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Peanut butter

1.         Product Description: Peanut butter is a yellowish brown butter like product made from grounds nuts or peanuts. It is essentially made from cleaned, graded, blanched, roasted and crushed groundnuts containing about 45% oil and 25% proteins. Peanut butter is a highly nutritive food containing proteins, fat, carbohydrates as major constituents. It also contains calcium, phosphorous, iron, vitamin A, B1 and B2, etc. The calorific value of peanut butter is about 600. Peanut butter is used in the preparation of sandwiches, candy, bakery products, insecticidal formulation (to attract insects/pests), etc.


2.         Rationale: The Amhara Region especially the western and northwestern part is suitable for the production of groundnuts or peanuts. However, up to now, no large scale or commercial farming of peanuts has been undertaken. Even now, peanut crop is being produced by small-scale farmers. Like any other product, peanut brings more prices to its producers when it is further processed and converted to products like peanut butter. The peanut produced in the region is transported to Addis Ababa to be sold either in raw form or to be processed. Though the price of a peanut of quintal in the growing areas is relatively high compared to the prices of other crops, it is much lower than its price in Addis Ababa. If a plant is established in the Region for processing peanut, it will bring more financial resources to the Region. In other words through further processing there will be more value added for the product before it leaves the Region i.e. the product will bring more income.


3.         Market Potential: Despite its high nutrition value and the possibility of local production, the consumption of peanut butter is so far limited to urban residents only some factors restrict the consumption of peanut butter in rural areas. First, peanut butter is usually consumed with bread prepared in bakeries. People are not used to use the butter with injera, or any other type of staple diet used in the countryside. Second, in spite of the availability of peanuts in many rural areas, the crop is not usually converted to butter for local use. Third, rural people are not very much aware about the nutrition value of the crop. Finally, the crop is a cash crop which is readily sold in local markets instead of being consumed by the producers.

Even in urban areas, the consumption of peasant butter is limited to high income groups due to the high prices of the product. Currently a jar of local peanut butter which is about 400gms is sold for Birr 9.00 which discourages many potential consumers. In addition, the distribution of the product is limited to few so-called supper markets which cater to the need of foreigners and few nationals of high income. Had it not been for its high price, peanut butter is a popular food item. Children like it very much; so much so three children could easily eat one whole jar of peanut butter with bread during two or three meals.


Much of the peanut butter supplied to the market is imported. It is only in the last five years that peanut butter has started to be produced by cottage industries; and the share of the locally produced peanut butter in the market is very small. But if the product is produced in a modern factory which will improve its quality and possibly reduce its unit price, the demand potential is indeed high. Even with the current consumption level, the demand for peanut butter is projected to be 847 tons in 2006 and this demand is expected to grow by 5 percent every year. Current production of the butter is probably not more than 100 tons. This indicates that there is sufficient market for the product in the country; and the market will expand as more people start consuming the product. Since the Amhara Region has the natural potential to produce peanuts, it is natural that the region should process the peanuts to butter. There is also a good potential to export the product.


4.         Source of Raw material: Western and northwestern part of the Region.

5.         Process and Technology: Production of peanut butter involves the following operations:

·         The peanut seeds are shelled in a decorticating machine

·         The shelled peanuts are heated to an internal temperature of about 1450C to obtain the proper roasted flavor.

·         The influence of roasting time on sensory attributes and chemical measurements of flavor or components are examined.

·         Roasted peanuts undergo blanching to remove the skin of the seed

·         A coarse or medium grind is made, the ingredients are added and blended,

·         The oil level is controlled at 3% by keeping the mix at low temperature

·         Final grind is prepared at an appropriate temperature to produce the desired texture of smooth creamy paste,

·         Air is removed by vacuum and the mixture is cooled, and

·         The peanut butter is packed by using a vacuum fill type packing unit.


The premises under which peanut butter is manufactured/processed, packed and stored and distributed and all the equipment and tools used during processing should be maintained under strict hygienic conditions. Workers should have the highest standard of personal cleanliness.


Machinery and equipment needed include decorticating machine, roaster with thermostat, blanching equipment, coarse grinding machine, paste grinding and mixing machine, packing unit (vacuum fill type) and miscellaneous testing equipment, tanks, tools, etc.


6.         Estimated Investment: For a small plant which will produce about 60 tons of peanut butter per year, the estimated investment will be:

·         Building 300 m2 at Br. 3000/m2 ………..= Birr      900,000

·         Machinery ………………………………= Birr   1,800,000

·         Working capital ………………………...= Birr     100,000

   Total ………….…=Birr   2,800,000


7.         Benefits: Saves foreign exchange, stimulates local production of peanuts, increases the income of producers, introduces new technology and skills,


8.         Location: Capital of the zone which has the highest potential for producing the peanut crop.