Graph retrieval-augmented generation (GraphRAG) enhances large language models with structured knowledge, yet existing systems construct knowledge graphs in a single extraction pass, producing noisy entities and brittle retrieval. RAGU, an open-source modular GraphRAG engine, addresses this by separating extraction from consolidation: entities and relations pass through two-stage typed extraction, DBSCAN-backed deduplication, LLM summarization, and Leiden community detection. A key insight motivates a compact extractor: the skills an in-pipeline LLM needs — comprehension, extraction, reasoning over context — are language skills that grow only weakly with model size, unlike factual world knowledge. Accordingly, we train Meno-Lite-0.1, a 7 B model optimized for language skills, which outperforms Qwen2.5-32B on knowledge-graph construction (+12.5% relative harmonic mean) and matches it on English GraphRAG tasks. On GraphRAG-Bench (Medical), RAGU retrieves the most complete context at every factoid level (evidence recall up to 0.84 vs. ≤0.76) and overtakes HippoRAG 2 on synthesis tasks; on multi-hop factoid QA, the apparent HippoRAG 2 advantage is shown to be largely an answer-format artifact. RAGU is installable via ‘pip install graph_ragu‘, runs on a single GPU, and is released under Apache 2.0. Code and model: https://github.com/RaguTeam/RAGU.