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OGANISATIONAL STUDY AT KS&DL KARNATAKA SOAPS & DETERGENTS LTD INTRODUCTION Soaps are cleaning products that have become an essential part in our daily lives. Cleaning products play an essential role by safely and effectively removing dirt, germs and other contaminants, and thus promote a hygienic lifestyle. Soaps account for the largest single share of about 10% in the Rs 480 billion FMCG market. The toilet market is getting saturated at a high penetration level of 98% and is growing at a very modest rate. The soap, once only an urban phenomenon, has now penetrated practically in all areas including remote rural areas. The incremental demand flows from population increase and rise in the usage norm impacted as it is by a greater concern for hygiene. Increased sales revenues would also expand from up gradation of quality or per unit value. The market is littered over with several leading national and global brands and a large number of small brands which have limited markets. The popular and premium brands include Lifebuoy, Lux, Cinthol, Liril, Rexona, Shikakai, Nirma, Dettol etc. to name a few. The inventory, however, changes by the quarter-if not by the month. The market is expected to grow at rates ranging from under 4% to around 4.5%. These are very modest rates considering that the lifestyles not only of urbanites, but even of well-off rural folks are changing at a very high pace CMR Center For Business Studies Page 1 OGANISATIONAL STUDY AT KS&DL INDUSTRY PROFILE: Soap is one of the commodities which have become an indispensable part of the life of modern world. Since it is non durable consumer goods, there is a large market for it. The whole soap industry is experiencing changes due to innumerable reasons such as government relations environment and energy problems increase in cost of raw material etc. The changing technology and ever existing desire by the individual and the organization to produce a better product at a more economical rate has also acted as catalyst for the dynamic process of change. More and more soap manufactures are trying to capture a commanding market share by introducing and maintaining acceptable products. The soap industry in India faces a cut throat competition while multinational companies dominate the market. They are also facing severe threat from dynamic and enterprising new entrance especially during 1991-92. If we look back into the history of soaps & detergents, mankind knew about soaps nearly 2000 years back i.e. in 70 A.D. when Mr. Elder accidentally discovered the soap, when roasted meat over flowed on the glow in ashes. This lump like product was soap & had foaming & cleansing character. In 1192 A.D. the first commercial batch of soaps was made & marketed by M/s Bristol soap market in London, from there in 1662A.D. the first patent for making soap was taken in London. The world consumption of soap in 1884A.D. was said to be 2 lakh tonnes p.a. INDUSTRY OVERVIEW A report on soap manufacture in India Holla and R.R. Press of Tata Oil Mills Co. Ltd notes that soap consumption in India is expected to rise about 9.5% a year, to total 374,000 metric tons by 1990, 580,000MT by 1995, 11,914,000MT by 2009 and 15,325,000 MT by 2012. This will require expanding manufacturing capacity to approximately 13,135,000 MT by 2010. CMR Center For Business Studies Page 2 OGANISATIONAL STUDY AT KS&DL According to the report presented at soaps seminar conducted by the Oil Technologist’s Association of India on April 20, 2009, the largest growth potential is in rural markets. The main raw native materials used for manufacturing of soaps are rice bran, hardened rice bran oils and oils from mowrah, sal, neem, karanja and khakhan. Imported sources used include coconut and palm kernel oils. India currently has a total ban on the use of animal tallow. Also, groundnut is not permitted for soap manufacturing; it is solely used for edible purpose. The soap market in India is well developed and dominated by multinational companies and a few large Indian companies. A few major players, high entry barriers, fairly high rate of new product launches and high advertisement spending characterize this segment. H.U.L. is the market leader in majority of the soap segment. The soap market is dominated by three major players- Hindustan Unilever Limited, Nirma and Godrej. Together they have 88% of the market share. While H.U.L. has clearly been the market leader over the last many decades, Nirma has grown in past 15 years to command one-fifth of the market. The remaining market is held by Godrej, Palmolive, Wipro, Dabur, Reckitt & Coleman and Medimix etc Since the market power is concentrated with a few major players, soap market is a perfect example of an oligopolistic market structure. The penetration level for soaps is almost saturated in urban market and