NEEM BASED PESTICIDE

CONTENTS
SECTION

PRODUCT CHARACTERISTICS

SECTION

II

PRODUCT APPLICATIONS

SECTION

III

INDIAN MANUFACTURERS

SECTION

IV

IMPORT/EXPORT LEVEL

SECTION

PRICE DETAILS

SECTION

VI

INDIAN DEMAND

SECTION

VII

BROAD OUTLINE OF MANUFACTURING PROCESS

SECTION

VIII

RAW MATERIAL REQUIREMENTS, UTILITY

AND AVAILABILITY

SECTION

IX

GLOBAL SCENARIO

SECTION

DISCUSSIONS ON ECONOMIC CAPACITY,

PROJECT COST AND PROFITABILITY PROJECTIONS

SECTION

XI

SWOT ANALYSIS

SECTION

XII

FACTORS INFLUENCING THE POSITION FOR

NEW INDUSTRY AND RECOMMENDATIONS

SECTION - I
PRODUCT CHARACTERISTICS
1.1.

General details

Neem pesticides are systemic and do not induce pest resurgence unlike other synthetic
insecticides.
While, every part of Neem tree has pesticidal applications, the important Neem based
product, that can be used for pesticide applications are the following
Neem oil
Azadirachtin (Active ingredient)
1.2.

Neem oil :

General details
Appearance
Colour
Odour
Refractive index at 40deg C
Specific gravity at 30deg C :
Iodine value
Saponification value
Unsaponification matter

Non drying,bitter liquid.

Greenish brown
Garlic,repulsive
1.4617 to 1.4627
0.9087 to 0.9189
68 to 75.8
193 to 204
0.8 to 2.4%

Composition
In composition, neem oil is much like other vegetable oils, composed primarily of
triglycerides of oleic, stearic, linoleic, and palmitic acids.
The neem seeds are reported to have 45% of oil content.
The neem seed kernel is rich in fatty acids, often up to 50 percent of the kernel's weight.
Neem seed oil is bitter with garlic/sulphur smell and contains vitamin E and other essential
amino acids.

The composition percentages vary from sample to sample depending on place and time of
collection of the seeds.
Fatty acids
Myristic acid
Palmitic acid

Percentage
0.2 to 2.6
1.6 to 16.2

Stearic acid

14.4 to 24.1

Oleic acid

49.1 to 61.9

Linoleic acid

2.3 to 15.8

Arachidic acid

0.8 to 3.4

Other lower fatty acid

23

1.3.

Azadirachtin (Active ingredient)

Molecular formula
Classification
Molecular weight
Melting point
Appearance
Moisture

C35H44O16
Triterpeniod
720
155 to 185 deg.C
Microcrystalline pale yellow coloured crystals
50% moisture in fresh
10 to 15% moisture in semi dried fruit
9% in well dried fruit

SECTION - II
PRODUCT APPLICATIONS
2.1.

Neem oil

General details
Oil extracted from the seeds goes into soaps, waxes, and lubricants, as well as into fuels
for lighting and heating.
The solid residue left after the oil is removed from the kernel is employed as fertilizer and
soil conditioner.
Application sector

*
*
*
*

Pesticide
For soap making
Refined neem oil for herbal medicine
Refined neem oil for massage oil

Neem oil in the soap industry:

Generally, the crude oil is used to produce coarse laundry soaps. The non-edible oil gives
soap of unattractive brown colour, which retains its characteristic odour. This could be
rectified by a second boiling of the oil and then salting out of the soaps.
However, more expensive soaps are made by saponifying the crude oil and distilling the
resulting fatty acids before adding the lye. The resulting almost colourless and odourless
product is suitable for top-quality toilet and laundry soaps

