DETERGENT POWDER AND CAKE

CONTENTS
SECTION I PRODUCT CHARACTERISTICS AND SPECIFICATION

SECTION II PRODUCT APPLICATIONS

SECTION III INDIAN DETERGENT INDUSTRY STATUS

SECTION IV INDIAN MANUFACTURERS

SECTION V IMPORT/EXPORT LEVEL

SECTION VI PRICE TRENDS

SECTION VII INDIAN DEMAND

SECTION VIII BROAD OUTLINE OF MANUFACTURING PROCESS

SECTION IX RAW MATERIALS REQUIREMENTS, UTILITY

AND AVAILABILITY

SECTION X GLOBAL SCENARIO

SECTION XI DISCUSSIONS ON ECONOMIC CAPACITY,

PROJECT COST AND PROFITABILITY PROJECTIONS

SECTION XII SWOT ANALYSIS

SECTION XIII FACTORS INFLUENCING THE POSITION FOR

A NEW INDUSTRY AND RECOMMENDATIONS

1
 SECTION - I

PRODUCT CHARACTERISTICS AND SPECIFICATION

Formulation

Synthetic Detergents are formulations comprising surfactants like alkyl benzene

sulphonate, fatty acid soaps, fatty alcohol, ester and similar compounds, bleaching,
optical brighteners, phosphates and anti-redeposition agents, fabric softeners and
certain other chemicals to improve the detergent action.

Classification

Classified either based on the charge on the organic part of the detergent (like anionic,
cationic or non-ionic) or on the case with which they decompose into smaller units which
would no longer foam (bio degradable or soft detergents and non bio degradable or hard
detergents).

Use pattern

Anionics are the most commonly used detergents for washing and cleaning applications,
while cationic (with germicidical characteristics) and non-ionics (with low foaming
propertion) are mainly used for industrial applications.

The traditional heavy-duty laundry powder contains approximately 15% active surfactant,
often Acid slurry (Linear alkylbenzene sulphonate).

The builder has traditionally been Sodium tripoly phosphate (STPP) at an average level
of 20 to 25%.

This phosphate builder is added to help soften the water.

SECTION - II
2
 PRODUCT APPLICATIONS

* Household and industrial cleaning

* Fabric washing powders, bars, liquids.

* Dish washing powder or liquid.

* General purpose cleaning powders or liquids.

* Toilet cleaners- blocks or liquids.

SECTION III
3
 INDIAN DETERGENT INDUSTRY STATUS

3.1. Production trends for soaps and detergents

40
35.92 37.72
Soaps
35
Synthetic Detergents
31.79
30
28.13
25
in Lakh tonnes

24.89
21.83
20
19.15
17.35
15 15.75
14.25
12.95
10 11.75 7.51
10.5
9.15 7.89
8 6.21 6.77
5 5.7
4.8 5.23
3.8 4.15 4.5
2.78 3 3.3 3.5
2.57
0
1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001
Year

Source : Indian Soaps and Toilet Manufacturer Association

Business Line

3.2. Growth rate in demand

3.2.1. Soap

Weighted Average annual growth rate in demand : 7 to 9% per annum

3.2.2. Detergents

Weighted Average annual growth rate in demand : 11 to 14% per annum

4
3.3. Market share of Major players

3.3.1. Toilet Soaps

Nirma
Hindustan
15%
Lever
65%

Godrej Soaps
8%

Colgate
Palmolive
Others
5%
7%

3.3.2. Detergents

Karnataka
Soaps
Unorganised
2% sector 29%

P&G Nirma
Henkel SPIC
10%
29%
2%
HindustanLe
ver

29%

5
3.4. Fabric wash market structure

The estimated production of synthetic detergents including powders and bars is

approximately 36 lakh tonnes in 1999.

The ratio of powder to bar is 60 : 40.

Bars
40%

Powders
60%

The detergent powder segment caters to three categories, lower, middle and higher end
markets.

6
3.5. Urban , Rural Market share

Detergent Powders Detergent Bars

Rural
60%
Urban
60%

Rural
40%
Urban
40%

Laundry Soaps
Rural
70%

Urban
30%

Percapita Consumption of Synthetic detergents in India (average) 2.5 to 3 kg

7
3.6. Characteristics of the Detergent market

More users opt for the convenience of detergent powders over bars.

Powder usage would improve as more users change their washing habit, in favour of
bucket wash.

Studies show that usage of synthetic detergents such as Surf, Ariel and Henko, has
increased, compared to the conventional detergent bars that were produced with
vegetable oils.

3.7. Market initiatives

Industry majors have been kept busy evolving responses to the challenges of growth in
the detergent industry.

