How to Make Money from Neem Oil Extraction

How to make money from neem oil extraction business.
How to make money from neem oil extraction business.

Introduction to make money from neem oil extraction business

Didn’t you wonder about the medicinal properties and the usage of neem oil? It has high importance in the market because of its usage in several products. Then why don’t you think of starting the neem oil extraction business at a small-scale? This would be ideal for entrepreneurs who are thinking to start a business with less investment and earn good profits. In this blog, you will get the detailed neem oil extraction business plan along with the checklist for your reference. You might first think of how to extract neem oil to start with the business in India. Now, let’s go the details to make great money from the neem oil extraction business in India.

Ideas to make money from neem oil extraction business

Neem is the most significant contributor in Ayurveda because of its numerous medicinal properties. Neem tree is a native plant of India, having incredible benefits of each part of the tree in curing the skin and hair problems. Neem leaves, fruits, flowers, and twigs have great curative properties and hence have immense pharmaceutical value. Neem oil is considered one of the most significant products, as it has various uses in cosmetics as well as the consumer goods industry. You need not worry about the neem oil extraction process, it is as simple as any other businesses. Any individual can start a neem oil extraction small-scale industry with low capital investment.

The market potential for neem oil extraction business to make good money

As the neem oil usage is increasing day by day, the global neem oil market has greater demand in export business also. The market will increases to million dollars by 2025, as per the CAGR of during the forecast period. The neem oil market is also segmented based on different applications, types, and regions. Based on the application, the market for neem oil is divided into the pharmaceutical industry, pesticides/agriculture, personal care products, and cosmetics. Whereas for the product type, it is classified into seed extract oil, leaf extract oil, and bark extract oil. Based on region, it is classified across Asia-Pacific, Europe, North America, and LAMEA.

Neem oil is a potential element in pest repellent due to its insect repellent properties that have favored the market growth since it encourages neem oil manufacturing. However, few countries such as Africa, which hold only a smaller number of neem trees, are compelled to import the neem oil from Asian countries because of its huge demand in manufacturing and usage in many products. This has increased the cost of raw material and in turn the manufacturing cost of the product. Therefore to minimize these problems many countries are importing neem oil from India.

This makes a greater sense to start the neem oil extraction business even at a small scale and earn profits because of its demand in the national as well as the international market.

Uses of neem oil in a different scenario

Neem has curative properties for innumerable health problems. The major ones among them include: prevents the dehydration of skin; cures skin diseases like eczema; also prevents hair problems like dandruff and also controls the hair fall; skin blemishes and evens the uneven complexion.

Neem is also a natural mosquito repellent and prevents from the dreadful mosquito-related diseases like dengue, malaria. Neem has no side effects, unlike synthetic and chemical mosquito repellents. Hence many people grow a neem tree in their garden. But very few of them believe its actual socio-environmental and commercial value.

Because of the following uses the neem oil is considered as a very important product in the market-

Applying neem oil benefits for hair by relieving all the hair fall and dandruff problems; many of the skin specialists refer neem oil for acne treatment; neem oil for skin brightening; doctors recommend neem oil for skin pigmentation; it is proven that neem oil poisoning in killing mosquitoes and other harmful insects, pests, etc.; the regular usage of neem oil lightens skin, many farmers are well-aware of neem oil uses for plants; many of them use neem oil for face to maintain their even skin tone.

Business plan for extraction of neem oil to make good money

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Business Plan for Neem Oil Extraction Business.
Business Plan for Neem Oil Extraction Business.

Steps involved in neem oil production business. It includes-

  • Manufacturing
  • Packaging
  • Promotion
  • Distribution and
  • Quality control

Neem oil extraction process for commercial production in India

You can extract the neem oil from neem kernels or neem leaves. However, the manufacturing of neem oil even at a small scale requires the following basic machinery.

  • Mixer grinder/ food processor
  • Boiling Pot
  • Filter
  • Measuring cylinder
  • Expeller for neem oil which helps to compress and extract the neem oil.

You also need to set-up the neem oil solvent extraction plant if you are planning for larger-scale production.

