how to start neem oil extraction business

How to Start Neem Oil Extraction Business

If you are planning to start a neem oil extraction business, you have landed at the right place. Here in this article, we have covered all the aspects of establishing the business including the manufacturing process, legalities, and much more.

Neem oil extraction business opportunity demands adequate knowledge about the oil extraction process. There are several techniques used in the industrial and commercial extraction of neem oil. Neem oil extraction using solvents like alcohol, ether, and hydrocarbons is the most used process in the industry. The choice of the neem oil extraction process depends on the nature of the chemical compound that’s being extracted.

Commercially produced neem oil treated with the solvent does not contain Azadirachtin. This type of neem oil is not suitable for use on certified organic crops. A different process of oil extraction produces different compositions of neem oil. It all depends on the usage and the purpose of the extracted neem oil.

For an entrepreneur interested to invest in the agricultural sector, the neem oil extraction business can be initiated with low capital investment.

Demand for Neem Oil

The main application of neem oil is in agriculture. In the agriculture industry, neem oil is generally used as a natural pesticide, insecticide, and fungicide. Containing different ppm azadirachtin in neem oil, it is used for different purposes in different dosages. Another industrial use is neem-coated chemical fertilizers like urea.

Other than agriculture neem oil has wide market potential in the cosmetic industry. In manufacturing skincare, haircare, and body care products, neem oil is an essential raw material. In the ayurvedic cosmetic industry which is now booming, neem oil is an essential ingredient.

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Neem oil is also an essential product in the herbal medicine industry.

Develop a Business Plan for Neem Oil Extraction

As with any manufacturing establishment business plan is an effective tool to have in neem oil extraction. According to the market study report determine what type of neem oil you will be extracting. It also helps you to determine the appropriate method and machinery. The business plan document will also help you to calculate your startup capital requirement. Craft a business plan on the basis of that. Determine your marketing strategy.

Legal Compliances for Neem Oil Extraction

In initiating the neem oil extraction business you need to first determine the legal pattern of your business. You can consider starting with limited expenses and can register your business as a sole proprietor or any business structure available at your location. You will need to obtain the required permits and licenses from the local authority.

Manufacturing Process and Machinery

a) Mechanical Pressing Method

The primary process of extraction consists of the grade-wise separation of seeds. Grading of seeds is done according to the amount of oil content in the seeds and with sizes as well. Firstly, the fruits are collected in a drum, and the kernels are separated to obtain the seeds. Later the seeds are woven dried and then feed into the oil-extracting machine in case of the mechanical pressing method.

The neem oil is obtained by pressing it mechanically and collected in a drum. Thus filtration is done to remove the various unwanted particles left in the extracted oil in order to obtain pure neem oil.

b) Solvent Extraction Method

In the solvent extraction method, solvents like petrol or white gasoline are mixed with the seeds after oven drying. The solvents help in extracting the neem oil out of the kernel up to a certain percentage. Added to that the neem seeds are pressed if needed. The resulting oil is stored in a silo where the pure neem oil is recovered from the crude one.

Promotion – How to Market Neem Oil

Concentrate to have business tie-ups with the industries that use neem oil as raw material. It is always advisable to launch at least one product with your brand name in retail. Create your own website. Register your business with the popular B2B portals. Concentrate on establishing a strong distribution channel for your product.