Faced with distinctly sluggish volume growth, Hindustan Lever launched a rural
initiative to enhance the penetration of its products. Procter and Gamble Home Products
took a very different approach of streamlining its distribution network and reducing the
number of stockist, in an effort to cut costs.

HLL also put through de-bottlenecking and cost-cutting measures at Vashisti Detergents,
in which it has a stale.

Nirma, in an effort to cut costs, launched a series of ambitious backward integration

projects; completed, it will manufacture practically every key input.

Henkel SPIC, a relatively recent entrant into the market, waited two years and spent
Rs.60 crores to acquire control over key brands of Shaw Wallace group companies-
Calcutta Chemicals and Detergents India Ltd. The company, which made a rights offer
to fund the acquisition, hopes these brands will give it the critical mass when it comes to
competing with the heavyweights.

3.8. Growth trends of the industry

In terms of value, the Rs.4,000 crore detergents market is among the largest FMCG
categories in India, next only to edible oils and biscuits.

The Indian market for detergents is among the largest in the world.

Volume growth can be impacted by a variety of factors. Plateauing of demand in the

urban market and a slowdown in the rural offtake due to a fall in disposable incomes are
factors which could have had an impact on volumes. Another is consumer resistance to
sharp increases in the selling price by most manufacturers in late 1990’s.

3.9. Resurgence in rural demand

8
For players such as Hindustan lever, the recovery in volume growth has been spurred by
a resurgence in rural demand in 1999 first half. According to CMIE statistics, agricultural
output in 1998-99 was higher by 6.8 percent after declining by 5.4 percent the previous
year. This is likely to have left consumers in rural areas with higher disposable incomes.

Mr.Arun Adhikari, Vice-President, Marketing (Soaps and Detergents)), Hindustan Lever

feels the recovery in 1999 can be attributed entirely to higher rural disposable incomes,
after the contraction in the rural economy over the past two years. “:We can see this in
the kinds of brands, pack sizes and markets that the growth is coming from. The growth
in 1999 has come from the Northern and Eastern Markets which were depressed earlier,
where consumption has been low”.

Higher sales growth has been one reason why the major players have been able to put up
a reasonable show in recent years. But what probably brought about the dramatic
turnaround in financial performance in 1999 is the sharp improvement in profit margins
in the business.

3.10. Outlook

With the industry getting intensely competitive and with most players focussing on the
discount segment, the cost reduction has been an important pre-occupations for the major
players.

The companies have been trying to streamline their distribution systems, trying to bring
down inventories, margins and other wastages in the system. The introduction of IT
based systems, such as Enterprise Resource Planning, for production planning and
control also has the potential for substantial savings.

Apart from trying to squeeze out higher profit margins, players are also continuing their
efforts to pep up sales growth. The rural market, despite the high penetration levels, is
seen as one high growth area.

9
 SECTION IV

INDIAN MANUFACTURERS OF SOAPS AND DETERGENTS

A number of soaps and detergent units are in the unorganised sector and distributed all
over the country.

The important soaps and detergents units include the following

* Acme Synthetic Chemicals/Acme Soap Works,

308, Veer Savarkar Marg,
Dadar,Mumbai 400 028

* Adnoc Chemicals,
II, G/F, Reddy Hostel Complex,
Tilak Road, Hyderabad - 500 001.

* Anand Chemicals
7th Cross, PIPDIC Industrial Estate
Sedarapet-605 111

* Bharani Chemical Industries,

41, Chairman Muthuramier Road,Madurai-625 009.

* Belchem Industries India P.L.

69 A Poona Link Road
Chakki Naka-421 306
Kalyan East, Maharashtra

* Colgate Palmolive (India) Ltd.,

3rd Floor, Vaswani Mansion,
Dinshaw Vachha Road,
Churchgate, Mumbai-400 020.

* Detergents India Ltd.,

Kodur-516 101
Phone : (08566) 44018, 44038, 44048

* Diverseylever, Hindustan Lever Ltd.,

Haji Bunder, Sewree, Mumbai-400 015.

* Godrej Soaps Limited/Godrej & Boyce Mfg. Co. Ltd./

Godrej Hi Care Ltd.
Gate 1A, Godrej Soaps Complex, Plant 4
Pirojshanagar, Eastern Express Highway,
Vikhroli (East), Mumbai-400 079.

10
* Girijan Cooperative Corporation Ltd.,
Opp. New VUDA Park, East Point Colony,
Visakhapatnam-530 017,

* Hindustan Lever Limited,

Chemicals Division, ICT Link Road, B.D. Sawant Marg,
Chakala, Andheri (East), Mumbai-400 099.