Pesticide sector
Neem oil, extracted from whole seeds (with the hard shell in tact) by simple mechanical
crushing using country `ghani' is suitable as an insecticide.
Solvent extraction and expeller crushing damage the chemical structure of the bio-acitve
principles in neem oil, according to experts.
Neem products are efficient against 105 insect species belonging to ten orders namely
Orthoptera, Dictyoptera, Lepidoptera, Hemiptera, Diptera, Coleoptera, Hymenoptera,
Isoptera, Thysanoptera and Siphonaptera.
Refined neem oil for Herbal medicine/Massage oil
Neem oil is found to be a strong spermicide and it is without side effects.
The antibacterial activity of neem oil has been tested and is comparable with activities
that of Malkalguni oil, Darudi oil and Karantee oil.
Neem oil has proved as cheaper substitute for pre-operative antiseptic solutions.
Neem oil displays a stimulative, antiseptic and alternative effect when used for massage of
the body.
It is an active remedy against boils, ulcers resulting from chronic syphills.. It is remarkably
effective in infections of ring worms. It is used in skin disease such as scrofula, as a
liniment in the case of rheumatism, in arthritis, diabetis and also to lower blood pressure.
Cosmetics
Purified neem oil is used in nail polish and other cosmetics.
Lubricants
Neem oil is nondrying and it resists degradation better than most vegetable oils.
In rural India, it is commonly used to grease cart wheels. It could find many similar
lubrication applications in other locations, especially in village settings in the warmer parts
of the world where neem can be grown.

Birth control formulations

The Defence Institute of Physiology and Allied Sciences (DIPAS) has done research
studies on the birth control properties of neem oil isolates.
These studies conducted on rats, rabbits, monkeys as well as human volunteers reveal that
neem oil can be ideal birth control.
2.2.

Azadirachtin

Azadirachtin technical is used for preparing ready to use formulations for agricultural,
textile, domestic, veterinary pest management.

SECTION - III
INDIAN MANUFACTURERS
Neem oil is produced by a number of small and unorganised units and the important
manufacturers of Neem oil include the following.
*

Aazadirachtin Pvt. Limited

Block 94 Sanjay Place,
Agra - 282 002
Product : Cold pressed Neem oil, neem cake, neem bio insecticide, azadirachtin, ureacoating etc.
*

A.P. Products
26, Madhu Estate,
P.B.Marg, Worli, Mumbai - 400 013
Product : Neem tree products like Neem oil, neem extracts

Bangur Agro Tex Pvt. Ltd.

205, Saraswati, S. V. P. Road,
Borivli (W), Mumbai - 400 003
Product : Herbs, Neem Products like Neem Oil, Neem Cake, Neem Extract

Cheminova Agro Tech

Gate No. 352, Mohida Turfe Shahada,
Nandurbar - 425 409
Product : Neem oil, neem oil cake, neem kernel oil, neem kernel cake etc.

Disel & Auto Spares (India)

301 Shanti House,
Off C G Road, Ahmedabad - 380 009
Product : Neem oil

Dr. Jains Forest Herbals Pvt. Ltd.

A-10 Raj Industrial Complex,
Unit No.A-10, 2nd Floor, Military Road Marol,
Andheri East, Mumbai - 400 059
Product : Neem oil

D.M.R. International/Deluxe International

No.10, Kuya Street,
Sriperumbudur - 602 105
Phone: +(91)-(4111)-32709/32067/32518/32244
Fax: +(91)-(44)-5341022/5342211
Azadirachta Indica - Neem - cake
Azadirachta Indica - Neem - Leaves
Azadirachta Indica - Neem - Oil
Azadirachta Indica - Neem - Powder
7

Gayathri Oil Mill

41/545, Kotha Pet,
Kurnool - 518 001
Product : Neem oil, neem cake

J.D. Corporation
203 Yogeshwar, 135/139 Kazi Sayed Street,
Masjid Bunder, Mumbai - 400 003
Product : Neem oil,

Lalitha Neem Pvt. Ltd.

PSK Road, Rajapalayam - 626 117
Products: Neem oil and Neem cakes

Maruthi Sastha Associates

1020, 80 Feet Road, Ist Block,
Koramangala, Bangalore - 560 034
Products: Neem oil and Neem cake

Nectar Biotech Limited

66 Karpagam Avenue, R A Puram,
Chennai - 600 028
Products: Neem Based products :Neem oil. Neem extracts neem cakes.

Olympic Exporter
21, Muthamil Nagar, Adiyanuthu (P.O),
Dindigul - 624 003
Products: Neem oil and Neem cake.

