By: Dr. S.R. Singh - Industrial Adviser (Chemical),

Office of the Development Commissioner (SSI), Ministry of Small Scale Industries, GoI, New Delhi

The small scale sector has acquired a prominent position in the economic structure of India. The contribution of the sector both towards economic development and removal of economic disparities among the cross section of society has been tremendous. This sector owes its definition to industries (development & regulation) Act 1951. The sector is defined in terms of investment limits in plant & machinery (original values) upto a prescribed limit. According to present definition “Industrial undertaking in which the investment in fixed assets in plant and machinery, whether held on ownership terms or on lease or by hire purchase does not exceed Rs. 10 million. However, no small-scale undertaking shall be subsidiary of, or owned or controlled by any other industrial undertaking. The small scale sector in India comprises of a widely divergent spectrum of industries, ranging from the micro and rural enterprises - using rudimentary technology, on the one hand - to modern units using sophisticated technology, on the other.

The sector, as of today comprises of 3.4 million industrial units spread throughout the country providing employment to over 19.2 million people. Its contribution to the socio-economic development of the nation is therefore significant. Over 7500 different products for domestic as well as international markets are produced in these units. Even in the phase of strict and difficult economic environment and other constraints, the sector has been able to register an impressive growth rate. The small scale sector today contributes about 40% of the value added in manufacturing sector and 6.75% of GDP of India. Its share in the national exports stands at over 34%. The sector accounts for about 95% of the industrial units in the country and thus is rightly called the growth engine of the Indian economy.

The small-scale sector is capable of addressing itself to the basic problems of Indian economy viz. unemployment and disparities in regional development. The process of liberalization and economic reforms have created wide ranging opportunities for the development of small-scale sector. However, at the same time changes in world scenario have thrown-up new challenges to the very existence of this sector, as the integration of global markets has made competitiveness both in terms of quality and cost vitally important as resourcing of quality goods at highly competitive prices has become the order of day.

Currently, knowledge-based industries like Information technology and Biotechnology are considered to be the thrust areas for growth. Industrial output is increasingly becoming knowledge driven. By developing new ideas and products, based on a strong research-the small scale industries could make a substantial contribution, provided they are able to develop a good marketing network.

Countries like India need to focus attention and make use of concepts based on their biodiversity resources such as wide range of medicinal and aromatic plants, including Neem. Bio-prospecting could provide a new area of growth. Agri and forest-based resources can be converted into value-added products, generating income and employment in developing countries. Bio-pesticides, bio-fertilizers and a wide range of health care products based on plant products need to be developed and produced for the world markets.

India with its huge bio-resources, large pool of technically qualified manpower and strong base in R & D, could benefit immensely from building a lasting image of environmentally friendly quality Indian product.


Technology Development at FFDC

With the growing global concern for environmental protection, awareness and preferences for the use of natural products, emphasis on organic farming, products derived from Neem are going to be increasingly in demand both in the national and international market place. This would necessitate a network of rural enterprises to organize the scientific collection of Neem seed, leaves and bark as raw material for the industrial units producing extracts, oil, cake and a wide range of industrial and consumer products based on these constituents and isolates. The small-scale sector can play a dominant role in the field of primary processing.

With the above vision, Small Industries Development Organization, Ministry of Small Scale Industries has launched an extensive project for developing products and processes based on Neem constituents and to promote their commercialization. The first phase of project was initiated at Fragrance and Flavour Development Centre (FFDC), Kannauj. The focus has been on developing the commercial process for solvent extraction of Neem bitters and oil, formulating the products based on them and evaluation of commercial parameters of the products and process developed. The next step is to make these technologies available for commercialization. The technology developed is selective solvent extraction and the process has been standardized at 1000 ltrs. of solvent extraction unit with the batch size of 200 kgs. of Neem seed kernel. Table-I depicts the flow diagram of the process with yield and quality parameters of Neem oil, bitters and cake in laboratory experiments. Table-II indicates the comparison of results obtained in the laboratory vis-à-vis pilot plant scale trial with 200 kg Neem seed kernel batch.

Table - I
Lab. Scale Experiments

Neem Seed Kernel
(Azadirachtin Content - 0.33%)

Table-II

Comparison of Results - Lab.
Scale and Pilot Plant Scale

Equipment
Batch Size kgs (Neem Seed Kernel)	100 gms	200 kgs

The bitters, Neem Oil and Cake obtained during pilot plant trials have been evaluated for quality parameters viz. acid value, colour value, Aza. content nitrogen, protein content and ash content. Table-III indicates the evaluation results and their comparison with standard values. Economic viability of the process has been studied at the pilot plant scale.