* Henkel SPIC India Ltd.,

(Formerly known as SPIC Fine Chemicals Ltd.)
Peralam Main Road,
Thirunallar, Karaikal-609 607.

Office : Temple Tower, Third Floor,

476/6, Anna Salai, Nandanam,
Chennai-600 035.

* Hipolin Limited
4th Floor, Madhuban,
Near Madalpur, Ellisbridge, Ahmedabad-380 006

* Jindal Soaps and Detergents Pvt. Ltd.,

503/2, Gayatri Chambers
R.C.Dutt Road, Vadodara.

* Jagdish Chemicals
Plot No. 4718, GIDC., Ankleshwar, Bharuch-393 002

* Jocil Ltd.,
(A Subsidiary of The Andhra Sugars Ltd.,)
P.O. Box 216, Arundelpet, Guntur - 522 002 (A.P.)

Factory & Regd. Office : Dokkipudur,Gunthur 522 438

Andhra Pradesh.

* Jaya Soaps
89/1-A, Pannithittu Road,
Ponvandu Complex, Kirumampakkam-607 402

* Kalaivani Soap Works

A-10, Rural Industrial Estate,
Kattukuppam, Pondicherry-607 402

11
* Karnataka Soaps and Detergents Limited
(A Government of Karnataka Undertaking)
Regd. Office & Factory:
P.B. No.5531, Bangalore-Pune Highway,
Rajajinagar,Bangalore-560 055.

* Kerala State Detergents & Chemicals Ltd.,

(A Government of Kerala Enterprise),

Office & Factory: Kuttipuram-679 571,

* Kerala Soaps & Oils Ltd.,

(Govt. of Kerala Enterprise)
West Hill,Calicut 673 005

* Memba Chem Industries Pvt. Ltd.

19, M.J. Building, Ground Floor,
187 Princess Street, Mumbai-400 002

* Muller & Phipps (India) Ltd.

Queen's Mansion, P.O. Box No.773
Amrit Keshav Naik Marg
Mumbai

* Nirma Limited,
Nirma House, Ashram Road,Ahmedabad-380 009.

Factory Add: Block No. 16B,

Ahmedabad Mehsana Highway,
P.O. Mandali, Tal. Dist. Mehsana

* Neemtal Products
48, Dhanalaxmi Avenue,
1st Floor, Kashuriba Nagar,
Adyar, Chennai-600 020

* Nived Chemical Industries

Office: 6/1, Manjanakara St.,
Madurai 625 001.
Factory: 20-A, New Mahalipetti Road,
Madurai 625 001.

12
* Procter & Gamble Hygiene and Health Care Ltd.,
(Formerly Procter and Gamble India Ltd.,)
Tiecicon House,Dr.E Moses Road, Mumbai-400 011.

* Pond'
s (India) Ltd.,
GST Road, Chromepet, Madras 600 044.

C-60/69, PIPDIC Indl. Estate,

Mettuplayam, Pondicherry 605 010

* Reckitt & Colman of India Ltd.

Factory : 176, Sipcot Indl. Complex,
Hosur-635 126.

Office : 41, Chowringhee Road, Calcutta-700 071.

* Sun Chemicals
Office 6/1, Manjanakara St.,
Madurai 625 001

Factory 63/5, Viraganoor Village,

Madurai 625 009.

* Sadhna Soaps
Sadhna Indl. Estate,
S.V. Road, Oshiwara,
Jogeshwari (W)
Mumbai-400 102

* Swastik Surfactants Ltd.,

1st Floor, Industry Manor,
442 A Marathe Marg, Prabhadevi,Mumbai-400 025.

* Sree Rayalaseema Alkalies & Allied Chemicals Ltd., AS10

Gondiparla,Kurnool -518 004.

* Sri Chemicals,
A-5, Fishing Harbour,Visakhapatnam - 530 001.

13
* Sree Krishna Chemical Industries
Arya Griha, Vadakkevila P.O.,
Kollam-691 010, Kerala

* Soybean Detergents Pvt. Ltd.,

No.23/1, T.T.K.Road, 1st cross,
Sri Ram Nagar, Alwarpet, Madras-600 018.

Factory : No.9, G.K. Indl. Estate,

Arcot Road, Porur, Madras-600 116.

* Trimen Hygiene Products

G-5/87, Teachers Colony
Namakkal-637 0001

* Tata Chemicals Ltd.

Chemical Complex and Cement Plant:
Mithapur, Okhamadal -361 345, Dist.
Jamnagar.

Bombay House, 24,

Homi Mody Street, Mumbai 400 001

Detergent Plant: Pithampur Dist. Dhar, M.P.