Palakshree Packaging Pvt.Ltd

B-304, Ganesh Plaza Nr Navrangpura Bus Stop,
Ahmedabad - 380 009
Products: Neem oil and Herbal Products

Pioneer Enterprise (Mumbai)

101, Raudat Tahera Street,
Mumbai - 400 003
Phone: +(91)-(22)- 23472534
Fax: +(91)-(22)- 23472325
Products: Natural products for Organic Farming like Herbal Extracts, Botanical Herbs,
Natural Colours, Azadirachtin, Allium Sativum, Neem products.
*

Plasma Power Private Limited

New B23, "B" Block
2nd Avenue, Anna Nagar
Chennai - 600 102
Products: High purity Neem oil, neem cake

P.S.K.Shanmugarajan & Sons (P) Ltd.

21/63-C, West Colony,
Komarapalayam - 638 183
Products: Neem oil, neem herbal extract for termite control,

Quest Marketing Company

G-2, Sector-C, Awho Colony,
Hyderabad - 500 016
Products: Neem Products like Neem oil, Neem cake, Neem Kernels, Neem Leaf Powder.

Sahayata
166, Jodhpur Park,
Kolkata - 700 068,
Products: All types of Neem Products like Neem based herbal toilet soap, Pure Neem Oil.

Shri Ambica Oil Cake Industries

Khatraj Chokdi, Mahemadabad, Kheda - 387 130
Phone: +(91)-(2694)-44661
Fax: +(91)-(2694)-44860
Products: Neem (azadirachta indica), biopesticides of neem

T.Stanes & Company Limited

8/23-24, Race Course Road
Coimbatore-641 018
Phone : 0422-211514, 213515 to 213518
Fax : 091-0422-217432
Product : Neem based pesticide - Nimbicidine (Azadirachtin)

Viprama Industries
A-30 M.I.D.C. Dasarkhed,
Malkapur - 443 101
Products: Neem Oil, Neem Cake, Neemseed Powder Etc.

Vinamra Oils & Herbs

41, Anupam Nagar Extn.,
Gwalior - 474 003,
Products: Neem Oil,

Welcome Trading Corporation

153, Portugese Church Street,
Chennai - 600 001
Products: Neem oil and neem cake

SECTION IV
IMPORT/EXPORT LEVEL
4.1.

Imports

4.2.

Present exports level of Neem oil

Nil
Around 260 tonnes per annum

4.2.1. Countrywise exports of Neem oil

Period:

April 2001 to March 2002

Country

Quantity in kg

Australia
Austria
Baharain IS
Brazil
Canada
Chinese Taipei
China P RP
Colombia
Denmark
Egypt A RP
Fiji IS
France
German F Rep
Ghana
Greece
Israel
Italy
Japan
Korea RP
Malaysia
Mexico
Netherland
Philippines
Sierra Leone
Singapore
South Africa
Spain
Sri Lanka
Switzerland
Thailand

9943
1000
1015
20990
8061
2000
2010
100
2648
812
90
980
2720
300
800
300
3700
15297
4082
18108
8780
2761
1000
100
5690
5928
26040
4075
900
985
10

UAE
UK
USA
Zimbabwe

865
2892
102575
2320

Sample of Export Details of Neem Oil from Chennai port

Period 2002
Name of the exporters

Country

Quantity

Date

Port

Plasma Power Pvt.Ltd.

M/S.Commercial Services
Afsan Exports
Plasma Power Pvt.Ltd.
Plasma Power Pvt.Ltd.
Southern Petrochemical Ind.
Plasma Power Pvt.Ltd.
Plasma Power Pvt.Ltd.
Plasma Power Pvt.Ltd.
Plasma Power Pvt.Ltd.
Plasma Power Pvt.Ltd.
Plasma Power Pvt.Ltd.
Plasma Power Pvt.Ltd.
Plasma Power Pvt.Ltd.
Plasma Power Pvt.Ltd.
E.I.D. Parry
( India ) Ltd.
Plasma Power Pvt.Ltd.,
Plasma Power Pvt.Ltd.
Plasma Power Pvt.Ltd.
Plasma Power.
Plasma Power
Plasma Power
E.I.D. Parry
(India )
Plasma Power
Plasma Power
E.I.D. Parry (
Plasma Power
K. Sivaram
Southern

Vancouver
Singapore
Singapore
Los Angeles
Pusan
Stockholm
Vancouver
Kawaihae
Chicago
Port Tampa
Livorno
Kahoma City
Chicago
Chicago
Jakarta
Marseille

600 Ltr
190 Kgs
90 Kgs
1000 Ltr
1000 Kgs
6000 Ltr
1000 Ltr
600 Ltr
1040.88 Ltr
832.70 Ltr
1200.00 Ltr
1000 Ltr
1100 Ltr
2000 Ltr
400 Ltr
950 Kgs