the rural market is not lagging behind. Indian markets are looking at ways to push higher usage. That’s why the players are trying every trick in book to boost per capita consumption as that is the only way to grow. HISTORY OF THE SOAP: CMR Center For Business Studies Page 3 OGANISATIONAL STUDY AT KS&DL Soap manufacturing was started in North America. Some American companies with well known names were started 200 years ago. During middle age soap was made at various places in Italy, France, England & other countries. France became famous & many small factories were established there. In India the first soap industry was established by North West soap company in1897 at Meerat following the Swadeshi movement. From 1905 onwards few more factories were setup. They are, • Mysore soap factory at Bangalore • Godrej soap at Bombay • Bengal chemicals • Tata oil mills • 1930 lever brothers company PROBLEMS OF SOAP INDUSTRY: Soap industry faces some problems incase of raw materials. The major ingredients are soap ash, linear alkyl, benzene& sodium. Tripoli phosphate poses number of serious problems in terms of availability. The demand supply gap for vegetable oil is 1.5 to 2 lakhs tons & is met through imports. In recent times, caustic soda and soap ashes in the cheaper varieties of soaps are quite high. COMPANY PROFILE: CMR Center For Business Studies Page 4 OGANISATIONAL STUDY AT KS&DL INTRODUCTION TO SOAP INDUSTRY:- Soap is one of the commodities, which has become an indispensable part of life of the modern fantasy world. Since it is non-durable consumer goods, there is a large market for it. The whole soap industry is experiencing changes due to innumerable reasons such as Government relations, environment, toxicological allergy problems, increase in cost of raw material etc. Following Swadeshi movement in 1905, few factories were set up and they were: 1. Mysore Government Soap factory at Bangalore. 2. Godrej Soaps at Bombay. The changing technology and even existing desire by the individuals and the organization to produce a better product at a mere economical rate has also acted as Catalyst for the dynamic process of change. More and more Soap manufactures are trying to capture a commanding market share by introducing and maintaining acceptable products. The soap industry in India faces a cutthroat Competition, while multinational companies dominate the market. THE INDIAN SOAP INDUSTRY SCENARIO: - The Indian soap industry has been dominated by handful of companies such as 1. Hindustan Levers Limited. 2. Tata Oil Mills (Taken over by HLL ) 3. Godrej Soaps Private Limited. 4. Recent entrants include - Colgate Palmolive Ltd., - Proctor & Gamble Ltd., - Nirma Soap Works, - ITC Ltd The Indian Soaps industry continued to flourish very well until 1967-68, but began to stagnate. Soon it started to recover and experienced a short upswing in 1974. This increase in demand can be attributed to:- 1. Growth of population. CMR Center For Business Studies Page 5 OGANISATIONAL STUDY AT KS&DL 2. Income and consumption increase. 3. Increase in urbanization 4. Growth in degree of personal hygiene. Soap manufacturers are Classified as, Organized and unorganized sector. KSDL is under organized Sector. PRESENT STATUS: - MARKET SCENARIO India is the ideal market for cleansing products. The country’s per capita consumption of detergent powders and bars stands at 1.6 Kg and soap at 543gms. Hindustan Lever, which heralds over the cleaning business, sells in all over the cleaning business. PROBLEMS OF SOAPS & DETERGENTS INDUSTRY: Industry faces some problems due to increase in the cost of raw materials. The major ingredients like soda ash, linear alkyl benzene and Sodium Tripoli phosphate poses number of serious problems in terms of availability. The demand and supply gap of vegetables oil is 1.5 to 2 Lakhs tons and is met through imports. HISTORY:- India is a rich land of forest; ivory, silk, sandal; precious gems are magical charms of centuries. The most enchanting perfumes of the world got their exotic spell with a twist of sandal. The world’s richest sandalwood resource is from one isolated stretch of forests land in South India that is Karnataka. The origin of sandalwood and its oil in Karnataka, which is used in making of Mysore sandal soaps, is well known as Fragrant Ambassador of India & Sandalwood oil is infact known as “Liquid Gold”. By the Inspiration of His Highness Maharaja of Mysore late Jayachamarajendra Wodeyar, the trading of sandalwood logs started which was exported to Europe and New destinations, but with commencement of First world War India faced Severe Crisis on the business of sandalwood. CMR Center For Business Studies Page 6 OGANISATIONAL STUDY AT KS&DL This situation gave rise to start of an industry, which produces value added products i.e., of Sandalwood oil.

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