* Thirumala Soap Works

20, Rural Industrial Estate,
Kattukuppam, Pondicherry-607 402

* Ultramarine & Pigments Ltd.,

Ultramarine Blue Division,
No.556, Vanagaram Road, Ambattur, Madras-600 053.

Detergents Division : Plot No.25-B,

SIPCOT Indl. Complex, Ranipet-632 403.

25-B, Sipcot Industrial Complex,

Ranipet-632 403, Vellore District,

* Varuni Chemicals (P) Ltd.

Admn. Office : 6/1,Manjanakara Street,Madurai-625 001.

14
 Office : 72, Medavakkam Tank Road,
Kilpauk, Chennai-600 010.
Factory : 63/5, Viraganoor Village,
Madurai 625 009.

* Vasu Chemical Industries,

Plot No.26-A & 41,Guindy Indl. Estate (North),
Ekkaduthangal, Madras-600 097.

* Vashisti Detergents Ltd.,

Plot No.B-7, MIDC Lote Parshuram,
Tal. Khed, Dist. Ratnagiri, Maharashtra-415 722.

* Victory Soap Works

A-115, PIPDIC Industrial Estate, Mettupalayam-605 009

15
 SECTION - V

IMPORTS/EXPORT DETAILS

5.1. Present Import level : Around 2200 tonnes per annum

Countrywise Imports of Other Washing Prpns & Cleaning Prpns Synthetic Detergents

Period April 2001 to March 2002

Country Quantity in Kgs

Australia 5655
Austria 9810
Belgium 57390
Brazil 55
Canada 3900
Chinese Taipei 9430
China P RP 18890
Czech Republic 10
Denmark 1696
France 52764
German F REP 600393
Hong Kong 2129
Indonesia 3840
Ireland 50
Israel 50
Italy 205850
Japan 177206
Korea RP 11825
Malaysia 9305
Mexico 1000
Netherland 136462
Nigeria 204
Norway 11110
Oman 1
Philippines 322
Poland 1250
Singapore 108718
Spain 34351
Sweden 75264
Switzerland 131176
Thailand 4859
Turkey 300
U Arab Emts 2249
UK 284234
USA 181671
Unspecified 100

16
Sample of individual imports of Detergent

Period 2002

Name of the Importers Quantity in Value in Rs. Country Date Port

tonnes
Epcos India Ltd., 0.150 44607 Germany 11.02.2002 to Mumbai
19.02.2002
Saf Yeast Co.Ltd., 0.420 48258 Belgium 01.05.2002 to Mumbai
05.04.2002
Lavino Kapur Cotton 2.880 205926 Germany 08.05.2002 to Mumbai
Ltd., 14.05.2002
Dexo India Crome Prod. 5.000 29170 Malaysia 06.02.2002 to Mumbai
10.06.2002
Lavino Kapur Cotton 0.310 44335 Germany 17.09.2002 to Mumbai
P.Ltd., 24.09.2002

5.2. Present Export level : Around 6500 tonnes per annum

Countrywise Exports of Other Washing Prpns & Cleaning Prpns Synthetic Detergents

Period April 2001 to March 2002

Country Quantity in Kgs

Angola 1206
Australia 213000
Baharain IS 10000
Bangladesh 103055
Benin 70630
Cameroon 64600
Chad 229100
Chinese Taipei 57600
China P RP 4040
Comoros 10000
Congo P REP 18720
Cyprus 6000
Djibouti 39500
Egypt A RP 10000
Ethiopia 55000
Fiji IS 20000
Gabon 25261
Gambia 8495
German F REP 480
Ghana 101214
Guam 8600
Guniea 19029
Guinea Bisu 9736
17
Haiti 26000
Hong Kong 39100
Indonesia 17405
Iran 300
Kanzakhstan 5000
Kenya 450
Kuwait 52200
Maceoernia 25725
Malagasy RP 71050
Malawi 34000
Malaysia 640702
Maldives 16000
Mali 29500
Malta 10000
Mauritania 38625
Mauritious 251777
Morocco 18004
Mozambique 19200
Namibia 15000
Nepal 238510
Netherland 6000
New Zeland 11800
Nigeria 93900
Oman 269500
Papua N GNA 24000
Philippines 1978302
Reunion 6026
Saudi Arab 13200
Seychelles 15810
Singapore 15000
South Africa 56182
Sri Lanka 129226
Tanzania REP 6000
Thailand 10700
Togo 67000
Trinidad 8000
Uganda 35381
U Arab Emts 686184
Ukraine 1300
USA 145497
Vietnam SOC REP 71100
Yemen Republc 86200
Zambia 2720

18
Sample of individual exports of Detergent

Period 2002

Name of the Exporters Quantity in Value in Rs. Country Date Port

tonnes
Artek Surfin Chemicals 1.500 49698 Dubai 01.0.2002 to Mumbai
15.02.2002
SSA Impex 5.500 933625 Duabi 01.03.2002 to Mumbai
15.03.2002
Sangam Organic Chemls 21.600 377325 Rashid 11.07.2002 to Chennai
31.07.2002
Henkel-Spic India Ltd., 102.000 1317939 Muscat 01.08.2002 to Chennai
13.08.2002

19
 SECTION - VI

PRICE DETAILS

Basic price for

Detergent : Rs.45 per kg.

