Mumbai, Jan 25: What's in a name? But the fast moving consumer goodsindustry believes it's time to take a closer look at the word `FMCG' -- a nameby which it is known among customers and investors.The industry is understood to be rechristening itself as PMCG -- Packaged MassConsumer Goods -- in order to give more emphasis on the word "mass", sayindustry sources.
The move is aimed at giving a clear definition to the industry as one forthe masses and not just `fast-moving', they add. It is also directed atdistinguishing the branded industry from the non-branded one.An informalindustry resolution to this effect reveals that the word "fast-moving" holdsgood largely for daily consumption items such as vegetables and non-brandedatta. Daily use items such as soaps, detergents and shampoos, on thecontrary, are packaged, branded and for the masses."The word FMCG is more ofan Indian phenomenon. Nowhere in the world has the name been given to theindustry," said an official of a leading consumer goods company.
While the new name cannot be thrust upon customers (who have got used tocalling it FMCG), the industry will attempt to make all efforts to callitself `PMCG' -- be it in presentations or other forms of communications.
However, its more than just a name change for the industry which is gearingup to double the growth rate in one year if, and only if, the Governmentheeds to its recommendation in the ensuing union budget.
The current growth levels in the industry are 2-3 per cent for soaps anddetergents, and 10-15 per cent for toiletries.
The Indian Soap & Toiletries Makers' Association (ISTMA) has asked theGovernment to bring soaps and detergents in the `merit' rate slab of 8 percent excise duty and the toiletries out of the `demerit' slab of 24 percent. It has also demanded a reduction in custom's duty on rawmaterials.ISTMA has said since soaps and detergents are daily necessities ofmass consumption used extensively in both the rural and urban markets, theprices are largely determined by the cost of key raw materials likeindustrial oils, caustic soda, linear alkyl benzene (LAB), soda ash andsodium tripolyphosphate (STPP).
The association has thus pressed for the lowering of import duties on rawmaterials in line with the reduction in peak rates of duty. In the Unionbudget 1999-2000, the effective rates of customs duty on all raw materialswere increased by 3-4 per cent, thereby pressurising costs.
ISTMA has argued that the increase in raw material prices has led to higherprices of soaps which is the reason for the growth stagnating at three-fourper cent and low levels of per capita consumption, especially in ruralareas.
Estimates reveal that the per capita consumption factor of toilet soaps inIndia is just about 480 gm per annum as against 700 gm per annum forThailand and 1,060 gm per annum for Brazil.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.