1

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

2

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

3

PRODUCT APPLICATIONS

SECTION III

* 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.

4

INDIAN DETERGENT INDUSTRY STATUS

3.1. Production trends for soaps and detergents

7.89

37.72

7.51

6.776.215.75.234.84.54.153.83.53.332.782.57

19.15

21.83

35.92

31.79

28.13

24.89

17.3515.75

14.2512.95

11.7510.5

9.158

0

5

10

15

20

25

30

35

40

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

Year

in L

akh

tonn

es

Soaps

Synthetic Detergents

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

5

3.3. Market share of Major players 3.3.1. Toilet Soaps

Hindustan Lever65%

Colgate Palmolive

5%Others

7%

Godrej Soaps8%

Nirma15%

3.3.2. Detergents

29%

29%10%

2%

2% 29%

P&G

Unorganised sector

HindustanLever

NirmaHenkel SPIC

Karnataka Soaps

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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.

Powders60%

Bars40%

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

7

3.5. Urban , Rural Market share

Detergent Powders

Urban60%

Rural40%

Laundry Soaps

Urban30%

Rural70%

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

Detergent Bars

Urban40%

Rural60%

8

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

9

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.

10

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.

11

* 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

12

* 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.

13

* 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.

14

* 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.

15

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

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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

17

Sample of individual imports of Detergent Period 2002 Name of the Importers Quantity in

tonnes Value in Rs. Country Date Port

Epcos India Ltd., 0.150 44607 Germany 11.02.2002 to 19.02.2002

Mumbai

Saf Yeast Co.Ltd., 0.420 48258 Belgium 01.05.2002 to 05.04.2002

Mumbai

Lavino Kapur Cotton Ltd.,

2.880 205926 Germany 08.05.2002 to 14.05.2002

Mumbai

Dexo India Crome Prod. 5.000 29170 Malaysia 06.02.2002 to 10.06.2002

Mumbai

Lavino Kapur Cotton P.Ltd.,

0.310 44335 Germany 17.09.2002 to 24.09.2002

Mumbai

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

18

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

19

Sample of individual exports of Detergent Period 2002 Name of the Exporters Quantity in

tonnes Value in Rs. Country Date Port

Artek Surfin Chemicals 1.500 49698 Dubai 01.0.2002 to 15.02.2002

Mumbai

SSA Impex 5.500 933625 Duabi 01.03.2002 to 15.03.2002

Mumbai

Sangam Organic Chemls 21.600 377325 Rashid 11.07.2002 to 31.07.2002

Chennai

Henkel-Spic India Ltd., 102.000 1317939 Muscat 01.08.2002 to 13.08.2002

Chennai

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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.

21

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

22

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.

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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

to 7 quantity required to bring pH

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

24

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%

25

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.

26

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

27

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

28

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

29

SECTION X

GLOBAL SCENARIO

US detergent Scenario 1. US Laundry detergent market (in millions of dollars) Brand Manufacturer Liquid

Sales %

Change from 1998

Market Share

Powder sales

% change

from 1998

Market share

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 & Gamble57%

Unilever18%

Dial7%

Colgate Palmolive4%

USA Detergents3%

Church & Dwight5%

LaCorna1%

Huish1%

Reckit & Benckiser1% Private Label

3%

30

3. Personal care market share in US

Dial15%

Procter & Gamble

21%

Unilever33%

Colgate Palmolive

13%

Kao2%

Others16%

2 Japan Scenario 2.1. Estimated Soaps and detergents market shares in 1999.

Kao40%

Unilever10%

Procter & Gamble20%

Lion30%

31

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

compound wall

0.28

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

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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,

weigh balance, etc. 0.8

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

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11.I. Financial Statements A Variable Cost

Rs.in lakhs

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) Detergent Cake

150 45 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%

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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

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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.