Cake : Rs.32 per kg.

Taxes and duties : Extra as applicable

Price fluctuation

The selling prices of major detergent brands were hiked (much of it in the mid-priced to
medium segments) by between 9 percent and 25 percent in recent times, in response to
rising production costs. For instance, price increases in the case of brands such as Nirma
Popular and Wheel Green were around 8 percent.

Selling prices of products in the mid price segment, such as Ariel Supersoaker, were
hiked 20 to 25 percent, while that of those in the premium end, such as Surf Excel, Henko
Stain Champion were raised 10 to 12 percent.

20
 SECTION -VII

INDIAN DEMAND

ISTMA (Indian Soaps and Toilet Manufacturer Association) has estimated the Indian
detergent bars and powders demand to be in the region of 3.5 million tonnes per annum

Per capita consumption of detergent on all India basis is around 2.5 to 3 Kg, which could
vary between different regions depending upon the prevailing economic and social
conditions.

Likely growth rate in demand 7 to 8% per annum

21
 SECTION -VIII

BROAD OUTLINE OF MANUFACTURING PROCESS

1. General details

1.1. Liquid detergents

Liquid detergents can be manufactured in batches ranging from 5 to 100 kgs. A 5kg
batch can be conveniently prepared in stainless steel vessels or HDPE containers by
manual stirring. The required quantity of acid slurry is weighed in the container and an
equal quantity of water is added. 15% caustic soda solution is gradually added with
stirring till pH is brought to 7 as indicated by colour change, of a narrow range pH paper.
External cooling of the vessel is essential during neutralisation of the acid slurry.
Sodium sulphate is added and diluted by addition of water. Urea is added at this stage
along with perfume and stirring is continued for a further 10 minutes. The liquid
gradually clarifies after being allowed to settle for about 3 to 4 hours, after which the
contents of the vessel are filtered and bottled.

1.2. Extruded cakes/bars

Acid slurry is neutralised with soda ash and mixed in a sigma mixer. The other
ingredients are added in the following sequence with continued mixing.

a) Talc and kaolin

b) Sodium silicate and water
c) Paraffin wax
d) Starcgh, colour, optical whitener, perfume
e) STPP

The mixing is carried out for a further 10 minutes after which the plastic dough obtained
is milled through a triple roller mill and transferred to an extruder. The temperature of
extruder is maintained at 60 deg.C and the extruded bars are cut and stamped. The
stamped cakes are allowed to age under a current of coldair for nearly 8 hours, after
which the cakes/bars are wrapped.

1.3. Mechanically pressed tablets

The ingredients are either mechanically mixed or hand mixed as detailed under extruded
cakes/bars. A dough soft enough for tableting is thus obtained. Homogeneity of the
dough is to be ensured at this stage and, if required,mixing should be continued.
Individual portions corresponding to the exact weight of the final tablet are fed to the
mechanically operated tableting machine and stamped. The stamped tablets are
allowed to age for at least 8 hours, after which the tablets are wrapped.

1.4. Selected formulations for detergents

Listed below are some typical formulations based on Acid slurry, which can be readily adopted
for the manufacture of detergents even in manually operated units.

22
Detergent powders (household)
in Wt, %)
Premium grade Popular grade
85% active LAB acid slurry 18 15
Sodium carbonate (soda ash) 35 32
Sodium meta silicate 2 -
Alkaline sodium silicate - 7

Sodium bicarbonate 10 10
Sodium sulphate (anhydrous) 20 25
Sodium tripolyphosphate 10 7
Sodium carboxy methyl cellulose 1.5 1.0
Phthalocyanine blue colour or oil soluble yellow colour 0.1 0.1
Optical whitener 0.3 0.2
Perfume 0.1 0.1
Water 3 2.6

Liquid detergents
in Wt %
Light duty Heavy duty
85% active LAB acid slurry 20 25
Caustic soda Quantity required to bring pH quantity required to bring pH
to 7 to 7
Sodium sulphate 2 2
Urea 10 15
Perfume 0.1 0.1
Water q.s q.s.

