First_Research_Industry_Profiles

First_Research_Industry_Profiles - INDUSTRY PROFILE Soap...

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INDUSTRY PROFILE Soap and Detergent Manufacture QUARTERLY UPDATE 6/9/2008 SIC CODES: 2841, 2844 NAICS CODES: 325611 Industry Overview The soap and detergent manufacturing industry includes about 700 companies with combined annual revenue of $17 billion. Major companies in the consumer sector include divisions of Procter & Gamble (P&G); Unilever; and Dial. Major companies in the commercial sector include divisions of Ecolab and US Chemical. The industry is highly concentrated : the top 50 companies hold almost 90 percent of the market. COMPETITIVE LANDSCAPE Population growth, particularly households with children, drives demand in the consumer sector, while economic growth drives demand in the commercial sector. The profitability of individual companies depends on efficient operations and effective sales and marketing . Large companies have scale advantages in purchasing, manufacturing, distribution, and marketing. Small companies can compete effectively by offering specialized products, providing superior customer service, or serving a local market. The industry is capital- intensive : average annual revenue per worker is over $700,000. The industry is about evenly split between the consumer and commercial segments. Both segments are highly competitive, with large companies spending millions to maintain market share. Major products include laundry detergent, soap, dishwashing detergent, and toothpaste. Laundry detergent accounts for 40 percent of industry revenue, soap for 20 percent, and dishwashing detergent for 15 percent. Laundry detergent comes in powder or liquid form, and may contain bleach additives or color brighteners. Dishwashing detergent comes in powder, liquid, or gel form. Soap comes in bars or liquids, and may have moisturizing, antibacterial, or deodorant benefits. Companies in the commercial sector may also sell dispensing equipment and provide related training. Detergent production starts by combining liquid and dry ingredients. Spray drying produces powder detergents by spraying the liquid mixture through nozzles under high pressure to create small droplets. The droplets fall through hot air and dry into hollow granules. Heat-sensitive ingredients, such as bleach or fragrance, are added after spray drying. Agglomeration produces higher density detergent powders by using a liquid binder and a different mixing process known as "rolling" or "shear mixing." Dry blending mixes dry raw materials with small quantities of liquids. Detergents are packaged in cartons, bottles, pouches, or bags. Soap production starts by heating fatty acids or fats and oils, and combining them with alkali, such as sodium or potassium. The process, known as saponification or neutralization , produces a combination of soap and water (known as neat soap ) plus glycerin, which can be resold. Neat soap is converted into dry soap pellets through vacuum drying. An amalgamator mixes pellets with fragrances and colors. Rolling mills and refining
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First_Research_Industry_Profiles - INDUSTRY PROFILE Soap...

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