Jan 2002
Jan 2002
Jan 2002
Feb 2002
Feb 2002
Feb 2002
Feb 2002
Mar 2002
Mar 2002
Mar 2002
Mar 2002
Mar 2002
Mar 2002
Mar 2002
Mar 2002
Mar 2002

Chennai
Chennai
Chennai
Chennai
Chennai
Chennai
Chennai
Chennai
Chennai
Chennai
Chennai
Chennai
Chennai
Chennai
Chennai
Chennai

Chicago
San Diego
Chicago
Los Angeles
Oklahoma City
Los AngeleS
Avivil Tel

30.00 Ltr
600.00 Ltr
1600.00 Ltr
2000.00 Ltr
1000.00 Ltr
2498.10 Ltr
5.00 Ltr

April 2002
May 2002
May 2002
May 2002
May 2002
May 2002
May 2002

Chennai
Chennai
Chennai
Chennai
Chennai
Chennai
Chennai

London
London
NICE
Mexico City
Seoul
Manila

25 Ltr
25 Ltr
420 Kgs
1600 Ltr
50 Kgs
800 Lts

May 2002
May 2002
May 2002
May 2002
May 2002
May 2002

Chennai
Chennai
Chennai
Chennai
Chennai
Chennai

11

4.2.2. Countrywise exports of Neem extracts

Period April 2001 to March 2002
Country

Qunatity in Kgs

Austria
Japan
Kenya
Malaysia
Mauritious
Netherland
Spain
Sweden
U Arab Emts
UK
USA
Zimbabwe

50
763
5000
90
530
1000
200
6000
300
525
31503
2208
48169

4.2.3. Sample of individual exports of Neem based pesticide

Period 2002
Name of the Exporters
E.I.D.Parry (I) Ltd.,

Quantity in
tonnes
0.400

Value in Rs.

Country

Date

Port

148200

Kobe

21.06.2002 to
10.07.2002

Chennai

12

SECTION - V
PRICE DETAILS

Price of Neem extracts

Price of Neem pesticide formulation
Taxes and duties

Rs.370 per kg
Rs.460 per kg
Extra as applicable

13

SECTION -VI
INDIAN DEMAND
Indian Azadirachtin potential
Under the optimistic assumption of an azadirachtin content of 5g per kg of dried
kernels,there is already in existence reservoir of about 150 tonnes of azadirachtin per
year in India.This quantity can be tapped for commercial exploitation.
Export opportunities
There has been a positive feedback from the United States and Europe for Neem
pesticides. However, the registration process for pesticides is highly complicated in
these markets. It takes five to six years for a new product to be evaluated and registered
for field use, besides costing millions of rupees. This is the primary reason why the
expected export turnover has not materialised.
In the US, Neem pesticides are permitted on certain greenhouse and ornamental crops
and tests are continuing with other crops. The American market is monopolised by a
single company Thermal Trilogy which has joint venture partner in India. A few more
Indian companies are likely to get their products registered soon. By 1999-2000, Neem
pesticides are likely to have a significant market in the US and Europe. Following the US
example, countries in Europe, the Far East and Australia are also expected to approve
registration.
The marketing problems were not anticipated by a number of units in India which started
producing Azadirachtin powder as a technical grade pesticide during the last two years.
Currently, a gram of pure Azadirachtin is valued at $1 in the international market. The
export turnover cannot be significant unless the market outlets are developed to facilitate
greater use of the products in the US. It would, therefore, be wise to concentrate on the
Indian market by making CIB-approved formulations.
Marketing problem
In the case of Neem, there are the problems of aflatoxin and lead contamination. The
Neem seed in India is collected during the rainy season and processed in an unhygenic
manner, which can result in fungal growth and aflatoxin production. Fruit collected on
roads gets contaminated with lead due to auto exhaust. The organic farming
associations in Europe have come out against importing from India those agro products,
where aflatoxin contaminated neem oil is used as pesticide. The future demand for
neem products in organic farming would depend on how effectively these problems are
tackled. Quality maintenance is,therefore, crucial for the steady growth in the usage of
neem pesticides.

