Karnataka firm to earn Rs.35 crore selling India’s costliest soap

February 27th, 2012 - 7:49 pm ICT by IANS  

Chennai, Feb 27 (IANS) Selling India’s costliest soap at Rs.720, Karnataka Soaps & Detergents hopes to earn around Rs.35 crore from this newly-launched super premium product next year, a senior company official said Monday.

The Mysore Sandals Millennium soap is made of vegetable oil, special conditioners, moisturizers, vitamin-E, Jojoba-Mimosa, sandal oil, almond oil, hydrolysed milk protein and other specially-selected ingredients.

The Karnataka government undertaking is targeting high net worth individuals (HNIs) and would start doorstep delivery of the soap. Next fiscal, it would market the product in Maharashtra and Gujarat.

“We plan to sell around 600,000 pieces of Mysore Sandals Millennium soap next year of which around 100,000 will be exported. We will also expand our door delivery sales writing to HNI. For the door delivery sales, our price will be lower by 15 percent as there is no retailer margin,” D.N. Vasanth Kumar, general manager, marketing, told reporters after the product launch here.

He said the company had already sold around 80 percent of its 14,000 pieces manufactured.

“We have sold 18 pieces in 18 days. Some are repeat customers,” M. Seshagiri Babu, managing partner at Kamachi Foods, a franchise of Nilgiris departmental store here, told IANS.

According to Kumar, the company will be sending out around 50,000 letters to HNIs starting next fiscal.

“We found there is a market for super premium soaps as there are imported soaps sold at Rs.1,000 per piece in the market. The premium soap market size is estimated around Rs.5,000 crore,” Kumar said.

Apart from HNIs, Karnataka Soaps will be looking at star hotels, health spas and other up-market outlets for selling this super premium product.

Asked about the high price when the soap has 80 percent total fatty matter (TFM) similar to its other products, Kumar said: “The sandal oil content in the soap is far higher than what is in our other products.”

The Rs.205 crore turnover company hopes to close this fiscal with a topline of Rs.260 crore and a net profit of Rs.12 crore.

“Nearly 80 percent of our revenue is from Mysore Sandal range of soaps while the balance is from products like agarbathis/incense sticks, detergents, soaps, talcum power and others,” said S. Shekar, managing director.

According to him, the company targets a turnover of Rs.300 crore and a net profit of Rs.15 crore next fiscal.

Asked about the absence of the company’s baby soap made with almond oil on the retailer’s shelves, Kumar agreed there was difficulty in breaking the stranglehold of the rival brand as there is a lack of advertising support.

Kumar said the company’s advertising budget was just Rs.5 crore and it will be raised next year to Rs.12 crore.

He said the company is also planning to modernize its soap plant in Karnataka at an outlay of Rs.25 crore to be funded with a mix of debt and internal accruals.

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