Nobel Hygiene asks govt to cut duty on raw material imports

Diaper makers in India are suffering losses due to low-cost imports from China and Taiwan.

Sharath Chowdary

Diaper manufacturing firm Nobel Hygiene has asked the government to either reduce the import duty on the raw materials used in making diapers or hike the customs duty on the inward shipments of diapers.

“Except few big players, all other diaper makers in India are suffering losses due to the low-cost imports from China and Taiwan,” Kamal Kumar Johari, Managing Director of the company told to The Dollar Business Bureau.

Elaborating on the unfavourable government policy towards diaper manufacturing in the country, he said, "The government is imposing 26 percent import duty on the raw materials used in making diapers, whereas it is levying 15 percent duty on finished diapers coming to India. As part of the bilateral trade agreements, it is collecting just 1 percent import duty on diapers shipped from Malaysia and Thailand. This is indirectly discouraging the ‘Make in India’ initiative.”

“We have entered the diaper industry in the year 2000. Initially for a decade, we imported diapers from other countries and marketed those products in India. We have observed lack of consistency in the Chinese and Taiwanese products. To deliver quality diapers, we imported machinery from Italy in 2010, and started manufacturing at our plant in Sinnar in Nasik district of Maharashtra,” Johari said.

This manufacturing unit, spread across 5 acres, is close to Jawaharlal Nehru (Nhava Sheva) Port, from where the company imports raw materials such as Super Absorbent Polymer (SAP), nonwoven, glue, pulp, gel, elastic tape etc. These materials are imported from different parts of the world including Canada, US, Japan, Singapore, Korea and Thailand. Other than marketing its own brands, Nobel Hygiene also manufactures diapers for private label requirements and exports to countries such as Australia, Malaysia, the UAE and parts of Africa.

“Baby diaper is the fastest growing product in the FMCG industry, witnessing a growth rate of 26 percent y-o-y and having a market size of Rs.5000 crore in India. We currently have 4-5 percent market share in the country and are targeting to capture 8-10 percent market within the next 4-5 years. We are expecting 30 percent rise in our sales to reach Rs.200-250 crore in the current financial year, compared to Rs.150 crore in the previous year. We have invested around Rs.100 crore in extending our product portfolio,” Johari informed.

He has introduced the company’s latest product – Teddyy Pant Style Diapers, at the product launch event in Hyderabad on Wednesday. According to him, Nobel Hygiene understands well about the body type of Indian babies. The company has a portfolio of both adult diapers and baby diapers.

Johari claims that they are the market leaders in the adult diaper category with 65 percent market share. They have wide product portfolio that includes nappies, wipes, nappy pads, adult pull ups, under pads and maternity pads.

Sharath Chowdary - Jul 27, 2016 12:00 IST