Present Scenario of Indian Soap Industry

1. Introduction : India today is one of the largest producers of soaps in the world. Today, the per capita consumption of toilet/ bathing soap in India is 800 gms, where as it is 6.5 kgs. in U.S.A., 4.0 kgs. in China,1.1 kgs.in Brazil and 2.5 kgs. in Indonesia. At present, the Indian Soap Industry is mainly divided into the Premium, Popular and Economy / Sub popular segments. Soaps form the largest portion of the FMCG (Fast moving Consumer Goods) market with bathing and toilet soaps contributing around 30% of the soap market. The FMCG industry can be divided into organised and unorganised sector. The size of the organised sector is about Rs.66 billion. The industry has been growing at a CAGR of 4% for the last three years. It accommodates product lines such as soaps, detergents, skin care, hair care, oral care, cosmetics, disinfectants, other toiletries and processed packed food products. Price of the premium segment products is twice that of economy segment products. The economy + popular segments cover up about 80% of the entire soap market. The penetration level of toilet soaps is about 88%.In India, soaps are available in five million retail stores, out of which, 3.75 million retail stores are in the rural areas. Therefore, availability of these products is not an issue. 70% of Indias population resides in the rural areas; hence around 50% of the soaps are sold in the rural markets. With increase in disposable incomes, growth in rural demand is expected to increase because the consumers are moving up towards premium products. However, in the recent past, there has not been much change in the volume of premium soaps in proportion to economy soaps, because increase in prices has led some consumers to look for cheaper substitutes. The major players in personal wash (Soap) market are HLL, Nirma and P&G. Unorganised FMCG, which is around 40% of the volume of organized industry with localised products, is valued at around 100 billion rupees. The herbal product market within FMCG is valued at Rs.50 billion & is growing at good speed over the past three years. In the soap industry, the popular segment has witnessed maximum growth within toilet soaps and it is the category driver. Consumers down grade from

the premium segment as and when they see better value in the popular category, at the same time consumers upgrade from the economy segment due to increased aspirations and affordability. With the rising disposable income in the rural sector and semi-metros, we expect good demand coming from this category in the popular range. Brand Positioning Then and Now Soap manufacturers originally targeted their products to the lowest income strata in Urban as well as Rural areas, positioning their brands as a way to removove dirt and clean the body. For some brands, that positioning persists even today with a focus on removal of body odour and keeping their user healthy. However, soap positionings are moving towards skin care as a valueadded benefit. Consumer Use Today Toilet soaps are always used in the bar form-there is no other form in the Indian market-and they are used in the bath. Showers are a distant dream for 70% of Indias population, who live in the villages where there is not even a regular supply of drinking water. In the urban areas, people bathe using a bucket of water, mug, and a bar of soap. In villages, they usually bathe by the river bank or village ponds. Although most of the urban houses have a shower facility, showers are seldom used because of scarcity of water. Consumer Prefrences Consumer prefrences are varied and are more regionally specific. India is divided into four regions : North, East, West, and South. Consumers in the North prefer pink colored soaps, which have floral profiles. Here the frangrance prefrence is for more sophisticated profiles reflecting their lifestyles. Freshness soaps with lime and citrus note are also popular prefrences as the climate in the North is very hot and citrus/lime scented soaps are seen to be refreshing. The East is not a big soap market; hence no particular prefrence skews. Consumers in the West exhibit prefrences for strong, impactful fragrances and somewhat harsher profiles compared to the North. Prefrences are more for the pink soaps with floral fragrances, primarily rose, which are positioned on the beauty platform. In the South, the skew is towards specific soap

segments like the Herbal/Ayurvedic profiles and aslo the Sandal profiles. Consumers here do not exhibit high brand loyalty and are ready to experiment and try out new brands. Hence, the most fast moving consumer good companies tend to launch their new brands in these markets, which they call test launch markets. Marketing Soap is primarily targeted towards women, as they are the chief decision-makers in terms of soap purchase. Medicated positionings like germ killing and anti-bacterial are marketed to families. About 75% of soap can be brought through these diffent kinds of outlets. Projected Growth of Laundry Products: Product Wise (000MT) Powder / Liquid Bar / Paste 1994 2010 1994 2010 World (Total) 14730 17037 10588 13870 (58.2%) (55.1%) (41.8%) (44.9%) Developed Countries U.S./Canada 2152 2478 22 25 W. Europe 2910 2962 153 155 Japan 831 867 44 46 Australia / 190 222 4 5 N. Zealand / Singapore Sub-Total 6083 6529 223 231 (96.5%) (96.6%) (3.5%) (3.4%) Less Developed Countries Latin America 1478 1840 1807 2248 E. Europe 1610 1583 867 852 W. Asia / 726 1117 1350 2074 Middle East N. Africa 276 386 512 717 Sub-Saharan 244 386 1381 2186 Africa India & Others 802 1037 1871 2420 China & Others 1971 2276 1015 1173 N. East Asia 565 648 99 115 S. East Asia 976 1235 1463 1854 Sub-Total 8647 10508 10365 13639 (45.5%) (43.5%) (54.5%) (56.5%) Source : Olmedio et al. 4th CESIO Conference Soaps And Detergents