14

Use of Neem oil in pesticide sector

Plant products recommended for pests and diseases
Product
Neem seed kernel
Neem oil

Neem cake

Target crop

Insect pest disease

Dose

Coconut
Rice

Rhinocerous beetle
BPH
Sheath rot
Shealth blight

With sand 1:2 ratio

3% FS
15 lt/ha FS
(to be followed after neem
cake soil applications)

Redgram
Green gram
Powdery
Coconut

Pod borers
Mildew

2% FS
3% FS

Termite

5% spray on the base upto

2m Ht.

Cotton
Bengalgram

Mealy bug
Whitefly
Pod borer

3% FS
5% FS
0.01% combined
Endosulfan 0.07%

Gingelly

Shoot webber and Pod 0.01% FS

borer

Rice

Sheath blight

Coconut

Tanjore wilt

15

with

150 kg/ha soil application

5 kg/tree

Advantages
*
Neem Emulsifiable Concentrate (EC) acts as an ovipositional deterrent. Insects do not lay
eggs on treated crop.
*
It is an insect growth regulator. Malformed adults emerge which eventually suffer
mortality without damaging the crop.
*

Neem EC works as an antifeedant and repellent.

Neem EC does not affect the health of human beings, live stock, poultry and fish.

*
It is selective in action against insects. Neem does not kill plant friendly predators and
parasites.
*

It has been observed that crops when sprayed with neem oil EC are pest-free and grow
vigorously.

Presently available neem kernel all over India is 4,18,000 tonnes

Indian demand for Neem oil:

Around 1.5 lakh tonnes per annum

NEEM CAKE
Neem cake is produced as byproduct in the production of Neem oil
Neem has demonstrated considerable potential as a fertilizer..
The residue left after the oil has been removed varies widely in composition. However, the
broad ranges in composition of Neem cake are:
Crude protein
Carbohydrate
crude fiber
Fat
Ash
Acid-insoluble ash

13-35 percent
26-50 percent
8-26 percent
2-13 percent
5-18 percent
1-17 percent

The neem cake has considerable local potential. Although too bitter for animal feed, it
seems to have unique promise as a fertilizer. It contains more Nitrogen, Phosphorus,
Potassium, Calcium, and Magnesium than farmyard manure or sewage sludge.
It is widely used in India to Fertilise cash crops, particularly sugarcane and vegetables.
16

Plowed into the soil, it protects plant roots from nematodes and white ants, probably due
to its content of the residual limonoids.
Neem cake sometimes seems to make soil more fertile than calculations predict. This is
apparently due to an ingredient that blocks soil bacteria from converting nitrogenous
compounds into nitrogen gas. When mixed with Urea, for example, neem cake cuts down
on the amount of Urea converted to nitrogen gas in the soil. So far, this finding, which
might prove to be a major breakthrough, has not been pursued beyond the laboratory. If it
proves real in everyday practice, it might boost the effectiveness of fertilizers everywhere,
restoring to the soil that part of their power now lost by bacterial action.
Size of the industry
The size of the Indian Neem industry is currently only Rs.40 to Rs.50 crore of which exports
accounted for about 50%.
Growth rate in demand

5 to 6% per annum

17

SECTION -VII
BROAD OUTLINE OF MANUFACTURING PROCESS
Drying of the seeds
Drying of the seeds is carried out by guadrant method. In this process, the space (mostly
it is the godown as the season coincides with monsoon) is divided into four guadrants.
The stock is piled in three of them to a height of two feet. Each of the lot is shifted to the
next quadrant every two or three days. The stock gets heated due to auto oxidation. The
heat is used for expediting the drying on one hand and on the other, during agitation, the
extra heat is ventilated to avoid burning up or deterioration of the seed.
Drying can also be carried out in sun. The foreign matter is separated from the seeds by
using sieves of different sizes, before storing the seeds in gunny bags.
Storing of the seeds
The seeds are stored for 1 to 2 months during which they achieve maturation in oil
content. Storing is necessary to get optimum yield of oil.
Decortification and Winnowing
The seed or fruit is decorticated in stone chakki or decorticator.
The husk is separated with winnowing fan.
The decorticator gives 70% shell and 25% kernel, when dried fruits are used. It gives
45% shell and 50% Kernel when depulped seeds are used. The windege loss is 4 to 5%.

