A novel and practical process to convert the oily sludge from food industry and waste water treatment into a non-oily feed product in dry and free-flowing form for animal applications is provided. The combination of an alkaline agent to encapsulate the oily sludge into a non-oily form and a particulate material to provide solid surface as a carrier is used to convert the oily sludge into a non-oily wet paste or particle form. Then a drying process with a commercial dryer is applied for producing an animal feed product in non-oily, dry and free-flowing form. The animal feed product retains a fat level, which is generally higher than normal animal feed products, but in an easily handled, non-oily, non-sticky, free-flowing and dry form. The process of the invention converts the problematic food waste sludge with oily, sticky and wet properties into the useful nutritional products with the improved properties. The process in the present invention is practical and economical to be used, which could resolve the problem from these oily sludge materials, save and create millions of dollars for food and feed industries and waste water treatment plants.
