HI industry plans Rs 5-cr adblitz to spur growth

Our Marketing Bureau in New Delhi

Reeling under a slowdown, the Rs 900-crore household insecticide (HI) industry plans to launch a Rs 5-crore integrated multi-media public interest campaign for the industry soon.

The campaign will be launched by Household Insecticide Manufacturers Association (HIMA)—the apex body of HI manufacturers—and aims to spur the growth and penetration of HIs by educating the public about the crucial role they can play in controlling diseases such as malaria, dengue fever and Japanese Encephalitis among others.

The growth in the HI industry has slowed down in the past year due to a high increase in prices of the products proportionate to a hike in excise duties. The cumulative growth in the industry is 30 per cent over the last 10 years while at present it is growing at 11 per cent per annum.

A low profile association till recently, HIMA formed in 1995, is expected to play a proactive role henceforth. ‘‘The executive committee represents about 80 per cent of the industry and, today we stand as a well-knit industry,’’ the newly elected president of HIMA and managing director of Godrej Sara Lee Mr A Mahendran said.
Apart from Godrej Sara Lee, HIMA includes members such as Bayer, Lever Johnson, PL Chemicals, Reckitt Benckiser, Pest Control (India), Sumitomo and Sun-up Botancis.

HIMA is also in talks with the World Health Organisation (WHO) to launch a joint initiative to combat diseases like malaria.

Decrying the government’s attitude towards the HI industry, Mr Mahendran said that the industry is reeling under heavy taxation—it is currently paying 16 per cent excise tax in addition to sales tax, customs duty and other levies amounting to over 20 per cent of total costs. Besides, to withstand competition, companies have to bear the major overhead of advertising continuously which is straining margins, Mr Mahendran said.

The body also decried the controlled nature of the industry: All new products have a long gestation period as they have to comply with very stringent Central Insecticide Board (CIB) regulations. The distribution and availability of insecticides is restricted due to a government regulation which stipulates that every stockist, wholesaler or retailer intending to stock and sell insecticides must have a stock and sell licence. ‘‘This adds to the cost and also makes it difficult for the consumer to access the product,’’ Mr Mahendran added.

According to recent studies, while 26.5 million households have an insect problem, the household insecticide user penetration is only 15 per cent. While around 50 per cent of the total size of the market is urban in nature, urban penetration is only 20 per cent. With improvement in literacy and health consciousness in rural areas and urbanisation, the category is poised for an explosive growth in the rural market where the penetration level is only 6.9 per cent.