Neem Extract Market Overview
The global neem extract market was valued at $653.7 million in 2015 and is expected to grow at a CAGR of 16.3% during 2016-2022, to reach $1,868.2 million in 2022. The market will be driven by the increasing demand for animal and pet care products. The increased use of neem extract in livestock feeding is expected to fuel the growth of the market during the forecast period. China and Brazil’s investment in neem plantation in the recent past, serves as a lucrative opportunity for the market to grow.
The neem extract market has been categorized into seed extract, leaf extract and bark extract. Seed extract was the largest segment of the neem extract industry in 2015, and is also expected to continue being the largest market during the forecast period. The seed extract market is growing mainly due to growing use of bio-based agro-products. Also, the key application areas of neem extract include agriculture, health and personal care, and animal products. The agriculture application accounted for the highest share of 40.0% in the neem extract market in 2015. The increasing demand for bio-based fertilizers and pesticides is fueling the growth of neem extracts in agriculture.
Taking into account the geographical landscape, Asia-Pacific will continue being the largest market for neem extracts and will be exhibiting a CAGR of 15.8% during the forecast period. Leaf extract and bark extract have higher market share in Asia-Pacific neem extract market as compared to other regions. This is due to the extensive use of toothpaste, powder, soaps, shampoos and other cosmetics in the region, where bark and leaf extracts are extensively used.
Neem Extract Market Dynamics
The high growth rate of the neem extract market is encouraging the industry participants to grow organically as well as inorganically. The increasing number of acquisitions with different strategic purposes has also been seen recently. For instance, E.I.D. Parry acquired 100% stake of Alimtec S.A. in 2014. Alimtec S.A., before the acquisition, was a part of Bayer. During the same year, Terramerra, a Canadian company acquired India-based Plasma Neem. In 2012, InQpharm, a Malaysia based company acquired Neem BioTech, a U.K.-based company.
The increasing concern of people and regulatory authorities towards the harmful effects of chemical-based fertilizers and pesticides on human health, has been compelling the farmers to use bio-based farm products. This has led to significant increase in the demand for bio-based fertilizers and pesticides. Following the effect, the demand of neem extract based fertilizers and pesticides is also escalating. Rich in proteins, amino acids, carotene and minerals, neem leaves and seed cakes are given as fodder to livestock population such as camel, goat, sheep and cross bred lambs, to increase their productivity. Neem is also known to be effective pest repellent for pet animals, which encourages neem oil manufacturing and eventually, drives the growth of the neem extract market.
Brazil and China observe neem as a highly beneficial tree, which is leading them to invest in its plantations. While China has already started investing in neem plantations, Brazil is looking for private sector investors for the same. This not only hints at the growth of their domestic production of neem extracts, but also points to the expected increase in exports from these countries. Moreover, many Asia-Pacific countries such as India, China and Philippines, have a large belt of neem plantation, which in light of the increased awareness of people towards the benefits of neem in animal care and agriculture, acts as a significant growth opportunity for the neem extract market.
Factor Hindering the Market
Neem trees grow in tropical regions, because of which they are mostly found in the Asian nations, particularly in India, which holds more than 60% share of the worldwide neem plantations. The other significant Asian nations with neem ranch are Myanmar, Thailand, Malaysia, and Indonesia. Neem trees also grow in some parts of Africa, but in less number. The neem product manufacturers import neem extracts from Asian and African nations, which increases the cost of their final product significantly. This urges them to shift to different herbs for the production of similar products, and thus acts as a barrier to the neem extract market.
Neem Extract Market - Competitive Landscape
Large number of players in the neem extract market and the industry’s high growth intensify the competition among players. Moreover, the switching cost for buyers is less, which further intensifies the rivalry in the global market. Products of different suppliers can be differentiated on the basis of their certifications such as ISO 9001, GMP, and HACCP.
Key players in the industry are focusing on research and development, and bringing out new products or new uses of the products in the market. Some major companies have raised funds to undertake clinical trials for neem extract in face creams, gels, biopesticides, etc. Some of the major companies in the neem extract market are Groupo Ultraquimia, Terramera Inc., American Vanguard Corporation, Bayer AG, Certis USA LLC, Boss India Group, The Indian Neem Tree Company, Fortune Biotech Ltd, Ozonw Biotech Pvt. Ltd., and Gree Neem Agri Pvt. Ltd, besides others.