The Hindu Business Line : Karnataka Soaps hopes to make Waves with turmeric soap brand

Hyderabad, Sept. 24 With the price of sandalwood rising phenomenally due to dwindling reserves, sandalwood soap major Karnataka Soaps and Detergents Ltd (KSDL) has decided to expand its product offerings.

As part of this move, the company is test marketing its turmeric soap ‘Wave’ here. “We can’t have only one product as the sole bread winner for long. So we are expanding the base,” Mr B.H. Anil Kumar, Managing Director, said.

After turmeric soap, the company plans to introduce talcum powder and hand-wash lotions under the Wave brand. The move to look at other options is not without any reason. The price of the raw material (sandalwood) has gone up to Rs 35 lakh a tonne from Rs five lakh in 2001. Besides, the Karnataka Government has stopped giving the raw material at administered price.

The sandalwood soap contributes to 80 per cent of the company’s turnover (Rs 132 crore in 2006-07). The company has 70 per cent market share in the 8,000-tonne sandalwood soap market in the country. “It has been a major contributor for decades. But we need to have more such products as we go along,” he said.

Sandal farming

The company has decided to enter into buyback arrangements with progressive farmers. “Besides giving sandalwood saplings at a nominal price, we will help them with technical know-how and inputs,” he said.

After the 15-year maturity period, the company would buy back all the produce at a price existing at that point.

Though the company had devised a similar plan four years ago, there was not much headway. But this time around, the company plans to give a thrust in the Deccan plateau area, which is suitable for the growth of sandalwood.

The fall in sandalwood availability, however, did not hit production as there were enough stocks for the whole year.

“We have processed about 7,200 tonnes last year as against 6,200 tonnes in the previous year,” Mr Anil Kumar said.

This year, the company hopes to process 8,000 tonnes and achieve a turnover of Rs 140 crore.

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