Soap Manufacturers Likely to Close Down Business
By Deodatus Mfugale
Soap industry in Tanzania dates back to just about three decades ago when individuals produced a few bars of soap using mainly low and crude technology.
Coconut oil as the major raw material for most small scale producers has for a considerable time been supplied by Zanzibar.
There were a few suppliers from Kilwa, Lindi, Dar es Salaam and Pangani. Historically, soap production in Tanzania has focused mainly on bar laundry soap. This can be explained by the fact that it was then affordable by low income earners and even by those who had no guarantee of a regular income.
Even today, many ordinary families acknowledge the dual use of a bar of soap for laundry as well as for washing themselves. To many ordinary Tanzanians, toilet soap is a luxury.
So the soap manufacturing industry grew through the decades from a small enterprise, usually owned by a family to a medium size unit producing not a score of bars but tons of soap.
Some producers have also diversified their line of production to include toilet soap, detergent, cleaning products and edible oil.
Thus from a handful of producers in the late 1970s, there are 18 companies today producing a total of 300,000 metric tons of soap annually and employing about 3,000 Tanzanians.
The soap industry in the country now covers seven regions with the number of factories in brackets: Dar es Salaam (10), Zanzibar (2), Tanga (2) and Morogoro (7). Others are Arusha, Mbeya and Mwanza regions each of which has one factory.
Companies which make up the soap industry in Tanzania are IPP/Bodycare Ltd, Tip Soap Industries, G & B Soap Industries, Boby Soap, Soap & Allied Industries and Lackhani Soap Industries.
Others are Abood Soap Industries, Bidco Tanzania Limited, Highland Soap, Lake Soap Industries, Tradeco Soap Ltd and Showerlux Industries Ltd.
Also in the list are Chemi & Cotex Industries (DSM), Chemi & Cotex Industries (Arusha), Murzah Oil, Sabuni Detergents, Bakhresa Soap and Changu Soap.
The 18 factories in their totality use only 30 percent of their installed capacity. This means there is still capacity to produce more, given the availability of raw materials at a reasonable price and the market demand. Yet regardless of their installed capacity the Tanzania Soap Industry is no more than a medium enterprise.
Raw materials for soap and edible oil factories
Soap producers require Refined, Bleached and Deodorized (RBD) Palm Stearin as a raw material. Crude palm oil is merely a compound from which they derive the raw material required.
The soap industry in the country needs 50,000 of RBD Palm Stearin. Of all the 18 companies, 13 are stand-alone soap manufacturers and must import RBD Palm Stearin for making soap.
They don’t import crude palm oil for the purpose.
Although RBD Palm stearin can be derived from palm oil through fractionation, the process requires heavy specialised technology of splitting fat.
Only two soap manufacturers who are also engaged in the production of edible oil have installed and commissioned such the plants in the country.
Besides the prohibitive cost of the plants, the whole process of palm oil production, refining and processing of palm oil products also requires heavy investment in palm plantations which may take up it four years before bearing fruits.
Again crushing plants must be located within plantations as the fruits must be processed within 24 hours, otherwise they become spoilt.
Experts in the palm oil industry say that economic refining and fractionation plants require an average of between 300 and 400 tons per day.
Due to these technical reasons, the Tanzania soap industry does not have the capital required for the heavy investments and will therefore continue to depend on imported RDB palm stearin for a long time in future.
Rising costs have made production of soap uneconomical
Currently, soap manufacturers in the country are producing at a loss as the cost of production has gone up. A standard 1x10 regular box (10 bars of soap) including packaging, costs 3,897/82 while the same is sold at 3,333/33. The producer thus suffers a net loss of 564.49 per box of 10 bars of soap.
Besides other factors, the price of RBD palm stearin has gone up from 320 USD to 485 USD per ton since September last year. This situation, coupled with the existing stiff competition, threatens to eliminate some soap producers from the industry. More>>
Mfugale, Deodatus . "soap manufacturers likely to close down business." Guardian 29 03. 2004. 29 03.2004
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