18

Neem based products

Neem Kernel Extract
50 gm of Neem kernel is required for use in 1 litre of water. The Neem kernel is
pounded gently. It should be pounded in such a way that no oil comes out. The outer
coat is removed before pounding. This is used as a manure.
The seeds that are used for preparation of Neem kernel extract should be atleast 3
months old and should not be used after 8 to 10 months. Before 3 months or after 8
months, the azadirachtin contents is quite low in the seeds and hence it cannot be
efficiently used for pest control.
The pounced Neem kernel powder is gathered in a muslin pouch and this is soaked
overnight in the water. The pouch is squeezed and the extract is filtered. To the filtrate,
an emulsifier like tween 80, sandovit, soap oil, nirma or soap cake powder is added. One
ml of emulsifier is added to one litre of water. The emulsifier helps the extract to stick
well to the leaf surface.
The kernel extract should be milky white in colour and not brownish.
Neem leaf Extract
For 5 litres of water, 1 kilogram of green leaf is required. Since the quantity of leaves
required for preparation of this extract is quite high(nearly 80 kilograms are required for
hectare), this can be used for nursery and kitchen gardens. The leaves are ground and
the extract is filtered. The extract is beneficial against leaf eating caterpillars, grubs,
locusts and grasshoppers. To the extract, emulsifier is added as mentioned for kernel
extract.
There is no need to boil the extract. Boiling reduces the azadirachtin content. Hence the
cold extract is more effective. Some farmers prefer to soak the leaves for about one
week. However, this creates a foul smell.
Neem Cake Extract
100 gms of Neem cake is required for 1 litre of water. The Neem cake is put in a muslin
pouch and soaked in water. It is soaked overnight before use in the morning. It is then
filtered and emulsifier is added at the rate of1 ml for 1 litre of water. It is now ready for
spraying.
Neem Oil Spray
30 ml Neem oil is added to 1 litre of water and stirred well. Only then will the oil and
water mix well. To this emulsifier is added (1 ml/1 litre). It is very essential to add the
emulsifier and mix properly. It should be used immediately. Otherwise oil droplets start
floating. A knapsack sprayer is better for Neem oil spraying in preference to a hand
sprayer.
19

Neem as Fertiliser
Neem has shown great promise as a potential fertilizer. Neem cakes and Neem leaves
can be used for this purpose. They widely used in India to fertilise cash crops. When it
is ploughed into the soil, it also protects plant roots from nematodes and white ants. The
leaves are also used as fertiliser.
AZADIRACHIN
Yield of Azadirachtin
The yield of azadirachtin per kilo of Neem seeds collected from various sources has been
estimated as follows:
Source
Commercial Indian
Kenya
Nigeria
Ghana

Yield of azadirachtin (g/kg)

0.75,0.2
1.00
2.00
3.5

Extraction of Neem oil

The neem oil which is extrated from the neem fruit is a very valuable medicine and
insecticide.
The neem oil extraction process includes collection of the fruits, drying, storage,
decortification, winnowing and finally crushing in expellers.
Collection : The neem fruits are swept together or handpicked. They are depulped by
rubbing with soil or ash and then trampling on them.
The fruits are sold either as fresh or dried ones or depulped seed or even as kernels.
The moisture content in commercial neem fruit is 6 to 9.6% and after drying the moisture
content in 5%.
Extraction process
Extraction is carried out in Ghani expeller. 30-40% oil is obtained when Kernels are
crushed. Ghani gives about 5% less oil. The fruits give 4-6% and depulped seeds give
14-15% oil in expellers. 7-9% residual oil in cake is recovered by deoiling in solvent
extraction plant.
Maximum oil yield is obtained after 2 to 5 months fruit collection.
The refining process for oil is patented. The refining can be carried out with silica gel.

20

Oil yield
Crushing in
Ghani
Expeller

Whole fruit
406%

Depulped seed Kernel

25-30%
12-16%
30-40%

Neem extract as pesticide

The most important active ingredient is Azadirachtin, extracted from the neem seed
kernels. It basically acts as an antifeedent and phogorepellant.
The amount of Azadirachtin neem seed kernels is influenced by a number of factors such
as humidity, climatic exposure to sunlight, seed drying, pH and method of extraction.
Although, Azadirachtin is one of the many constituents of the seed kernel, it is the
compound found in the highest concentration and may therefore, serve as a sub
representative of the biological activity.
The concentration varies from source to source and the percentage ranges from 1.5% to
7%. On average, the Indian seed kernel contain about 3.5% of Azadirachtin.
Source of technology
*