Chemically speaking soaps are salts of fatty acid, generally mixture of various such salts. Based upon their properties, soaps are broadly classified in two types, namely water-soluble and water insoluble soaps. Fatty acid salts of alkali metals like sodium, potassium etc. With the exemption of Lithium and certain nitrogenous bags constitute the water soluble class, while fatty acid salt of alkaline earth and heavy metals are the water insoluble class. Soaps are which used as cleaning agents are of water soluble type. It is used for cleaning dirty clothes.. The indigenous demand growth 5% per annum. Detergents are available as powder bars and liquid. Bars make up for almost half of the market while liquids have an around 5% to 7% percent of the market. There is good scope for new entrepreneurs if they can produce good quality soaps and detergents. Following is the rough pattern of usage of various oils by soap manufacturers Laundry Soaps -Acid Oil, Rice bran Oil, Neem Oil & Palm Fatty Acid Distillate (PFAD) Toilet Soaps Rice Bran Oil, Crude Palm Stearine, Palm Fatty Acid Distillate (PFAD), Coconut Oil, Mowrah Country Oil, Linseed Oil, Neem Oil & Sal Oil. Optical Whiteners Types of textiles fibres natural or synthetic, do not appear perfectly white but exhibit a yellow tinge because of the presence of certain coloured impurities. The textile industry being predominantly cotton oriented, the consumption of optical whiteness is preferentially for cellulosics. However, there is an increase in the trend for the production of polyester and polyester blended fabrics. Therefore, the demand for a whitener for synthetics is also increasing. The demand for optical whiteness is increasing year after year. The member of items reversed for exclusive development in the small scale sector have been increased by addition of optical whitener agents for textile. There is good scope for setting up a new unit. Detergent Powder Synthetic detergents as an effective substitute to washing soaps have become increasingly popular in the country in the last 25 years. With more and more of awareness amongst all classes of society to maintain healthy ways of livings, this industry is to be manifold. Detergents are used for many purposes and there are wide ranges

of uses. The main uses are textile fabrics, cooking utensils, crockery, sinks, drawing surfaces and baths, floors and walls etc. Demand is found to be increasing due to the increase in the population and increase in awareness for cleanliness in people in coming years. Almost 67% of total production of synthetic detergent are produced in small scale sector has a very big production of soap and 50% of total production in small sector. A new entrepreneur can well venture in this field by installing an unit of blue detergent powder to satisfy present and future demand of people. Washing Soap and Washing Powder Soaps are the earliest form of detergents. Detergents are defined as complete washing or cleaning products, which contain among their ingredients an organic surfaceactive compound that passes soil-removal properties. Soaps, the alkali salts of long chain fatty acids, differ significantly in certain important performance properties from the synthetic surfactants. Detergent constitutes about 95% of total surfactants. The important uses of washing cake and powder are in hand soaps, shampoo, cosmetics, cleaning and degreasing of metals, washing and treatment of food etc. Soaps and detergents constitute important item of washing material of mass consumption. This industry in the country is more than 100 years old. The export of soaps and detergents is poised to leap forward owing to two factors. First, the quality of Indian soap is of the international standard and their prices are competitive. Hence, this industry is likely to reach new heights in export earnings in the coming years. A new entrepreneur can confidently venture in this field. Toilet And Herbal Soap It goes without saying that soap is indispensable to our daily life. Accordingly, the manufacturing industry should continue to develop as one of the most important industries. Soap may broadly be classified by use as soap household, industrial soap and special soap. Among them, the consumption of herbal soap is used for medical purposes. Household soap, which is most important quantitatively accounts for the larger part of the consumption of soap. Now-a-days herbal products are getting more popularity all over world, so herbals soaps has also good domestic as well as export potential. Toilet soaps account for less than 30% of the total soap production. There are more than 50 units in the organized sector and more than

