'Sandalwood has to be grown as a commercial crop'

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Karnataka Soaps and Detergents Ltd (KSDL), which is synonymous with the Mysore sandal- wood soap, was established way back in 1916 as Government Soap Factory by the then Maharaja of Mysore, Nalwadi Krishnaraja Wodeyar, and his Diwan M Visvesvaraya. Even today with severe competition from heavyweights like HLL and Godrej, KSDL is a well-recognised entity with a strong brand recall both in the domestic and international markets. It has wiped out the accumulated loss of Rs 100 crore and is going to post profit for the third consecutive year in fiscal 2007-08 on a topline of Rs 160 crore. BH Anil Kumar, managing director of KSDL, spoke to FE’s Kavitha Venkatraman, during his recent visit to Hyderabad. Excerpts:

Are you planning to diversify into other product categories?

Nearly 90% of the turnover of the company comes from sandalwood soaps, which is in the premium category. Inadvertently, we have become a single product company. This is not healthy for the company, as the availability of sandalwood has reduced over the year. So, last year, we came out with products in the popular segment, which is a volume driven business. KSDL is outsourcing products for the segment from other manufacturers who are operating in the excise duty-free zones. This initiative has yielded very good dividends. The hand-wash and talcum powder, which were launched in Karnataka sometime back, have got good response and we plan to make it available in Chennai and Andhra Pradesh. Besides, plans are on to launch liquid soaps, showers and bath gels.

Is divestment a good option for your company?