Companies reduce sanitiser manufacturing as demand drops - Times of India

Companies reduce sanitiser manufacturing as demand drops – Times of India


NEW DELHI/MUMBAI: Most companies have either exited or slashed production of hand sanitisers to nearly nil in the wake of tepid demand after the Covid second wave last year.
Sales of sanitisers surged during March-May last year with the onset of the second wave, but started witnessing a decline in following months, forcing certain large companies to completely exit the category and the smaller ones to shut shop.
Homegrown FMCG major Dabur, for instance, has quit making sanitisers, while liquor giant Radico Khaitan has cut production of pure alcohol, which it was supplying to sanitiser companies.
“We had set up separate units during the onset of the pandemic in India to make alcohol for sanitation purposes for consumer companies as well as state governments,” Amar Sinha, COO at Radio Khaitan told TOI. “But currently low demand has forced us to consolidate that part of our business.”
Worse still, sales of sanitisers did not revive during the Omicron wave, which swept across India in December-end. This led to huge inventory, forcing certain companies to liquidate the stocks by giving them free with other products, or adding an extra sanitiser, while selling one unit.
Drug companies, which made a foray into this segment in 2021, are offering sanitisers free to trade channels and distributors, to get rid of massive stocks, industry experts told TOI.
“When we entered the market in 2020 our sales were about Rs 3 crore per month for the sanitiser range, but now are hardly Rs 20 lakh,’” Naveen Jain, promoter, Vize, a mid-range Gurgaon-based OTC (over-the-counter) company, said. “Now we are focussing on other OTC products like anti-cold, lozenges, foot care cream and nicotine chewing gums. We have also slashed production of sanitisers by over 90% since May last year.”
This is in stark contrast to FY21, when many FMCG and pharma companies not only entered the segment but quickly ran out of stocks. Sanitisers were easy to manufacture and procuring licences to make them was a smooth affair, an industry player explained.
In March 2020, the segment saw 152 new smaller players with 46% market share in value terms, market intelligence firm NielsenIQ had reported. “Apart from the branded players, most smaller ones have shut shop as the number of infected people are currently negligible due to vaccinations,” said Jagbir Singh, proprietor of Himachal Pradesh-based Symbiosis Pharmaceuticals, which supplies unbranded sanitisers to other businesses.
In addition, estimates from distributors across India suggested that hand sanitiser sales are currently at 10-15% of peak-Covid months.


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