SPIC Science Foundation, Chennai

Major plant and machinery details

Name of the equipment

Name of the suppliers

Dryer

The Anup Engineering Ltd.,

Behind 66 KV Electric Sub Station
Odhav Road, Ahmedabad-382 415
ATRE Thermal Products Pvt. Ltd.,
Pushpa Heights, 1st Floor,
Bibwewadi Corner, Pune-411 037

Extractor

Wet grinder

Bangalore Pollution Control Systems Pvt. Ltd.,

2, IInd Floor, 5th Phase, Ist Stage
Bangalore-560 044
The EIMCO-K.C.P. Ltd.,
183, Anna Salai,
Chennai-600 006
K.B. Engineering
B/58, Kiran Estate, M.G.Road,
Goregaon (W), Mumbai-400 062

21

Netzsch India Pvt. Ltd.

P.O. Box No.7314,Plot No.1961-B,
Asidad Colony,
Chennai-600 101
Pulveriser

ACE Pack Machines

23, V.N. Industrial Estate
Bharathi Colony,Near Athiparasakthi Temple
Peelamedu, Coimbatore-641 004
Frigmaires Engineers
PO Box 16353, 8, Janata Industrial Estate
Senapati Bapat Marg
Opp Phoenix Mill, Lower Parel (W)
Mumbai-400 013

Boiler

Cethar Vessels Ltd.,

No.4, Dindigul High Road,
Trichy
Firetech Boilers Pvt. Ltd.
No.211, 2nd Cross,
38th Main, B.T.M. Layout
2nd Stage, Bangalore-68

22

SECTION VIII
RAW MATERIAL REQUIREMENTS, UTILITY AND AVAILABILITY
Raw material requirement
Basis: One tonne
Deoiled neem cake
Spices, vegetables and other chemicals

2.61 tonne

Utilities:Fuel
Power

480 litres
100HP

Raw material availability:

Neem seeds constitute the basic raw material for Neem pesticides. Some 25 years
back,the Khadi and Village Industries Commission (KVIC) estimated seed production at
five lakh tonnes.However,recent estimates indicate the quantity may be many times
more.Nearly 100 oi mills and 40 bio pesticide units consume more than five lakh tonnes
of seed annually.
Fruit collection and marketing has become an organised business in Tamil Nadu,Andhra
Pradesh,Maharashtra and Uttar Pradesh.Adequate quantity of seed is available for the
next four to five years,but in the long run,a shortage of Neem seeds is likely.This gap has
to be filled by new Neem plantations.
Production level of Neem seeds :

1,85,000 tonnes per annum

The domestic demand is likely to gallop as increasing applications are found for neem
seeds, ranging from pesticidal to fungicidal, as a contraceptive and anti-diabetic
preparations, for skin care, in soaps and shampoos, and for toothpaste and mouthwashes. The present surplus in supply over demand (both domestic and export) of neem
seeds couls turn into a deficit in a few years. The solution is commercialisation of neem
plantations.

23

Neem cultivation can be viable, if intercropped with the jaffra plant which produces the
annato-coloure (orange) natural dye. On one acre, 80 neem trees intercropped with 90
jaffra plants is not expected to yield returns on an operational cost of about Rs.6,000 in
the first year and Rs.2,000 in the second. The jaffras are expected to generate a return
of about Rs.5,000 in the second year.
Alternately, neem can be intercropped with indigo. Some corporates have already started
getting into the commercialisation of neem.

24

SECTION IX
GLOBAL SCENARIO

Global suppliers
*

International Sourcing Inc.

779 Susquehanna Ave.
Franklin Lakes, NJ 07417, USA
Contact: Larry Smith
Vice President
Tel:(201)560-0111
Fax: (201)560-1156
E-mail : isi@insourcenj.com
Activity : Trading house

Pokonobe Industries,
PO Box 1756
Santa Monica, CA90406, USA
Contact: Robert Grebler
General Manager
Tel:(310)392-1259
Fax:(310)392-3659
E-mail : sales@pokonobe.com
Activity : Trading house

25

SECTION X
ECONOMIC CAPACITY AND PROJECT COST
Economic capacity

15 tonnes per annum of Natural extracts

100 tonnes per annum of Neem formulation

Project cost

Rs.171 lakhs

Assessment of project cost

1.

