Business

Pricey palm oil makes soaps costlier: Agrawal

Wipro Consumer Care & Lighting said a dramatic increase in palm oil prices in the global markets, coupled with unusually-high freight charges during the pandemic, has led to an 8% increase in soap prices.

Palm oil imports from Malaysia and Indonesia, for soap manufacturing, have become very costly, according to Vineet Agrawal, CEO.

“Prices of palm oil have gone up significantly plus import costs have gone up, too, as international freight charges are unusually high now with no signs of them becoming better,’’ he said.

Key ingredient

Palm oil is one of the key ingredients in all variants of soaps under the company’s flagship brands Santoor, with an annual sales of more than ₹2,000 crore, Hygienix and Yardley while coconut oil is used in making Ayurvedic soap Chandrika.

According to Mr. Agrawal, the company has plans to rationalise its product portfolio comprising sanitisers, handwashes, surface sanitisers, floor cleaners and surface wipes by reducing the number of SKUs (stock keeping units) while retaining all segments.

“Between April and July 2020, there was a frenzy over sanitisers,” he said. “That’s over now and there is so much of sanitiser stock piled up with households and retailers,’’ he said while addressing a media round table.

On acquisitions, Mr. Agrawal said M&A activities had slowed down last year as travel was restricted. Also, target companies were not able to sell as prices and valuations had plummeted due to the pandemic.

“We will continue to have a focus on inorganic growth. If we find a strategic fit, we will be an enthusiastic buyer. We are looking at emerging categories in different countries,’’ said Mr. Agrawal.

The company had traditionally been bullish on the inorganic play to garner market share and push up revenue.

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Printable version | Apr 13, 2021 6:34:25 PM | https://www.thehindu.com/business/pricey-palm-oil-makes-soaps-costlier-agrawal/article33991723.ece

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