Detergent cakes/bars/tablets
in Wt, %
Extruded bars/cakes Mechanically pressed tablets
85% active LAB acid slurry 18 16
Soda ash 15 20
Sodium silicate 10 10
STPP 15 10
Starch(tapioca/maize) 20 15
Talc 10 12
Kaolin 3 -
Paraffin wax 4 -
Opt., whitener 0.3 0.3
Colour 0.05 0.1
Perfume 0.1 0.1
Sodium sulphate - 10.0
Water q.s q.s

23
Historical details

In India, the first detergent powder (spray dried) was produced by Swastik Oil Mills Ltd.,
Bombay, in the year 1957. The composition of the powder at that time was as follows:

Hard Sod.ABS 20%

CMA 2%
STPP 35%
Silicate(100% basis) 7%
CMC 1%
Tinapol 0.2%
Perfume 0.2%
Sodium Sulphate 24%
Water 8%

STPP : The STPP content was quite high in this formulation. This practice of
using high STPP continued to prevail in the Western Countries until the recent years,
when restrictions were imposed on the use of STPP.

In India, the STPP content in the premium products was gradually reduced due to
economic reasons and now it has come down to 20%.

Soda Ash : Also, for a number of years, the premium detergent powders in
India did not contain Soda ash. In recent years, use of about 10% Soda ash has been
observed in the premium powders.

Silicate : The silicate level has gone up consequent to the reduction in STPP
content.

The average formulation of a present day premium spray dried detergent powder

LABS 20%
STPP 20%
Alkaline Silicate(100%) 15%
Soda ash 10%
CMC 1%
Optical brightener 0.2%
Perfume 0.2%
Sodium sulphate 25%
Water 10%

24
The average formulation of Hand mixed powder

The hand-mixed powder came into vogue only about 2 decades ago. The quality of this
powder has remained unchanged during this period. The general composition of hand-
mixed powder, which is mostly yellow coloured is as follows:

Soda ash 68 to 70%

Labs 12 to 13%
Water 18 to 20%

CMC is normally absent in these products.

Recent trends in formulation :

The recent trend in India is to use a mixed active system in detergent powders for better
performance at a lower cost.

For example, in a dry mixed powder, instead of using 12% LABS, a mixture of 8%
LABS and 2% AOS can be used. Similarly, in premium spray dried powders, the
performance can be improved by using a mixture of 14% LABS and 3% AOS in the
place of 20% LABS.

Special Liquid detergent

The liquid detergent products in India are mostly of the dish washing type. Basically,
they consist of a solution of sodium alkyl benzene sulphonate in water, using urea as
solubilising agent.

There are a few special liquid detergents in the Indian market, which are recommended
for woollen, silk and other fire expensive garments. The detergent active used in such
formulations has to be of the rigid type.

S Toyoda of Lion Fat & Oil Co., Japan had worked on the suitability of various detergent
actives for washing woolen and acrylic fibre. This observations are reproduced below:

Wool Acrylic

LAS Not good Fairly good

Alcohol sulphate Excellent Not good
Alcohol Ether Sulphate Not good Not good
Secondary Alcohol Ethoxylate Not good Not good
Alpha Olefin Sulphonate Excellent Excellent

The most suitable detergent active for wool and acrylic is AOS. A liquid detergent based
on AOS is already in the Indian market.

25
Concentrated detergents

During the past two years, a new trend has been seen in the Indian market. It is the
introduction of very expensive detergent powders. These are highly concentrated
powders containing more than 25% detergent actives and more than 25% STPP. Some
powders contain a bleach along with a low temperature bleach activator. Most of them
contain enzymes. These are heavy powders manufactured by agglomeration technology.

Source of technology

* Central Salt and Marine Chemicals Research Institute,

(Council of Scientific & Industrial Research)
Gijubhai Badeka Marg, Waghawadi Road
Bhavnagar -364 002

Major plant & machinery and suppliers

Name of the equipment Name of the supplier

Reactors Chemitherm Plants & Systems P. Ltd.,

30, Anandha Street
Alwarpet, Chennai-600 018

Texel Fabricators Pvt. Ltd.,

335, Sidco Industrial Estate,
Ambattur, Chennai-600 098, Tamil Nadu

Neutraliser Sharplex Agro Process (I) Pvt. Ltd.,

302, Hill View Industrial Estate, LBS Marg
Ghatkopar (W), Bombay-400 086

Pulveriser ACE Pack Machines

23, V.N. Industrial Estate
Bharathi Colony,Near Athiparasakthi Temple
Peelamedu, Coimbatore-641 004

