Ethiopia has suitable weather condition for the growth of castor beans; which is the main ingredient for formulation of fat liquor. Fat liquor is one of the most important chemical used in leather processing industry. It is currently imported with foreign currency. This research showed the potential of locally available raw material castor seed for production of sulphited fat liquor, which will potentially substitute the imported vegetable oil sulphited fat liquor. 3.7liter purified castor seed oil was obtained from 9.865 kg castor seed. The sulphited fat liquor was synthesized using castor seed oil by using concentrated sulphuric acid (98% H2SO4). The process involves preparation of seed, extraction of oil by using screw press machine and characterization of both the oil and fat liquor in terms of saponification value, acid value, iodine value, pH value and specific gravity. Their experimental values were 180.9225, 3.2, 87.138, 0.95, 6.3 and 182.0445, 2.97, 85.023, 1.06, 6.93 respectively. From the preliminary feasibility study for 1366L/day capacity Sulphonated fat liquor production plant, Birr 26,176,894 TCI is required. The unit product cost was estimated 54birr/L. The project was financially feasible with ROI of 50.6%, TOR of 0.91, 1.5 year payback period and NP of 20,260,305birr.