October 27, 2016
It is estimated that one ton of dry cashews can give 250-300 kilos of cashew nuts and 700-750 kilos of cashew nut shells from which 154 kilos of cashew oil can be produced. Cashew oil is an important material in many industries. It is used to make high-quality adhesive materials, binder for seagoing vessels' paint, and laminated and heat-resistant materials. It can also be used in the electrical and electronic industries. Factories in Dong Nai province alone make up 60 percent of total cashew shell oil in Vietnam. Do Nguyen Kien, director of F.T.E Technology Development, said though cashew nut shells are a by-product, it is the major source of income of the company.
F.T.E, Cat Loi, Hung Loc Companies in Dong Nai province, and Thao Nguyen in Vung Tau City, usually buy cashew nut shells in large quantities for gradual use. The cashew nut shell price is at VND1,450 per kilo. Most companies focus on making cashew oil semi-finished products, or Cardanol oil essence. Though Carnadolhas high value, companies still focus on making cashew nut shell oil because Carnadol has a short expiry date, while the investment rate and the risks are high.
Cashew nut shells, considered ‘rubbish’ by many people, turn out to be a material which may create a market worth hundreds of millions of dollars a year. According to F.T.E, the expected average profit from Carnadol is VND2 million or at times VND4 million. “The supply is too low to satisfy large orders, of 100-200 tons,” Kienexplained. Regarding the investment rate, Kien said the required investment capital is VND2.5 billion for the capacity of 50 tons a month. “The cashew nut shell oil market has great potential. Therefore, we do not focus on Carnadol,” Kien said.
F.T.E also exports cashew sell residue for fuel and sludge to South Korea. Sludge could be used instead of FO. Though it produces less calories, it has lower freezing temperature (at minus 42oC) and can be used in countries with cold winters. Vietnam exports 600,000 tons of cashew nut shell oil each year. Large corporations can export 10,000 tons of oil every month.
F.T.E alone can provide 25,000 tons of oil every year, but the figure could be 48,000 at maximum. Its products mostly go to China, South Korea, Indonesia and Spain. In the past, China was the biggest consumer, but it has been replaced by South Korea.
Kien believes that Vietnam’s cashew nut shell oil can meet standards for the US market.
However, Vietnamese companies continue to focus on doing outsourcing for China, and export products to China because of commitments made with machinery suppliers.