arabia

Setting up a processing plant near a cashew-growing or port area gives easy access to both raw material and international trade logistics. Moreover, vacuum packaging and compliance with global standards (like BRC, ISO, and FDA) enhance export prospects.

Licensing and Compliance

To run a legal cashew processing unit, you need:

• FSSAI registration/license

• Udyam/MSME registration

• GST registration

• Factory license

• Pollution Control Board clearance (if steam generation involved)

• Import Export Code (IEC) for exports

Moreover, certification such as HACCP or ISO 22000 ensures customer confidence and market credibility.

Government Support and Schemes

You can access financial and technical support from:

• PMFME Scheme (Pradhan Mantri Formalisation of Micro Food Processing Enterprises)

• NABARD loans for agri-based processing units

• NSIC and SIDBI financing for MSMEs

• Export subsidies under RoDTEP scheme

• Skill training under SFURTI and KVIC (Khadi and Village Industries Commission)

Moreover, states like Goa, Maharashtra, and Tamil Nadu offer special incentives for setting up cashew processing clusters and food parks.

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Conclusion

Starting a cashew processing business is not only profitable but also sustainable, with growing demand across domestic and international markets. From raw nut processing to value-added gourmet products, the opportunities are diverse and scalable. Moreover, with the right machinery, compliance setup, and quality control, entrepreneurs can establish a long-term business with recurring revenue. Whether you target bulk export or niche premium segments, cashew processing offers a crunchy path to success.

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