Frigmaires Engineers
PO Box 16353, 8, Janata Industrial Estate
Senapati Bapat Marg
Opp Phoenix Mill, Lower Parel (W)
Mumbai-400 013

Blender ACE Pack Machines

23, V.N. Industrial Estate
Bharathi Colony,Near Athiparasakthi Temple
Peelamedu, Coimbatore-641 004

26
 SECTION IX

RAW MATERIAL REQUIREMENTS, UTILITY AND AVAILABILITY

Raw material requirements

Detergent powder : 600 tonnes per year

Acid slurry 0.20 tonne

Soda ash 0.40 tonne
Sodium bicarbonate 0.05 tonne
Sodium tripolyphosphate 0.15 tonne
Trisodium phosphate 0.03 tonne
Sodium sulphate 0.05 tonne
Sodium meta silicate 0.05 tonne
CMC 0.02 tonne
Colour 2.5 kg
Perfumes 1.5 kg
Optical whitener 0.002 tonne

Detergent cakes : 300 tonnes per year

Acid slurry 0.12 tonne

Soda ash 0.06 tonne
Starch 0.048 tonne
Talc 0.36 tonne
Sodium silicate 0.36 tonne
STPP 0.08 tonne

Utilities

Power 70 HP for the project of capacity 600 tonnes per annum.

Raw material availability

Name of the raw material Name of the supplier

Acid slurry Bharani Chemical Industries,

Gee Gee Khay Chemical Industry,
Varuni Chemicals (P) Ltd

Soda ash Atul Ltd., Gujarat

Birla VXL Ltd., Jamnagar
DCW Ltd, Mumbai
Gujarat Heavy Chemicals Ltd., Gujarat
Tata Chemicals Ltd., Jamnagar

27
Sodium bicarbonate Birla VXL Ltd., Jamnagar
DCW Ltd, Mumbai
Tata Chemicals Ltd., Jamnagar

Talc Mountain Microns and Minerals Ltd., Vadodara

Famous Minerals and Chemical Co., Mumbai
Kalpana Minerals Pvt. Ltd., Mumbai

Sodium tripoly phosphate Albright and Wilson Chemicals Co. Ltd., Mumbai
Hindustan Lever Ltd., West Bengal
Trisodium phosphate
Albright and Wilson Chemicals Co. Ltd., Mumbai
AVA Chemicals Pvt. Ltd., Mumbai

Sodium sulphate Jeyes Nitrochemical Pvt. Ltd., Chennai

Baroda Rayon Corporation Ltd., Surat

Sodium meta silicate Ricasil Industries, Gujarat

Sapana Industries, Gujarat
Aarti Ice Factory, Ambernath

CMC E.P. Industrial & Agro Chemicals Pvt.

Ltd.,Secunderabad
Reliance Cellulose Products Ltd.,Secunderabad
Meridian Chem-Bond Ltd.,Gujarat

28
 SECTION X

GLOBAL SCENARIO

US detergent Scenario

1. US Laundry detergent market (in millions of dollars)

Brand Manufacturer Liquid % Market Powder % Market

Sales Change Share sales change share
from from
1998 1998
Tide Procter & Gamble $872 12.0% 32.5% $902 -1.4% 44.0%
All Unilever 287 11.0 10.7 51 1.0 2.4
Purex Dial 234 31.8 8.7 72 -7.7 3.5
Wisk Unilever 232 -0.2 8.6 61 -13.7 2.9
Era Procter & Gamble 149 -4.4 5.5 -- -- --
Cheer Procter & Gamble 143 6.8 5.3 181 -7.0 8.8
Xtra USA Detergents 130 14.0 4.8 -- -- --
Arm & Hammer Church & Dwight 90 14.3 3.3 122 -0.4 5.9
Surf Unilever 84 2.9 3.1 147 -2.2 7.1
Gain Procter & Gamble 83 67.8 3.0 213 13.7 10.4
Dreft Procter & Gamble -- -- -- 38 -0.7 1.8
Private Label Various 73 NA 14.5 53 -8.4 2.5
Total 2678 11.4 58.0% 2044 -2.3 42.0%

2. Laundry detergent market share in US

Procter & Gamble

57%

Dial
7%

Church & Dwight

5%
Colgate Palmolive
4%
USA Detergents
Reckit & Benckiser 3%
1% Private Label
Huish
Unilever 3%
1% LaCorna
18%
1%

