‘Company expected to grow by 8 to 10 per cent annually over the next five years’

The production line of the famous Mysore Sandal Soap is set to change over the next two years under a modernisation plan, which will also enhance the production capabilities of the 96-year-old Karnataka Soaps and Detergents Ltd. (KSDL).

Mysore Sandal Soap and Mysore sandalwood oil are recognised in the Geographical Indications Registry, making the products unique globally.

While the existing production plant has the capacity to produce 11,000 tonnes of soap annually, the modern plant will have the capacity to produce 15,000 tonnes.

The plant will also switch over from coal-fired boiler to gas-fired boiler, and the old soap plant will be dismantled, KSDL managing director S. Shekar, told presspersons on Friday.

“The new production capacity will meet the growing needs of the company that is expected to grow by 8 to 10 per cent annually over the next five years,” he said. The company on Friday reported a turnover of Rs. 322 crore and a net profit of Rs. 17 crore during 2012-13 against the turnover of Rs. 260 crore in 2011-12. “We have a target to reach Rs. 345 crore this financial year,” he added.

Wood requirement

KSDL, which has been promoting cultivation of sandalwood tree by selling saplings at subsidised price, has been procuring about 45 tonnes of sandalwood annually (for sandal oil extraction) through auctions in Tamil Nadu and Kerala.

“We compete with gutka and perfume manufacturers, among others, to buy sandalwood in auctions where the rate has been between Rs. 50 lakh and Rs. 60 lakh a tonne over the last 10 years,” C.M. Suvarna Kumar, deputy general manager (marketing), said.

Asked if high cost in auction was hurting the company’s profit margins, the official said the prices were revised to absorb the increased production cost. Mr. Kumar also said the company had distributed about 5 lakh sandalwood saplings over the last five years to farmers with a buyback agreement. “Once the trees are 15-year-old, oil can be extracted. More people are likely to take up sandalwood cultivation after they see the returns on yield,” he added.

To Sri Lanka

Mysore Sandal Soap could soon reach the shores of Sri Lanka, as KSDL plans to start exporting its products to the island nation. Mr. Kumar said the company saw a huge potential in Sri Lanka. Currently, United Arab Emirates, Saudi Arabia, Kuwait, Singapore, Malaysia and the United Kingdom are big markets for the company that exported nearly Rs. 8-crore worth of sandal soaps last financial year.

Dhoni issue

The row between Indian cricket team captain Mahendra Singh Dhoni, who was appointed brand ambassador for Mysore Sandal Soap and KSDL, was settled nearly a year ago through arbitration, the official said.

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