Table 3

The detailed analysis of cost inputs, receipts through sales and economics of production for a 200 kgs. batch (kernel) of solvent extraction is illustrated in Table-IV. The data indicates that selective solvent extraction of Neem Seeds for the production of bitters, oil and cake could be adopted as a profitable venture in the Small Scale Sector. The recommend size of Solvent Extraction unit is 5000 litres, facilitating a batch size of 1000 kg Neem Seed Kernel.

Table 4

At FFDC the emphasis of work has been on standardizing the process parameters for solvent extraction of various constitutes of neem seeds viz. bitters, oils, cake, development of commercially viable processes and products, their evaluation for performance and safety. It was however, realized that the neem seed collection and its primary processing for extraction of oil (by cold expeller technique) would be most ideally suited activities in tiny and SSI sector leading to creation of huge employment opportunities. With this in view it was decided to establish Technology Support Centre (TSC) at Jhalawar mainly dedicated to the field of primary processing

The Centre aims at creating awareness about Neem and promoting the concept of neem based products. The ultimate aim being to create employment opportunities in rural areas through scientific collection and processing of neem seed and also creation of employment opportunities through setting up of neem based industries.

The Centre is equipped with full fledged facilities for processing of Neem seeds, extraction of oil by cold press expeller, quality evaluation of raw materials and finished products. Two cold press expellers (6 bolts & 9 bolts) with a rated capacity of 60 kgs and 100 kgs of Neem seeds per hour have been installed. Besides, net house, poly house and facilities for product development have been created. Collection of Neem seeds was not known in the area of Jhalawar. TSC has been able to inculcate a trade culture for scientific collection of Neem seeds among the local population. During the last two years 20 tonnes of Neem seeds have been collected. Around 300 persons have been benefited. Demonstration and training programmes for scientific processing of Neem seeds using seed dryer, cleaner, decorticator, pulveriser have been organized. Major achievement has been in facilitating the development, installation and standardizing the process parameters for production of cold pressed Neem oil through control of temperature in expression chamber. The yield of the oil obtained in cold press expeller is about 32-35% based on Neem seed kernel.

The cold pressing technique has enabled to produce an oil of excellent quality with average 1600 ppm of Azadirachtin (0.160%). This indicates that the cold expression process recovers more than 50% of Azadirachtin present in the kernel. The realizable price of this Azadirachtin rich oil is in the range of Rs. 75-100 per/kg. Table-V depicts the characteristic of Neem oil obtained by Cold Press Expeller at TSC, Jhalawar.

table 5

The process parameters for cold expression of Neem oil have been standardized. The average yield of oil obtained at TSC with 1,000 kgs of seed kernels processing is 350 kgs. The detailed analysis of cost inputs, recoveries through sales and economics of production based on 200 MT of seed processing per annum is illustrated in Table-VI.

TSC, Jhalawar has been actively associated with efficacy evaluation of Neem based pesticides and fertilizers on the crops like coriander, garlic, soyabean, etc. The local farmers, entrepreneurs and the agricultural scientists have been associated in the evaluation and demonstration programmes for Neem based pesticides. The results have been highly promising.

Table 6

Commercial Exploitation of Neem - Future Projections
As a result of increasing awareness all over the world about serious health hazards coupled with severe damage to environment caused by chemical insecticides, pest control agents of plant origin have assumed much greater importance in view of their relatively low toxicity, environmental compatibility and biodegradability. Environmental protection has become the topic of the day. It is in this context that Neem has gained worldwide attention; and awareness has developed at the international level about its potential for applications in the field of pesticides, fertilizers, pharmaceuticals and a variety of health care products. Besides, Neem’s importance has been recognized for checking soil erosion and expansion of deserts.

In the Indian context, Neem has a vast potential for developing rural industries, products and processes that can yield food and health securities, sustainable green revolution with higher productivity and international trade. It is estimated that if the Neem seed potential in India if used to its full capacity, the entire natural pesticide demand of the world could be met by India alone. Besides there would be huge availability of Neem cake which could be used as supplement to chemical fertilizers. A large variety of pharmaceutical and health care products could be produced in huge quantity to meet the domestic and international demand. In the past few years there have been several initiatives by various ministries, Govt. organizations, entrepreneurs and NGO’s to accelerate the commercial development of Neem in India. A number of small scale units, as also a few organized sector units have ventured in the field of Neem, however, the current volume of business is almost insignificant as compared to the available potential.