6,000 units in the small and cottage sectors engaged in the production of soap. The small scale, which accounts for more than 65% of the total, soap output, has put up an impressive performance. Soap manufacture is very prospective industry with unlimited scope for future. New comer can well venture into this field. Cleansing Powder The powder commonly employed for the cleaning of household utensils is known as utensils cleaning powder. It is available in the market by various trade names such as Vim Biz and many others. Among all brands, cleaning powder Vim has captured a good market. It is most popularized for more than last two decades. All over the world the utensils cleaning powder, is an industry of massive proportions today. It is used in cleaning of all types of utensils, floors, tiles, washbasins and other sanitary items as so on. It has grown at a much faster rate during last decade in all developed countries of the world. There are about four units manufacturing of VIM type cleaning powder in the organized sector. It has been assumed that the Indias total demand for good quality cleaning powder is more than 2,60,000 MT per year. There is a good scope for new entrants. Aromatic Herbal Shampoo Shampoos have increased in importance beginning with soap based products and expanding. To prevent or alleviate abnormalities of epidermis skin and scalp, various bactericides, keratolysis agents and sensitizing dyes and peripheral nervous stimulators such as menthol have been used in hair tonic preparation. Such types of herbal shampoos contain aromatic compounds, safe for daily use. Accordingly in todays market place, shampoos formulated with synthetic surfactants have all but replaced hair tonics of the past. The consumer now demands the optimum in performance. Detergent Cake, Powder & Dish Washing Detergent Cake and Powder Soaps are the earliest form of detergents. Though at present the term detergent is used for synthetic detergent derived from petroleum products. The origin of soap making is unknown. The pheonicians were acquainted with it by at least 600 BC & it was known the gauls not letter than about 300 B.C. These chemical compounds are used for human comfort, cleanliness, and for industrial surface active applications. The success of any cleaning agent is to supply compounds with hydrophobic and

hydrophilic groups which will also appreciably decrease surface tension and increase mettability. Synthetic detergents are organic chemicals which promote better surface tension lowering than soaps. Where the use of detergents increases to the point of creating problems in municipal sewerage plants due to excessive foaming and inability to reduce the organic content of the sewage effluent, Bio-degradation of detergent compounds becomes an important factor. In the U.S., detergent compounds, which can be oxidized to simple end-products, are known as biologically soft syndets and are preferred in detergent compounding. Two of the most prominent detergents in use today. Firstly sulfated fatty alcohols, and secondly is alkyl Aryl sulfonates. The detergent bar for dish washing is of universal type and can be employed for cleaning of aluminium, brass and stainless steel utensils, crockery etc. The product is a very common item in every house from the lowest to the highest class, detergent cake and detergent powder largely used in the domestic houses, commercial sectors, hotel industries, garments industries and in many other sections of the society. There is high price, medium price and low priced detergents available. India has the 2nd largest market in the world after the U.S., and the market is growing at the rate 10% annually. Projected World Population and Detergent Counsumption Sr. Criteria World World D.Cs* D.Cs* India India No. 1994 2050 1994 2050 1994 2050 1. Populatiom in 5600 8500 822 950 1000 1250 millions 2. Laundry Product 25.5 40.5 6 9 2.5 3.5 consumption (million tonnes) 3. Per capita consump- 4.55 4.75 7.5 10 2.5 2.75 tion kg / year 4. Washing process: Machine 34% 30% 93% 93% 4% 5% Manual 66% 70% 7% 7% 96% 95% 5. Laundry Type: Powder 60 55 97 97 30 35 Bar 40 45 3 3 70 65 * DCs- Developed Countries

Composition of Properties of Soaps Oil Used Sr. Property Coconut Tobacco seed Rice Bran Karanja Neem Commercial Soap No. I II 1. Moisture, % 11.3 3.5 5.3 14.2 11.9 11.7 5.6 2. TFM, % 57.8 75.5 67.3 65.8 67.0 65.5 0.89 3. Glycerol, % 6.5 3.4 5.2 7.6 5.0 0.5 59.5 4. Free alkali, % 3.5 1.5 0.28 0.22 0.02 0.02 0.02 5. Combined alkali, % 15.3 12.4 19.2 12.2 11.9 11.6 12.6 6. Titre valueoC 21 15 28 20 35 37 36 7. Foam height in mm 150 150 175 165 170 150 170 after 5 minutes 130 120 145 175 150 125 150 8. Wetting time in seconds 22.5 4.4 5.1 5.7 7.1 3.8 7.6 9. Detergency, % 26 30 27 34 31 27 23 10. Colour White Deep cream Light biscuit Light orange Middle buff 11. Consistency after Hard Hard Soft Softer Moder- 24 hours than neem ately hard Classification of Detergent Powders High Compact Super Density Compact Density (g/ml) 0.65-0.72 0.62-0.72 0.85-0.95 Active Matter (Total) 10-20% 15-30% 25-50% Non lonic (As part 3-8% 10-15% 15-25% of Active matter) Bulders STTP. Zeolite. Zeolite Zeolite. Meta- Na-Silicate Silicate Bleach Perborate High Perborate Perborate Enzymes Conventional Conventional/Complex Mixture Formulation Fillers Traditional Complex Complex Carbonate/ None None Sulphate Processing 50-80% 30-50% Spray Drying Spray Drying Agglomeration Max.50% 50-70% 80-90% & Fluid bed