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Neem Extract Market Overview
The global neem extract market generated revenue worth $653.7 million in 2015 and is expected to register a CAGR 16.3% during the forecast period (2016–2022). The market is mainly driven by the growing demand for herbal personal care products and increasing usage of neem products in livestock and pet care.
Based on segment, the neem extract market is categorized into seed extract, leaf extract, and bark extract. Among these, the bark extract category is expected to witness the highest CAGR during the forecast period. This can majorly be attributed to the growing demand for bark extract from the Asia-Pacific (APAC) region. The number of Ayurvedic companies in the APAC region, which manufacture medicines and personal care products using bark extract, is rising.
On the basis of application, the neem extract market is classified into agriculture, health & personal care, and animal products. Among these, the market is anticipated to register the highest CAGR in the animal products application during the forecast period. This can be attributed to the increasing demand for herbal animal food from countries such as the U.S., Brazil, and France. Further, an increasing number of pet animals across the globe is driving the demand for neem bark extract products.
Geographically, the APAC region contributed the highest revenue to the neem extract market in 2015. This was due to the presence of numerous Ayurvedic companies, such as Dabur India Ltd., Patanjali Ayurved Limited, Baidyanath Group, and Emami Limited, which consume neem extracts on a large scale in the manufacturing of medicines and personal care products. Within the APAC region, India, China, Australia, and Japan are the major markets for neem extract. It has been witnessed that out of the total herbal product exports from India, crude herbs and extracts account for about 60%.
In China, the major use of neem extract is for the production of pesticides and fertilizers. The country is also increasing its neem plantations to cut down on imports from neighboring nations, such as South Korea, Indonesia, Nepal, and India, as well as check soil erosion. In Australia, neem extract is mostly used in animal feed and the manufacturing of pet and livestock care products, such as cattle shampoo and dog sprays.
Neem Extract Market Dynamics
Acquisitions are trending in the neem extract market. The market is prospering rapidly, which is encouraging the market players to grow organically as well as inorganically. an increasing number of acquisitions with different strategic purposes has been seen recently among market players. For instance, in 2014, E.I.D. Parry (India) Limited acquired 100% stake in Bayer Group in Alimtec S.A., Chile. With the acquisition, E.I.D. Parry ensures reliable sourcing of astaxanthin for its subsidiary, U.S. Nutraceuticals LLC (Valensa). Now, the entire production of Alimtec is being used by Valensa for its astaxanthin products to cater to to the U.S. and European markets.
The growing demand for herbal personal care products is driving the neem extract market. The awareness among people about the harmful effects of chemical-based cosmetics on the skin, hair, and other body parts and the importance of neem-based products for health & personal care has risen to a considerable extent. About three decades ago, Ayurvedic medicines had been constantly losing their market in India due to the easy availability of allopathic medicines. However, advertisements and campaigns by Indian Ayurvedic companies, such as Patanjali Ayurved Limited, Sandu Pharmaceuticals Ltd., and Sri Sri Tattva, led to their resurging popularity. The medicinal benefits of neem are much better known in the APAC region; however, with the passage of time, Western countries such as Brazil, France, and the U.S., have also begun focusing on the use of herbal products for personal care.
The rising concerns about the side-effects of neem products are hindering the market growth across the globe. It has been reported that the consumption of neem bark or neem leaf-based medicines are harmful during pregnancy. According to PeaceHealth.org, infants who are exposed to neem leaf oils may develop Reye's syndrome. Few cases of infant death have been reported after oral consumption of neem supplements. The same organization states that neem extract-based products may be toxic for patients having a history of liver and kidney diseases. However, the Environmental Protection Agency (EPA) considers neem as Generally Recognized as Safe (GRAS) for food products. Further, due to the absence of any regulation against neem extract or neem-based products, the impact of this restraint is quite low.
The increasing demand for neem-based products across the APAC region is providing ample opportunities to the market players. Within APAC, India, China, and Philippines use a large amount of bio-based fertilizers, which are made from crop and animal waste. However, neem-based pesticides and fertilizers account for a small portion of the total agro supplements used in these countries. The growing awareness about the benefits of neem in livestock feed and agriculture, coupled with the rising area under neem plantation in these countries, is predicted to offer ample opportunities for the growth of the neem extract market in the future.
Some of the key companies operating in the global neem extract market are Neeming Australia Pty Ltd., E.I.D. Parry (India) Limited, Agro Extract Limited, P.J. Margo Pvt. Ltd., GreeNeem Agri Private Limited, Ozone Biotech Pvt. Ltd., The Indian Neem Tree Company, Fortune Biotech Ltd., Bayer AG, Bros India Group, Certis USA LLC, Terramera Inc., Grupo Ultraquimia and Bioneem Technology Industria e Comercio Ltda, and American Vanguard Corporation.
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