The organised personal care industry in India
is estimated to be around Rs 170 bn in size. The industry is segmented into
soaps and detergents, skin care, hair care, oral care, cosmetics, fragrances
and men's toiletries.
The sector grew at a scorching pace in the early
nineties, with the increase in disposable income, urbanisation and changing
lifestyles. However, growth has slowed down in the last two years.
As a large proportion of the demand for personal
care products comes from the rural economy, the sector was expected to pick
up in the second half of 2001, on the back of a good monsoon. However this
expectation did not fructify and overall the sector recorded marginal growth.
Apart from increased rural income, industrial recovery could help boost demand
in the sector.
The growth in the toilet soaps industry has
been stagnating at 3%-4% in the last few years. The segment however has good
growth potential, as the present level of consumption in India is very low
as compared to other countries. In Apr-Nov 01, production of soaps increased
by around 4%, detergents by 4.9% and toothpaste by around 19% when compared
to the corresponding period of the previous fiscal.
Key Inputs
Caustic Soda, Coconut Oil, Soda Ash, Linear Alkyl
Benzene (LAB), Rice Bran Oil, Crude Palm Sterite.
Duty Structure
Product
Abatement
on MRP
Excise
Customs
(Basic)
2000-01
2001-02
2000-01
2001-02
Tooth Powder
NA
Nil
Nil
35%
35%
Tooth Paste
35%
16%
16%
35%
35%
Tooth Brush
NA
Nil
4%
35%
35%
Toilet Soap
35%
16%
16%
35%
35%
Synthetic Detergents
35%
16%
16%
35%
35%
Cosmetics & Toiletries
50%
32%
32%
35%
35%
Major announcements made in previous year’s budget
Basic excise duty on laundry soaps was increased
from 8% to 16%.
Toothbrushes would attract 4% excise duty against
nil earlier.
Countervailing duty on imported products would
be levied on MRP and not on CIF value.
Industry’s demands from Union Budget
2002-03
Major demands made by Confederation of Indian Industry
(CII) are as follows:
Customs duty on LAB used for production of synthetic
detergents should be reduced from 25% to 15%.
The abatement on MRP on soaps, detergents and
scouring preparations should be enhanced from the present level of 35% to
at least 40%, subject to the need for it being proven by data on post manufacturing
expenses, sale costs etc.
Toothpaste and toothpowder should be de-reserved
from Small Scale Industry.
Special Excise Duty on toilet preparations should
be reduced from 16% to 8%.
Key Players
Hindustan Lever, Procter & Gamble, Nirma, Marico
Industries, Godrej Consumer Products, Gillette India, Colgate, Dabur India,
Reckitt Benckiser.
