How to start Neem Oil Making Business ?


The healing properties, organic odour and the history of plants being used as medicinal aids for any body related anomalies has instilled the need of prioritising the natural flora and fauna extract as a cure rather than the modern medicine.

Among such flora and fauna, there’s this one plant which goes far beyond the history, has busted the myths to be true and is the most favourite counter of our grandmothers to any sort of ailment i.e Neem oil

Neem oil is an oil which is extracted from the neem tree and is used for the purpose of treating any skin, hair, soil, body ailments. It is a cold pressed oil which is generally dark, bitter and smelly. It has a pungent odour which resembles that of garlic because of the presence of sulphur compounds in it.

The neem oil can be extracted from the following parts of a neem tree :

  • Leaf extract oil
  • Seed extract oil
  • Bark extract oil

Depending on the application is it required for the demand for the oil required varies. However, the demand for neem oil has teen up and rising because of the consumer’s aversion to achieve an organic and cruelty free lifestyle for both their skin and body and this is how you encourage them to tame this up a notch by becoming a part of this neem oil business.


Market potential

The market for neem oil has been extensively widening because of its extraction processes and its residue from it. It has been estimated that India’s neem bear 3.5 million tons of the neem seeds as of the last  decade which can account for a neem oil extraction of 7 million tons in value.

This has indeed contributed to the potential which a neem oil possess in today’s herbal market which has grown in the past years because of its properties like: it is used as an anti septic, as a healer, as a medicine and as an aid to health issues thereby opening a market to cater to many dominant industries of India.

The composition of neem oil resembles that of the vegetable oils. To obtain the need oil the seeds are first broken open and then the kennels separated. In the end the neem oil extract weighs 50 times more than the actual weight of the kennels and is used for following purposes.

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  • It is used as an insecticide or a repellent against mites like : Aphids, whiteflies etc

  •  It is used as a fungicide against root rot, black spot etc.

  • It can be used as a foliar spray to protect the damage in leaves.

  • It is used to treat skin ailments like acne, oil prone skin etc.

  • It is used to treat problems associated with hair like dandruff, hair fall etc.

  • It is also used in ointments to heal scars, burns etc.

  •  It is used as an infusion in medicines and repellents to cure dengue, malaria etc.

License required

  • NOC under the state pollution control board
  • SSI/MEME registration
  • GST registration
  • Trade license
  • Factory license

 Investment required

The investment required to set up a neem oils making business is between ₹5 lakhs-₹7 lakhs.

Profits made

The profits made from a neem oil making business comes around to be ₹40000-₹45000 per month.


Target consumers

With the medicinal and healing properties of neem, the neem oil has opened a wide market to cater to. So, the target market for your neem oil making business would be:

Cosmetic industry: They make use of neem oil for the purpose of infusion in face creams, moisturisers, mists, soaps, hair oils etc and opens a market for all the consumers who consider organic and herbal plant infused body and face creams to be suitable for their skin type.

Spas: The spas make use of neem oil for the purpose of aromatherapy and the sense of calmness it brings in during messages, rubs, cleansing and exfoliating activities.

Pharmaceutical industries: They make use of neem oil in ointments, medicines, repellents as it acts as a shield from bacteria and fungus for open wounds and treats scars and burn effectively acting as an immediate cooling agent.

Skin care industries: These industries involve dermatologists and other skin specialists who create demand for neem oil among consumers because of its anti-aging, anti-dandruff, anti-acne benefits to the skin and scalp acquired through a direct or raw consumption of neem oil.

Meditative and retreat centres: Their demand for neem oil is bought by a need to create environment which infuses calmness, relaxation which is bought by the use of neem oil during meditational massages and exercises.

Agricultural industry: Neem oil is used by them as an insecticide to dismiss any sort of mite attack on the crops and soils like whiteflies, aphids etc and it also acts as a fungicide thereby preventing any root rot.

Gardening tool: it’s used by the botanist and households to keep their verandas looking beautiful and fresh by using neem oil as a foliar yo treat any damage in leaves, plants etc.

Read More : How to Start Herbal Hair Oil Making Business ?

Area required

The area required to set up a neem oil making business is 700-1000 sq ft.

 Raw material, Machinery & Manpower 

  • Neem kernels
  • Water
  • Bottles
  • Neem leaves
  • Neem seed  grinder
  • Oil extracted
  • Filter machine
  • Boiler
  • 1-production manager
  • 1-accountant
  • 2-skilled workers
  • 5- unskilled workers

Moreover ample training to these workers in terms of machinery usage, equipment a handling and safety and precaution measures must also be provided with.

Business model

The business model of a neem oil making business can be defined using 4 variants:

Value proposition: The unique selling point (USP) and the value which a neem oil making business is likely to bring to you is:

  •  It is organic, herbal and natural thereby it’s free from side effects, making it accessible by every consumer.
  • Pharmaceutical industry
  • Skin care industry
  • Cosmetic industry
  • Agricultural and fertiliser industry
  • Gardening tools
  • Spas
  • Retreat centres
  • Neem India products pvt ltd
  • Ozone biotechs
  • Fortune biotechs
  • Sun bionaturals pvt ltd
  • Velocity LLC

Marketing strategy: The marketing strategy that can be adapted by your neem oil making business could be:

  •  Pairing up with retail chains and acquiring bulk orders like Kama Ayurveda, The body shop and forest essentials by offering credentials in terms of R&D certifications, Clinical tests etc.

  • Launch a neem oil under  your brand name highlighting the natural extraction process, benefits through Tv advertisements, social media influencers etc.
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The neem oil making business has the potential and has witnessed the following growth prospects:

  • Growing demand for Ayurvedic and herbal medicinal treatments have boosted the exports of neem oil to Western Europe and middle eastern countries.

  • The domestic demand for neem oil has been up and rising because of the growing demand for organic and natural skin care products among the ages between 26-30 years.

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Profit margin

One can yield a profit margin of around 11% from a neem oil making business


If you are still skeptical about your decision to get into this business we’ve got some fact-checkers for you:

  • Firstly, the target market for your business is wide as the applications of neem oil are ranging from its use in cosmetic products to agricultural fertilisers.

  • Secondly, Once produced on a small scale because of scarce resources it can be sold to the retailers like Kama, body shop, forest essentials thereby gaining a large cut on commissions.

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