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NEEM BASED PESTICIDE

CONTENTS

SECTION I PRODUCT CHARACTERISTICS SECTION II PRODUCT APPLICATIONS SECTION III INDIAN MANUFACTURERS SECTION IV IMPORT/EXPORT LEVEL SECTION V 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 X DISCUSSIONS ON ECONOMIC CAPACITY, PROJECT COST AND PROFITABILITY PROJECTIONS SECTION XI SWOT ANALYSIS SECTION XII FACTORS INFLUENCING THE POSITION FOR

NEW INDUSTRY AND RECOMMENDATIONS

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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 Non drying,bitter liquid. Colour Greenish brown Odour Garlic,repulsive Refractive index at 40deg C 1.4617 to 1.4627 Specific gravity at 30deg C : 0.9087 to 0.9189 Iodine value 68 to 75.8 Saponification value 193 to 204 Unsaponification matter 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.

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The composition percentages vary from sample to sample depending on place and time of collection of the seeds. Fatty acids Percentage Myristic acid 0.2 to 2.6 Palmitic acid 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 C35H44O16 Classification Triterpeniod Molecular weight 720 Melting point 155 to 185 deg.C Appearance Microcrystalline pale yellow coloured crystals Moisture 50% moisture in fresh

10 to 15% moisture in semi dried fruit 9% in well dried fruit

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

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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.

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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.

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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, urea-coating 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

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* 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

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* 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

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SECTION IV

IMPORT/EXPORT LEVEL 4.1. Imports Nil 4.2. Present exports level of Neem oil Around 260 tonnes per annum 4.2.1. Countrywise exports of Neem oil Period: April 2001 to March 2002 Country Quantity in kg

Australia 9943 Austria 1000 Baharain IS 1015 Brazil 20990 Canada 8061 Chinese Taipei 2000 China P RP 2010 Colombia 100 Denmark 2648 Egypt A RP 812 Fiji IS 90 France 980 German F Rep 2720 Ghana 300 Greece 800 Israel 300 Italy 3700 Japan 15297 Korea RP 4082 Malaysia 18108 Mexico 8780 Netherland 2761 Philippines 1000 Sierra Leone 100 Singapore 5690 South Africa 5928 Spain 26040 Sri Lanka 4075 Switzerland 900 Thailand 985

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UAE 865 UK 2892 USA 102575 Zimbabwe 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. Vancouver 600 Ltr Jan 2002 Chennai M/S.Commercial Services Singapore 190 Kgs Jan 2002 Chennai Afsan Exports Singapore 90 Kgs Jan 2002 Chennai Plasma Power Pvt.Ltd. Los Angeles 1000 Ltr Feb 2002 Chennai Plasma Power Pvt.Ltd. Pusan 1000 Kgs Feb 2002 Chennai Southern Petrochemical Ind. Stockholm 6000 Ltr Feb 2002 Chennai Plasma Power Pvt.Ltd. Vancouver 1000 Ltr Feb 2002 Chennai Plasma Power Pvt.Ltd. Kawaihae 600 Ltr Mar 2002 Chennai Plasma Power Pvt.Ltd. Chicago 1040.88 Ltr Mar 2002 Chennai Plasma Power Pvt.Ltd. Port Tampa 832.70 Ltr Mar 2002 Chennai Plasma Power Pvt.Ltd. Livorno 1200.00 Ltr Mar 2002 Chennai Plasma Power Pvt.Ltd. Kahoma City 1000 Ltr Mar 2002 Chennai Plasma Power Pvt.Ltd. Chicago 1100 Ltr Mar 2002 Chennai Plasma Power Pvt.Ltd. Chicago 2000 Ltr Mar 2002 Chennai Plasma Power Pvt.Ltd. Jakarta 400 Ltr Mar 2002 Chennai E.I.D. Parry ( India ) Ltd.

Marseille 950 Kgs Mar 2002 Chennai

Plasma Power Pvt.Ltd., Chicago 30.00 Ltr April 2002 Chennai Plasma Power Pvt.Ltd. San Diego 600.00 Ltr May 2002 Chennai Plasma Power Pvt.Ltd. Chicago 1600.00 Ltr May 2002 Chennai Plasma Power. Los Angeles 2000.00 Ltr May 2002 Chennai Plasma Power Oklahoma City 1000.00 Ltr May 2002 Chennai Plasma Power Los AngeleS 2498.10 Ltr May 2002 Chennai E.I.D. Parry (India )

Avivil Tel 5.00 Ltr May 2002 Chennai

Plasma Power London 25 Ltr May 2002 Chennai Plasma Power London 25 Ltr May 2002 Chennai E.I.D. Parry ( NICE 420 Kgs May 2002 Chennai Plasma Power Mexico City 1600 Ltr May 2002 Chennai K. Sivaram Seoul 50 Kgs May 2002 Chennai Southern Manila 800 Lts May 2002 Chennai

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4.2.2. Countrywise exports of Neem extracts Period April 2001 to March 2002 Country Qunatity in Kgs

Austria 50 Japan 763 Kenya 5000 Malaysia 90 Mauritious 530 Netherland 1000 Spain 200 Sweden 6000 U Arab Emts 300 UK 525 USA 31503 Zimbabwe 2208 48169 4.2.3. Sample of individual exports of Neem based pesticide Period 2002 Name of the Exporters Quantity in

tonnes Value in Rs. Country Date Port

E.I.D.Parry (I) Ltd., 0.400 148200 Kobe 21.06.2002 to 10.07.2002

Chennai

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SECTION - V

PRICE DETAILS Price of Neem extracts Rs.370 per kg Price of Neem pesticide formulation Rs.460 per kg Taxes and duties Extra as applicable

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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.

