80% of small detergent units in Gujarat shut amid raw material crisis

Ahmedabad: Around 80% of Gujarat's small detergent and soap manufacturing units have shut operations amid a severe raw material crisis, pushing the sector into what industry leaders describe as its worst phase in recent years. The shutdown has affected hundreds of MSME units and left thousands of workers without jobs.According to industry representatives, Gujarat has about 850 registered small and medium units engaged in manufacturing soap and detergent powder. These units support the livelihoods of around 25,000 to 30,000 worker families. With around 90% of units now closed, an estimated 15,000 to 20,000 workers have been rendered unemployed.Naresh Jain, chairman of the Gujarat Small Scale Detergent Manufacturers' Association, said, "The crisis has been triggered mainly by an unprecedented rise in the price of acid slurry, or LABSA, a key raw material used in detergent production. The price, which was around Rs 135 per kg in Jan, has surged to nearly Rs 300 for local units. Multinational companies have long-term contracts with suppliers, so they can get this raw material at much lower prices. An artificial shortage has been created, worsening the situation for small manufacturers."According to the association, other input costs have also risen sharply. Industry members said packaging material prices have nearly doubled, with soap packaging increasing from Rs 36 to Rs 70. Small manufacturers, who largely compete with multinational brands in rural markets, said they are unable to match current retail prices because of soaring production costs.Ramesh Sudesha of the Soap and Detergent Association Gujarat (SDAG) said, "Small-scale manufacturers have more than 70% market share in rural areas, and all these factories are located in rural areas. This is a price-sensitive market. If raw materials continue to be sold at inflated rates, then many units would be unable to resume operations." Jain said, "We appeal to the govt to immediately intervene and reserve 20%-30% of raw materials for MSME units. Without urgent support, the closure of small detergent units will worsen further."
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