PROGRESSING SOAP INDUSTRY

KANWAL SALEEM
(feedback@pgeconomist.com)
July 19 - 25, 20
10

Soap industry in Pakistan consists of around 2,500 factories, 180 in organised sector and the rest are cottage industries meeting the requirements of consumer in lower economic class, manufacturing one of the most essential item soap used by every person, every home, every day.

Despite high raw material prices, taxes and import tariffs, soap manufacturers in organised sectors are fetching high profits and resultantly soap industry in Pakistan is progressing.

Soap manufacturers in organised sector are however suffering owing to marketing of counterfeit soaps in the market. These are sold at 30 to 40 percent less rates as compared to original soaps.

According to local producers of soap and soap products, high raw material prices, taxes and import tariffs are a cause for concern. To cope with the situation, the industry demands lower tariffs and rationaliation of tax structure under which their products are able to compete in the market.

Soap-makers say that apart from smuggled soap imports, they also suffer owing to marketing of counterfeit soaps in the market.

Pakistan's soap industry imports most of its raw material, which makes its products costly as compared to smuggled soaps which are popular because of their low prices and good quality.

The Pakistan Soap Manufacturers Association (PSMA) has called for reduction in tariff and a calculation based on last year's imports indicates the country could save more than $22 million in this way.

The soap industry provides jobs for over 100,000 workers all over the country. Total production capacity of the industry is estimated at 250,000-300,000 tonnes of soap annually. A worker associated with soap manufacturing unit said the production of the best quality soap depends on the employment of good quality fats and oils, which should be least odorous, purest and whitest. The fats widely used for Tallows and the oils are of coconut castor and palm etc. A soap made from caustic soda is generally hard while a soap manufactured from caustic potash is soft.

Although soap is generally known as a cleaning agent and most of the soap today produced is for cleaning purposes, it finds extensive use in many diversified fields such as processing of textile, paper industry etc. The important characteristics of soap is its ability to act as an emulsifier by removing dirt, penetrating porous materials, dispersal of solid particles, removal of oil and grease, and production of foam when shaken or stirred.

Despite an onslaught of multinational companies (MNCs) in soap manufacturing industry, Gujranwala's local soap industry is flourishing day by day and penetrating in to the local markets of the country, market sources told Page.

According to them, the local soap industry has almost captured the laundry soap market and is now heading to outshine MNCs in beauty, detergent bar and washing powder markets. Within four years, the number of local soap factories has increased from 30 to 50 including four big units, thus increasing direct labour from 200 families to 1,000 families and indirect labour from 4,000 families to 6,000 families.

According to them, the local industry has brought the MNCs' sale to the lowest level and national industries' to 20 per cent of monthly 1,500 tons demand of laundry soap in the local market by increasing its market share from 40 per cent to 80 per cent, and within next five years more than 90 per cent of local laundry market would be captured by the local industry.

The cottage industry was lagging behind in toilet (beauty) soap as its share in the local market was just 30 percent of the monthly local demand of 500 tons because of refined quality of MNCs' products and a lack of finishing machines in the local industry.

In Gujranwala, the industry has a competitive edge of getting raw material including caustic soda, sodium silicate and cottonseed oil from Pakistan , while the price fluctuations of the imported raw material including palm oil, coconut oil, perfumes and palm kernal oil have affected the growth of the local industry.

Obsolete technology has been the main hindrance in growth of the local industry in beauty soap and detergent bar manufacturing, but now the industrialists are equipping their factories with modern technology to compete with multinationals.