Karnataka Soaps & Detergents to rejig set-upApril 28th, 2008 - 11:42 am ICT by admin
Chennai, April 28 (IANS) Indian cosmetics major Karnataka Soaps & Detergents Ltd (KS&DL) - which produces the fragrant Mysore Sandal soap - is planning to rejig its organisational set-up to ensure high growth. “We plan to divide our operations into strategic business units (SBU) under separate executives assigned with the responsibility of improving business. Each SBU will be a profit centre,” B.H. Anil Kumar, managing director of KS&DL, told IANS here.
With competition getting fierce, the SBU route has become imperative for Karnataka’s state-owned company that is manufacturing and marketing soaps, talcum powder, cologne, hair oil, detergent powder, hand wash liquid, incense sticks and cooking oil.
Targeting a topline of Rs.1.70 billion this fiscal, KS&DL is adopting a twin-pronged approach for growth.
“We are looking at popular product segments even though the margins are low, and also new product categories like shower gel and bath gel,” he said.
Kumar added that the company was also planning to launch shampoo. KS&DL has recently made a foray into the liquid hand wash segment to cash in on the high potential at minimal cost.
Explaining the company’s decision to enter the new segment, Kumar said: “The price of palm oil, a key ingredient in our soaps, has increased by 20-30 percent and is further galloping forward. The liquid soap does not need oil but surfactants,” he added.
In the same way, KS&DL launched turmeric and herbal soaps when the supplies of sandalwood oil and sandalwood, the major ingredients of its soaps, went down drastically, he said.
“Importing sandalwood oil is one option, but the company has not looked at that so far,” Kumar added.
As a long-term strategy, KS&DL has started distributing sandalwood saplings to farmers and is also providing technical expertise for farming.
“The benefit of this farming experiment will be reaped only after 15 years,” Kumar said.
According to him, the company has decided to increase its advertising budget to seven percent of the projected turnover of the current fiscal.