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Use of Neem oil in pesticide sector Plant products recommended for pests and diseases

Product

Target crop Insect pest disease Dose

Neem seed kernel Neem oil

Coconut Rice Redgram Green gram Powdery Coconut Cotton Bengalgram Gingelly

Rhinocerous beetle BPH Sheath rot Shealth blight Pod borers Mildew Termite Mealy bug Whitefly Pod borer Shoot webber and Pod borer

With sand 1:2 ratio 3% FS 15 lt/ha FS (to be followed after neem cake soil applications) 2% FS 3% FS 5% spray on the base upto 2m Ht. 3% FS 5% FS 0.01% combined with Endosulfan 0.07% 0.01% FS

Neem cake Rice Coconut

Sheath blight Tanjore wilt

150 kg/ha soil application 5 kg/tree

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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 13-35 percent Carbohydrate 26-50 percent crude fiber 8-26 percent Fat 2-13 percent Ash 5-18 percent Acid-insoluble ash 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.

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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

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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%.

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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.

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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 Yield of azadirachtin (g/kg) Commercial Indian 0.75,0.2 Kenya 1.00 Nigeria 2.00 Ghana 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.

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Oil yield Crushing in Whole fruit Depulped seed Kernel Ghani - - 25-30% Expeller 406% 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 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

Wet grinder K.B. Engineering B/58, Kiran Estate, M.G.Road, Goregaon (W), Mumbai-400 062

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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

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SECTION VIII

RAW MATERIAL REQUIREMENTS, UTILITY AND AVAILABILITY Raw material requirement Basis: One tonne Deoiled neem cake 2.61 tonne Spices, vegetables and other chemicals Utilities:- Fuel 480 litres Power 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 mouth-washes. 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.

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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.

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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

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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 Cost

Rs.in lakhs 1.1 Cost of land of one acre at Rs.5.5 lakh per acre 5.5 1.2 Cost of levelling, laying internal roads/fencing and

compound wall

0.55

Subtotal 6.05 2. Building S.No. Description Cost

Rs.in lakhs 2.1 Factory building of area 320 sq.m. at Rs.3200/sq.m. 10.24 2.2 Non-factory building of area 70 sq.m.at Rs.4500/sq.m. 3.15 Subtotal 13.39 3. Cost of Plant & Machinery S.No. Description Cost

Rs.in lakhs 3.1 Cost of basic plant and machinery 45 3.2 Instrumentation and control 3.38 3.3 Pipelines and valves 4.5 3.4 Structurals for erection 2.25 Subtotal 55.13 3.5 Octroi, excise duty, sales tax, etc.at 12%� 6.62 3.6 Packaging and insurance charges (2%) 1.1 3.7 Transportation charges (2%) 1.1 3.8 Machinery stores and spares (2%) 1.1 3.9 Foundation charges (2%) 1.1 3.10 Installation charges (2%) 1.1 Total cost of plant and Machinery 67.25

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4. Technical know-how fees Rs.2.00 lakhs 5. Miscellaneous fixed assets S.No. Description Cost

Rs.in lakhs 5.1. Electrification 4.5 5.2. Steam boiler and auxillaries 4.5 5.3. Water storage tank, borewell etc. 0.8 5.4. Fuel storage tank 1.2 5.5. Laboratory equipment 0.8 5.6. Office machinery & equipment 1.6 5.7. Material handling equipment, packaging machinery,

weigh balance, etc. 1.3

5.8. Diesel generator 4.4 5.9. Effluent treatment 1.3 Total 20.4 6. Preliminary & Pre-operative expenses: S.No. Description Cost

Rs.in lakhs 6.1. Preliminary expenses 1.3 6.2. Pre-operative expenses:- 6.2.1 Establishment 1.3 6.2.2 Rent rates and taxes 1.6 6.2.3 Travelling expenses 0.8 6.2.4 Interest and commitment charges on borrowings 8 6.2.5 Insurance during construction period 1.7 6.2.6 Other preoperative expenses and deposits - 6.2.7 Interest on deferred payment - Total 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 Rs.68 lakhs Term loan from financing institutions Rs.103 lakhs Total project cost Rs.171 lakhs

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11. Financial statements Cost of production A Variable cost

Rs. in lakhs

Raw material and utilities 340.98 Spares and maintenance 4.04 Selling expenses 25.78 Total variable cost (A)

370.79

B Fixed cost

Salaries and wages 9 Interest on term loan and working capital loan 39.7 Depreciation 9.1 Administrative expenses 15.47 Total fixed cost (B)

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%

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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

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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 eco-friendly nature of the product, its use in highly relevant and growth oriented sector such as pesticides, export prospects and reasonable return.