Gandhinagar, Apr 13 (KNN) Nearly 80 percent of small-scale detergent manufacturing units in Gujarat have shut operations, with the remaining units likely to cease production soon due to a sharp rise in raw material costs, industry associations have claimed.
The Gujarat Small Scale Detergent Manufacturers Association and the Soap and Detergent Association Gujarat attributed the shutdowns primarily to a steep increase in the price of Linear Alkyl Benzene Sulphonic Acid (LABSA), a key input used in detergent manufacturing.
Raw Material Prices Triple
According to the associations, the price of LABSA, also known as acid slurry, has surged from around Rs 105 per kg in November 2025 to Rs 135 per kg in February 2026, and further to nearly Rs 300 per kg in March, reported The Indian Express.
The spike has been linked to disruptions in global oil supply following geopolitical tensions in West Asia, including the blockade of the Strait of Hormuz, which has impacted nearly 20 percent of global oil flows.
In addition to LABSA, the cost of soda ash has risen by Rs 6,000 per tonne, while plastic packaging costs have increased by around 50 percent, further straining production economics.
Industry representatives said the cost escalation has made it unviable to maintain price points in the market. Earlier, 200–225 grams of detergent could be sold for Rs 10. At current input costs, even 125 grams cannot be offered at that price.
Supply Chain Disruptions
The detergent manufacturing supply chain begins with the production of Linear Alkyl Benzene (LAB) by refiners such as Indian Oil Corporation Limited, Nirma Limited, and Reliance Industries Limited.
LAB is then processed into LABSA by sulfonators, which is subsequently used by detergent units along with soda ash, silicates and fillers to produce finished products.
Disruptions at the raw material stage have cascaded across the value chain, affecting production at the MSME level.
Impact on Employment and Market
Gujarat has around 850 small-scale detergent units employing approximately 30,000 workers. These units cater to nearly 60 percent of the rural market and about 15 percent of the urban market, where larger companies dominate.
The cost of producing detergent cakes has risen to Rs 25,000–28,000 per tonne. Including GST, packaging and transportation, the retail price reaches around Rs 40 per kg, affecting affordability and demand.
Industry Seeks Government Support
Industry associations have urged the government to intervene by reserving 20–30 percent of raw material supplies for MSMEs and ensuring more stable pricing of key inputs like LABSA.
They also called on manufacturers to moderate prices, warning that prolonged disruption could severely impact employment and supply, particularly ahead of the festive season.
(KNN Bureau)
