Falling raw material prices has come as a relief for the around 50 small soap manufacturing units in Kanpur. In the last one month, prices of raw materials like soda ash and linear alkyl benzene (LAB) used in soaps and detergents have fallen by about 45 per cent.
Uttar Pradesh Soap Manufacturers Association president Mikki Manchanda said these manufacturers were finding it hard to cope with the unforeseen rise in prices and also a hike in safeguard duty imposed for the past 18 months.
“Their customer base eroded in the recent few months as the gap between the small soap manufacturers and the big brands narrowed,” he added.
In the last one year one, soap manufacturers hiked the prices three times. But now with raw material prices falling, they have decided to pass on the benefit to the customers.
Accordingly, the manufacturers have either slashed the prices of the soaps or increased the size from 115 gm to 150 gm, 300 gm to 500 gm and 600 gm to one kg.
Sagar Detergents Private Limited marketing manager Dileep Bajaj said the oil used in soap had come down from Rs 36 to Rs 26 per kg and LAB from 98 a kg to Rs 58 a kg. “These prices have come down due to plummeting of dolomite and acid slurry prices,” he said. Similarly, palm oil, another ingredient for soaps, has also seen a price cut by 70-80 per cent to $425 a tonne from $750 a tonne. Acid slurry prices too have declined to Rs 8 lakh per tanker from the earlier Rs 14 lakh per tanker.
About 60 per cent of small units had discontinued production due to the increased production costs earlier but have now started reopening shops. About 1,000 people depend on the sector for employment.
The city manufactures about 1.5 tonne detergent powder and cake every month.