This would lower the company's thrust on a low-volume, low-margin business like toilet soaps. The move, if it fructifies, is expected to eventually see P&G's beauty-care soap brand, Camay, move off the retail shelves in the country.

Industry observers say the strategy will also be in keeping with the American multinational's global thrust on its fast-growing healthcare, laundry, feminine hygiene and hair-care businesses. Toilet soaps are not a part of its mainstream product portfolio. "We would not like to comment on speculation. However, we have maintained the level of support on Camay, and there has been no drop in the levels of this support," a P&G India spokesman said in a facsimile response.

Soaps and detergents together contributed about 24 per cent to the company's turnover of Rs 388 crore in 1996-97. Soapsalone chipped in with roughly 6 per cent.

Camay's share in the soaps market has dropped from 3.5 per cent two years ago to a negligible 1 per cent, industry analysts say. Sources said that though the contribution of toilet soaps to P&G India's turnover was rather low, the company's proposed move reflected the stiff competition in this market. Hindustan Lever controls 70 per cent of the soaps market, with domestic giants Godrej Soaps and Nirma having managed to carve their own niches in the segment.

Hindustan Lever commands a market share of around 35 per cent in volumes in the premium segment with the help of key brands like Liril, Dove, Lux International, Moti Luxury and Pears. Godrej's brands like Cinthol and Evita have a market share of roughly 9 per cent in the 70,000-tonne premium soaps market. The 5.2-lakh-tonne toilet soaps segment has seen a dismal volumes growth of 3-4 per cent in the past few years. "If players as big as P&G can even consider moving out, competition is obviously stiff. However,P&G's margins could actually improve if it opts out of the Rs 2,900-crore toilet soaps market," an analyst said.

Significantly, the soaps and detergents industry is one segment where advertising costs may exceed that of raw materials. In fact, the marketing of key P&G brands, Ariel and Whisper, was transfered to a wholly-owned subsidiary of the parent company, Procter & Gamble Home Products, on account of the huge expenditure incurred on advertising. P&G's annual advertising expenditure has been pegged at approximately Rs 26 crore.

Further, the advertising blitz for Camay, which was at its peak when the brand was launched in the early Nineties, has now been muted.

P&G had restructured its marketing alliance with Godrej Soaps two years ago, though Godrej continues to manufacture Camay for P&G in accordance with a manufacturing arrangement.

P&G recently sold its Ezee and Trilo detergent brands -- which were acquired from Godrej Soaps when it formed an alliance with the latter in 1993 -- to CussonsInternational.