Colgate shuts Aurangabad soap factory

Sources close to the company confirmed the development. They said the closure of the soap unit followed a recent employee separation scheme. All the workmen at the soap unit opted for the scheme. The company, however, declined to comment.

The administrative staff at the unit has been absorbed at Colgate's various office locations. The production of its toothpaste variants continues at the Aurangabad factory.

The installed capacity of the soap-making facility was 20,000 metric tonne, but the actual production was only 3,998 MT in 2003-04. The oral care business continues to account for over 90 per cent of the company's sales turnover.

The closure of soap-making unit is in keeping with the US-based parent Colgate-Palmolive Company's announcment in December 2004 to close about one-third of its 78 factories worldwide as it works to source its products from fewer manufacturing centres. The New York-based Colgate's last big restructuring charge came in 1995.

At that time, Colgate took a charge of $369.2 million when it announced plans to slash 3,000 jobs, or 8.5 per cent of work force, and close 24 factories out of 112.

In 2003-04, Colgate India reported a net profit of Rs 108 crore on a turnover of Rs 969 crore. In its 2003-04 annual report, Colgate India said investments needed to fund its growth are generated through continuous, company-wide initiatives to lower costs and increase effective asset utilisation.