Land

S.No.

Description

1.1
1.2

Cost of land of one acre at Rs.5.5 lakh per acre

Cost of levelling, laying internal roads/fencing and
compound wall
Subtotal

2.

6.05

Building

S.No.

Description

2.1
2.2

Factory building of area 320 sq.m. at Rs.3200/sq.m.

Non-factory building of area 70 sq.m.at Rs.4500/sq.m.
Subtotal

3.

Cost
Rs.in lakhs
10.24
3.15
13.39

Cost of Plant & Machinery

S.No.

Description

3.1
3.2
3.3
3.4

Cost of basic plant and machinery

Instrumentation and control
Pipelines and valves
Structurals for erection
Subtotal
Octroi, excise duty, sales tax, etc.at 12%
Packaging and insurance charges (2%)
Transportation charges (2%)
Machinery stores and spares (2%)
Foundation charges (2%)
Installation charges (2%)
Total cost of plant and Machinery

3.5
3.6
3.7
3.8
3.9
3.10

Cost
Rs.in lakhs
5.5
0.55

26

Cost
Rs.in lakhs
45
3.38
4.5
2.25
55.13
6.62
1.1
1.1
1.1
1.1
1.1
67.25

4.

Technical know-how fees

5.

Miscellaneous fixed assets

Rs.2.00 lakhs

S.No.

Description

5.1.
5.2.
5.3.
5.4.
5.5.
5.6.
5.7.

Electrification
Steam boiler and auxillaries
Water storage tank, borewell etc.
Fuel storage tank
Laboratory equipment
Office machinery & equipment
Material handling equipment, packaging machinery,
weigh balance, etc.
Diesel generator
Effluent treatment
Total

5.8.
5.9.
6.

Cost
Rs.in lakhs
4.5
4.5
0.8
1.2
0.8
1.6
1.3
4.4
1.3
20.4

Preliminary & Pre-operative expenses:

S.No.

Description

6.1.
6.2.
6.2.1
6.2.2
6.2.3
6.2.4
6.2.5
6.2.6
6.2.7

Preliminary expenses
Pre-operative expenses:Establishment
Rent rates and taxes
Travelling expenses
Interest and commitment charges on borrowings
Insurance during construction period
Other preoperative expenses and deposits
Interest on deferred payment
Total

Cost
Rs.in lakhs
1.3
1.3
1.6
0.8
8
1.7
14.7

7.

Provision for contingency

Rs.7.83 lakhs

8.

Working capital margin

Rs.39.32 lakhs

9.

Total project cost

Rs.171 lakhs

10.

Means of Finance

Promoter's contribution
Term loan from financing institutions
Total project cost

Rs.68 lakhs
Rs.103 lakhs
Rs.171 lakhs

27

11.

Financial statements

Cost of production
A

Variable cost

Rs. in lakhs

Raw material and utilities

Spares and maintenance
Selling expenses
Total variable cost (A)

340.98
4.04
25.78
370.79

Fixed cost

Salaries and wages

Interest on term loan and working capital loan
Depreciation
Administrative expenses
Total fixed cost (B)

9
39.7
9.1
15.47
73.26

C.

Total cost of production (A+B)

444.05

D.

Selling price per kg. (in Rupees)

Neem extract
Neem formulation

370
460

E.

Annual sales turnover

515

F.

Net profit before tax (E-C)

71.45

G.

Breakeven point in %

51%

28

SECTION XI
SWOT ANALYSIS
Strength

Large availability of Neem plantation

Weakness

Lack of consolidation of the industry

Opportunity

Eco friendly product and exports

Threat

Poor product quality due to mushroom

growth

29

SECTION XII
FACTORS INFLUENCING THE POSITION FOR A NEW INDUSTRY
AND RECOMMENDATION

Neem is one of the widely discussed subjects in India today. The advocates of use of
natural pesticides, the green campaigners and those who believe in appropriate resources
based development are propagating at every available forum about the tremendous
relevance of Neem for India. The fact the Neem trees are grown in large quantities in India
have made many people in India think that the Indian neem trees represent great
opportunity for the country in several ways.
Neem pesticides represents an excellent investment opportunity, in view of the ecofriendly nature of the product, its use in highly relevant and growth oriented sector such as
pesticides, export prospects and reasonable return.

30