Companies reduce manufacture of disinfectants as demand drops

NEW DELHI/MUMBAI: Most companies have either given up or cut production of hand sanitizers to almost zero following lukewarm demand after the second wave of Covid last year.
Sales of sanitizers surged in March-May last year with the start of the second wave, but began to decline in the following months, forcing some large companies to exit the category altogether and smaller ones to close up shop.
For example, Dabur, the local FMCG giant, stopped making sanitizers, while liquor giant Radico Khaitan cut production of pure alcohol, which it supplied to sanitizer companies.
“We had set up separate units at the start of the pandemic in India to manufacture alcohol for sanitation purposes for consumer businesses as well as state governments,” said Amar Sinha, COO of Radio Khaitan to YOU. “But the current low demand has forced us to consolidate this part of our business.”
Worse still, sales of disinfectants did not pick up during the Omicron wave, which swept India in late December. This has led to huge inventory, forcing some companies to liquidate inventory by giving it away with other products for free, or adding extra sanitizer, while selling a unit.
Pharmaceutical companies, which made a foray into this segment in 2021, are offering free sanitizers to commercial channels and distributors, to get rid of massive inventories, industry experts told TOI.
“When we entered the market in 2020, our sales were around Rs 3 crore per month for the range of sanitizers, but now they are hardly Rs 20 lakh,” “Naveen Jain, Promoter, Vize, an OTC mid-range Gurgaon-based (over-the-counter) company, said, “Now we are focusing on other over-the-counter products like cold relievers, lozenges, foot care cream and nicotine chewing gum. We have also reduced the production of disinfectants by more than 90% since May last year. »
This is in stark contrast to FY21, when many consumer and pharmaceutical companies not only entered the segment, but quickly depleted their inventory. The disinfectants were easy to manufacture and obtaining licenses to manufacture them went smoothly, an industry player explained.
In March 2020, the segment saw 152 new smaller players with 46% market share by value, market intelligence firm NielsenIQ reported. “Apart from the brand players, most of the smaller ones have closed as the number of infected people is currently negligible due to vaccinations,” said Jagbir Singh, owner of Himachal Pradesh-based Symbiosis Pharmaceuticals, which supplies unbranded disinfectants to other companies.
Additionally, estimates from distributors across India suggest hand sanitizer sales are currently at 10-15% of peak Covid months.

About Author

Comments are closed.