29
3. Personal care market share in US

Dial Procter &

15% Gamble
21%
Others
16%

Kao
2%
Unilever
33%

Colgate
Palmolive
13%

2 Japan Scenario

2.1. Estimated Soaps and detergents market shares in 1999.

Lion
30%

Procter & Gamble

20%

Kao
40%
Unilever
10%

30
 SECTION - XI

DISCUSSIONS ON ECONOMIC CAPACITY, PROJECT COST

AND PROFITABILITY PROJECTIONS

Installed capacity
Detergent : 600 tonnes per annum
Cakes : 300 tonnes per annum

Total Project cost Rs.94 lakhs

Assessment of project cost

1. Land

S.No. Description Cost

Rs.in lakhs
1.1 Cost of land of 0.5 acre at Rs.5.5 lakh per acre 2.75
1.2 Cost of levelling, laying internal roads/fencing and 0.28
compound wall

Subtotal 3.03

2. Building

S.No. Description Cost

Rs.in lakhs
2.1 Factory building of area 170 sq.m. at Rs.3200/sq.m. 5.44
2.2 Non-factory building of area 80 sq.m.at Rs.4500/sq.m. 3.6
Subtotal 9.04

3. Cost of Plant & Machinery

S.No. Description Cost

Rs.in lakhs
3.1 Cost of basic plant and machinery 13
3.2 Instrumentation and control 0.98
3.3 Pipelines and valves 1.3
3.4 Structurals for erection 0.65

Subtotal 15.93
3.5 Octroi, excise duty, sales tax, etc.at 12% 1.91
3.6 Packaging and insurance charges (2%) 0.32
3.7 Transportation charges (2%) 0.32
3.8 Machinery stores and spares (2%) 0.32
3.9 Foundation charges (2%) 0.32
3.10 Installation charges (2%) 0.32
Total cost of plant and Machinery 19.44

31
4. Technical know-how fees Rs.2.50 lakhs

5. Miscellaneous fixed assets

S.No. Description Cost

Rs.in lakhs
5.1. Electrification 3
5.2. Steam boiler and auxillaries 4
5.3. Water storage tank, borewell etc. 0.8
5.4. Fuel storage tank 0.8
5.5. Laboratory equipment 1.2
5.6. Office machinery & equipment 0.8
5.7. Material handling equipment, packaging machinery, 0.8
weigh balance, etc.
5.8. Diesel generator 4.5
5.9. Effluent treatment 0.8
Total 16.7

6. Preliminary & Pre-operative expenses:

S.No. Description Cost

Rs.in lakhs
6.1. Preliminary expenses 0.8
6.2. Pre-operative expenses:-
6.2.1 Establishment 0.8
6.2.2 Rent rates and taxes 0.8
6.2.3 Travelling expenses 0.8
6.2.4 Interest and commitment charges on borrowings 7.0
6.2.5 Insurance during construction period 1.8
6.2.6 Other preoperative expenses and deposits -
6.2.7 Interest on deferred payment -
Total 12

7. Provision for contingency Rs. 3.78 lakhs

8. Working capital margin Rs.27.32 lakhs

9. Total project cost Rs. 93.81 lakhs

Say Rs.94 lakhs

10. Means of Finance

Promoter's contribution Rs.38 lakhs

Term loan from financing institutions Rs.56 lakhs
Total project cost Rs.94 lakhs

32
11.I. Financial Statements
Rs.in lakhs
A Variable Cost

Raw material and utilities 213.5

Spares and maintenance 1.2
Selling expenses 18.3
Total variable cost 233
B Fixed cost

Salaries and wages 15

Interest on term loan and working capital loan 24.83
Depreciation 3.36
Administrative expenses 10.98
Total fixed cost 54.17
C. Total cost of production A + B 287.17
D. Selling price per kg. (in Rupees) 150
Detergent 45
Cake 32
E. Annual sales turnover (Rs.in lakhs) 366
F. Net profit before tax (Rs.in lakhs) (E-C)) 78.83
G. Breakeven point in % 41%

33
 SECTION XII

SWOT ANALYSIS

Strength Large percentage of the households in India

are already using the soaps and detergents ,
notwithstanding the low per capita
consumption.

Weakness Poor buying power of the average citizen

Opportunity The market can be developed by

application efforts

Threat Higher price segment product are unlikely

to enjoy large demand

34
 SECTION XIII

FACTORS INFLUENCING THE POSTION FOR A NEW INDUSTRY AND

RECOMMENDATIONS

The Indian soaps and detergent industry, backed by a countrywide retail network of
retailers, numbering nearly seven million, can grow significantly given further
reductions in excise tariffs. These duties should be further reduced in order to stimulate
demand.

In India, the most important criterion in formulation of detergent is the cost. The
consumer relates the performance to the price of the product.

The market is heavily skewed towards lower price products, as the entire Indian fabic
wash market and indeed the carbolics and the popular brands account for about 40% each
of the total market.

Detergent industry represents good investment opportunity in the small and medium
sector.

35