A co-rotating twin screw processor for preparing dry granules including an input zone having one or more powder feeders for feeding an input material into the processor, a steam feeder configured to introduce steam as a granulation activating agent in to the processor, a granulation zone for granulating the input material in the presence of steam to form granules, a controller configured to control operation and feed rate of at least one of the powder feeder or the steam feeder such that 2.5 to 5 percent w/w of the steam with respect to the input material is available for granulation, and a discharge zone haring a non-extruding opening for collecting dry granules.