Neem oil extracting process from leaves

Most of the process of extraction of neem oil is done from leaves because of the presence of high medicinal value. So, for this, you need to dry and desiccate the neem leaves first. Later after shredding these form smaller leaf segments. Add the water to these and heat the neem water solution till boiling temperature. During the boiling process, the content gradually becomes green in color. It also becomes more viscous as the oily constituents get leached from the shredded leaves into liquor. There is no much difference between neem seed oil and neem leaf oil. 

Neem oil extraction from kernels

The neem seeds oil can be extracted from neem seed of the smaller fruits. Generally, neem fruits are globular in shape. Usually, a greater viscosity of the oil is obtained if a crusher is used for squeezing these small fruits.

Initially, separate the neem kernels from neem seed shells. Then, gently pound and dehusk the kernels to take their peels. Then pour these processed kernels into a container to aid separation. Make sure that the seeds are not rotten.

Put neem seeds into a grinder and crush them. Here, you can use even stone crushers at this step. To grind the seed kernel, one can also employ a food processor. During the crushing procedure, the seeds are transformed into the semi-powdered form so that oil could be filtered out later.

Pour the powdered seeds into a metallic vessel. Pour the water into the vessel and mix. For every 10 parts of powdered seeds, add one part of the water is added.

Generally, 1 gram neem kernel will produce 100 ml oil. During the steps, one can see 100% organic oil coming out. Filter the oil and place it in an air-free bottle. Make sure that the surrounding temperature is not more than 23ºC. Before usage, you must heat the oil for 5 minutes so that its temperature is more than 55ºC.

For large scale neem oil extraction, you must use advanced techniques and machinery. The screened dry seeds are directly dispensed into the machine bucket.

Commercial use of neem oil

Neem oil is majorly consumed and essential ingredients for producing several products. The major application sector is cosmetics. Neem oil is used in moisturizers, soaps, face packs, and facial cleansers.

Neem oil is a powerful moisturizer for the skin. Besides removing dryness it also aids to maintain an even complexion. It has great antiseptic properties too.

Packaging & marketing of neem oil extraction business

You can pack neem oil into bottles of different sizes or quantities. However, you must mention the labels on the bottles with the name of the company and other information about ingredients or directions for usage.

Preservation of the extracted neem oil

Bottled neem oil can be stored in a cool place by the refrigerator for preserving its herbal value.

The cost to start a neem oil production business

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The cost of the neem oil extraction machine (Rs. 1,00,000 to Rs. 3,00,000 or more depending upon the capacity) so you can consider the cost as Rs. 1,50,000.

The cost of setting up the unit is Rs. 30,000

The cost involved in purchasing the raw material is Rs. 20,000

Labor charges are Rs. 50,000

The packaging cost is Rs. 10,000

The cost involved for getting the license and registrations is Rs. 20,000

Other miscellaneous charges are Rs. 20,000

So, the total costs involved in starting a neem oil extraction business is Rs. 3,00,000.

Marketing strategies for promoting the neem oil product

The herbal products formed from the different parts of neem must be marketed properly to have a successful eco-friendly business. Many flourished companies are already in this sector. So for a new company to get the brand name is a quite tedious task.

So, you should promote the neem oil extraction business by the customer awareness camps, product demos at events, malls, etc. Manufacturers should use some catchy tagline which creates the required brand image of the manufacturing company in the market.

Advertising needs sufficient expenditure from the capital which is important and inevitable. Manufacturers can get financial assistance from the bank in the form of loans with minimum interest, to meet the expenses.

Some of the most effective ways of promotion: newspaper ads, TV commercials, online portals, and participation in exhibitions.

Distribution of the neem oil product

Manufacturers must keep a record of present and potential clients. They must expand their distribution and should build a customer base. The logistics section must take care that there are no losses in terms of product quality or quantity during the product distribution to the clients.

Quality control of the extracted neem oil

You must appoint a few experienced staff to make sure the end products are superior in terms of quality. There should not be any discrepancy between the required product quality and the obtained product quality. Lastly, you must obtain quality raw materials for a quality product for your neem oil extraction business.

The conclusion to make money from neem oil extraction business

It is an excellent small-scale business idea. As organic farming is increasing, there would be a lot of demand to control pests organically.

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