Virgin Coconut Oil Commercial Production

Virgin Coconut OH (VCO) is oil obtained from the fresh, mature kernel of the coconut either by natural or mechanical means, with or without the use of heat, without undergoing chemical refining, bleaching or deodorizing and which does not lead to the alteration of the nature of the oil. It is an oil which is suitable for consumption without the need for further processing

Advantages and Benefits of Virgin Coconut Oil

  • Cholesterol, chemical, additive free
  • Less prone to rancidity
  • Loaded with anti-oxidants
  • Improves digestion and nutrient absorption
  • Can be used as a moisturizing cream, lip balm
  • Ideal for aromatherapy massage oil
  • Actively builds and strengthens body’s immune system due to high lauric acid content

Estimated Investment Cost (in Php based on 2009 prices)

a. Utensils and Equipments

  • Cheese cloth (katsa) – 50.00
  • Measuring cup/spoon for liquid – 40.00
  • Ladle – 35.00
  • Funnel – 30.00
  • Makeshift Grater (kudkuran) – 1,000.00
  • 2 pcs Cooking Pans (Makeshift Double Boiler) – 700.00
  • Mechanical Coconut Grater (optional) – 16,000.00
  • Coconut Milk Press (optional) – 17,000.00
  • Subtotal – P34,855.00

b. Cost of Raw Material and Packaging Material:

  • Mature coconuts (big) –  10.00
  • 250 ml plastic bottle with cap – 10.00/pc
  • Bottle label – 1.00/pc
  • Cap seals (1000 pcs) – 140.00
  • Cap seal blower or Heat Gun (optional) – 2,000.00
  • Sutbotal – P2,161.00

Estimated total investment – P37,016.00

Procedure

Fermentation Method for 1 liter of VCO

  1. Select at least 15 mature and good dehusked coconuts (12-13 months). Make sure that the dehusked shell is intact and has no breakage and that there is water inside the coconut. To test, shake it.
  2. Split the shell into halves, remove the water and grate the coconut meat either manually or with a mechanical grater (kudkuran). Or you can have this done in your neighborhood market when you buy your coconuts.
  3. Collect the grated meats together then extract the coconut milk by hand or by using a coconut milk press if available.
  4. Strain the first coconut milk through a cheese cloth (katsa) to separate the sediments then set aside.
  5. Do a second extraction by mixing the coconut residue or “sapal” obtained after the first extraction with hot water at a ratio of 2 parts “sapal” to 1 part water.
  6. Mix well and extract coconut milk from the mixture again by hand or by coconut milk press.
  7. Strain again with a cheese cloth (katsa).
  8. Mix the coconut milk from the first extraction with that obtained from the second extraction.
  9. Let the mixture stand for 36-48 hours to separate the cream from the skim milk. Part of the oil will also start to separate after 6 hours of setting.
  10. Separate the cream (top layer and oily portion) from the skim milk (bottom layer and watery portion).
  11. Remove the oil by decanting.
  12. Filter the oil with the use of filter paper to remove the sediments/impurities.
  13. Evaporate moisture at low heat using a makeshift double boiler and simmer for 15 minutes to ensure that all the residual moisture adhering in the surface of the oil will be removed.
  14. Let cool.
  15. Piece the oil in a very dry container for storage.
  16. Store in a cool dry place. Avoid direct sunlight for the oil to stay.
  17. Shelf life is good for 90 days.

Decantation is a process for the separation of mixtures, carefully pouring a solution from a container in order to leave the precipitate (sediments) in the bottom of the original container.

Rancidity refers to changes in odor and flavor associated with deterioration of lipids.

Market Prospects of Virgin Coconut Oil

  • Increase in consumer demand for functional foods and organic products
  • Acceptance of herbal/natural medicine as alternative products to complement, if not replace, synthetic drugs
  • Increasing demand for safe, efficacious and quality natural therapeutic products
  • Growing awareness on the value of food and nutrition in preventing diseases

Estimated Costing and Pricing

  • A. Direct cost (raw and packaging materials, labor) – 213.66
  • B. Indirect cost (transportation, water, electricity, contingency) – 36.95
  • C. Production cost (A+B) – 250.61
  • D. Product pricing 1L bottle (C+10% markup) – 276.00
  • Estimated income for 1 L bottle (D-C) – P25.00

Product pricing for 250ml bottles

  • 1 liter = 4  bottles of 250ml VCO x P100/bottle – 400.00
  • Less: production cost – 251.00
  • Estimated net income – P149.00

Assumptions

  • 15 fully mature dehusked coconuts = 1 liter VCO
  • Selling price per 250 ml bottle is Php 100.00
  • Fermentation is 36-48 hours
  • Labor cost is computed based on 20 liter/day production of VCO

Registration Requirements

  • Business name registration (www.bnrs.dti.gov.ph)
  • Mayor’s/Business Permit (check your local municipality/city)
  • BIR TIN (www.bir.gov.ph)
  • BFAD Certificate (www.bfad.gov.ph)

Financing Facility

  • People’s Credit and Finance Corp (www.pcfc.gov.ph)
  • Small Business Corp. ([02] 751-1888)

Technical Assistance (Training and Seminar)

  • DA-PCA (www.pca.da.gov.ph)

source: DTI-PTTC

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