According to available estimates, there are over 16.6 millions trees in India having the potential for the production of 0.66 million tons of Neem seeds. Major population of Neem trees happens to be in the state of U.P. (50.5%), Tamil Nadu (11.24%), Rajasthan (7.65%), Maharashtra (6.32%), West Bengal (5.5%), Gujarat (4.72%) and Karnataka (4.49%). The commercial collection of Neem seeds in terms of percentage of available seeds varies from state to state, Tamil Nadu harnessing the maximum. It is estimated that present commercial collection of Neem seeds in India is around 30% of the total available seeds. The current utilization is mainly for the production of oil through conventional expeller system, which results in inferior quality of neem oil. The need of hour is create awareness about scientific collection of Neem seeds and promotion and development of a large number of units in small and tiny sector in the field of quality Neem oil, fertilizers and other Neem based products. This would ensure the remunerative prices for Neem seeds to rural enterprises in the field of Neem seed collection. It is pertinent here to mention that the higher level of seed collection in Tamil Nadu is a resultant factor of higher demand by the industry and should be easily possible to raise the commercial collection of Neem seeds in the range of 50-60%.

Based on the available statistics and the data obtainable during developmental work done at FFDC and TSC, an attempt has been made to workout the future projection regarding potential of Neem, specifically in context of the Neem seeds, Neem oil and Neem based products. The Table-VII illustrates the future projection regarding the total business opportunities based on the 50% commercial collection of Neem seeds available in the country.

Table 7

Conclusion
Growing awareness and preference world over for natural products in areas like pesticides, fertilizers, health care products and emphasis on organic farming is likely to result in a huge demand both in the domestic and international markets for Neem based products. There are two distinct areas of industrial activities in the field of neem. The first relates to collection of Neem seeds, leaves, bark and their primary processing to manufacture extracts, oils and cake. The second area happens to be the manufacture of a wide range of products viz. pesticides, organic fertilizers, pharmaceuticals and a range of health care products using extracts, oils and cake as raw materials.

The activities of Neem seed collection and primary processing are highly labour intensive and have to be carried out at diverse locations depending on the availability of Neem trees. Due to the very nature of activity, the collection and primary processing is envisaged to be entirely in the small and tiny sector leading to creation of huge employment opportunities to rural and tribal population. In the case of extracts and neem oil, both by solvent extraction as well as expeller system, the industrial activities are expected to be dominantly in the SME sector. Based on the current scenario of Neem seed utilization atleast 80% of the commercial collection of seeds is likely to be processed for the production of Neem oil, extracts and cake in the SME sector. The present investment limit for small-scale sector happens to be Rs. 1 crore and these activities are considered techno economically viable within this investment range. Subsequently, if need be, the investment limit could be upgraded to Rs. 5 crore to accommodate the possible technological innovations. In the Table-VIII it has been endeavored to make future projections about the number of small-scale units, which could be set-up, total volume of business and the employment likely to be generated through harnessing the potential of Neem.

Table 8

Neem seed collection and their primary processing being highly labour intensive, low technology and less capital intensive operations, deserves all support for development in small and tiny sector. It is also pertinent here to mention that extracts and oil constituting less than 10% of weight of the seed, would be the main raw material for the organized sector for value added products. If the seed processing activities are taken in the organized sector it would involve an additional infructuous expenditure on transporting of entire seed, making the large scale operation rather economically unviable. The large sector should play an active role in dissemination of information on scientific collection and processing of Neem seeds so as to ensure the availability of quality raw material.

The volume of activity in the primary sector of Neem viz. collection and processing would be largely dependent on the growth in the production of Neem based products. In our perception large scale industrial units with inherent advantage for product development, manufacture of diverse range of product mix, promotion and marketing of innovative products and access to wider markets both domestic and international could play a leading role in the field of Neem based products.

The small scale sector with low overhead cost and flexibility to operate in the areas of low volume items could also play an important role in the manufacture of Neem based products for meeting the local demand mainly in the rural and semi-urban areas.

The corporate houses in collaboration with State Govt., R&D institutions need to take an initiative to help development and implementation of an extensive programme for commercial plantation of improved variety of Neem. We need to bring in focus that Neem would be an important source of industrial raw material in near future.

Equipment Glass Soxhlet Apparatus 750 Ltrs. Solvent Extraction
Unit with Soxhlet facility

Batch Size 100 gms 200 kgs
(Neem Seed Kernel)

Oil yield in 1st step 24% 21%
Bitters yield 12% 10.77%
Oil yield in 2nd step 19.4% 21.78%
Aza. content in 1st step oil 0.3% 0.3%
Aza. content in bitters 1.9% 1.9%
Yield of cake 42.3% 46.16%

The bitters, Neem Oil and Cake obtained during pilot plant trials have been evaluated for quality parameters viz. acid value, colour value, Aza. content nitrogen, protein content and ash content. Table-III indicates the evaluation results and their comparison with standard values. Economic viability of the process has been studied at the pilot plant scale.