In a state that is famously known for its sandalwood, the state government-run Karnataka Soaps and Detergents (KSDL), which manufactures the historic Mysore sandal soap, is facing a severe shortage of sandalwood oil.
KSDL sources told The Federal that the production of sandalwood oil, a vital ingredient for making the soap, has dropped from 4,068.28 kg in 2020-21 to 719 kg by 2023-24. Senior officials are now contemplating importing 90 per cent of the required sandalwood oil (about 7,000 kg) from Australia, where sandalwood is grown.
The sandalwood oil production has largely dropped due to the poor quality of the wood, said KSDL sources. The company had purchased 94 tonnes of sandalwood pieces from farmers who cut the trees prematurely to preempt sandalwood smugglers. This leads to the wood having less girth, making it difficult to extract oil, added the officials.
Efforts to make sandalwood oil
In an interview with The Federal Karnataka, Prashant PK, KSDL Managing Director, said: "A global tender will be issued to import sandalwood oil to counter the current shortage. Moreover, all efforts are being made to increase the production of sandalwood crop locally, and get sandalwood directly from the farmers to make us more self-sufficient."
In fact, he revealed that KSDL has tied up with around 670 farmers to grow sandalwood as a commercial crop on 3,586 acres scattered across the state. This will help us to become self-sufficient in making our own sandalwood oil, he added.
The organisation has also distributed sandalwood saplings to farmers under the “GrowMore, Grow Rich” scheme to motivate them. Officials said that 2,800 saplings have been distributed in Bengaluru and Mysuru divisions since last December.
KSDL manufactures 60 products
The 108-year-old KSDL, which is the only PSU in the country manufacturing products from sandalwood oil, churns out more than 60 products, including soaps, detergents and cosmetics.
To increase its production of sandalwood, KSDL has also acquired state-of-the-art machinery at a cost of around ₹26 crore and is all set to expand its production. Notably, only four to five kg of oil can be produced from about 100 tons of sandalwood. For a 25-year-old tree, farmers get ₹30,000 to ₹50,000, depending on its size and girth, with a kg of sandalwood sold at around ₹6,000.
Meanwhile, KSDL sources have said that the company has utilised only 7.12 acres of the 37.04 acres assigned to it in Bengaluru for sandalwood cultivation. While, in Mysuru, the company has used 24.15 acres out of 33.16 acres; and in Shimoga it has utilised only 11.03 acres out of the 25.09 acres for sandalwood cultivation so far, said KSDL sources.
The sandalwood tree is rare since it grows in only a few countries in the world. Sandalwood grows mostly in Australia, Malaysia, Indonesia and Sri Lanka, including India. Mostly grown in hilly areas and in the plains of Karnataka, this expensive wood is found in Chikkamagaluru, Hassan, Chamarajanagar, Mysuru, Shimoga, Belgaum, Uttara Kannada, Dharwad, Kolar and Chitradurga.
Business expansion
According to KSDL officials, the company recorded a turnover of over ₹1,500 crore as of March 2024. This is higher than the last financial year and represents a significant year-on-year increase of 14.25 per cent, amounting to ₹195 crore more than the previous turnover of ₹1,375 crore recorded in the fiscal year 2022-23.
To keep up with the times facing stiff competition from foreign brands, KSDL has launched 21 new products including Sandal Wave Deo Soap, shower gels, glycerin-based transparent bath bar and the super premium bath soap.
Dr Prashant pointed out that these new products, including the highly popular Mysore Sandal Millennium Gold, have boosted KSDL's business. The company is known for using pure sandalwood oil in soaps, he clarified. Mysore Sandal Wave Turmeric Soap made from high quality vegetable oil and natural turmeric, which has a minty fragrance, is also very much in demand.
KSDL has only a 2.5 per cent market share in the soap market, with 81 per cent of its sales coming from southern states.
To expand its business further, the minister of large and medium industries MB Patil wants to venture into north Indian states, admitted Dr Prashant.
Further, he said that KSDL is also improving facilities in the company's other two units Mysuru and Shimoga. "KSDL is contemplating setting up another unit but the location has not been finalised," Dr Prashant added.
Incidentally, KSDL has set a record by selling the highest number of Mysore Sandalwood soaps this year, surpassing its 40-year peak turnover, according to a June 10, 2024 report.
Century-old history
KSDL has a history dating back 108 years. In 1916, the Maharaja of Mysore, Nalwadi Krishnaraja Wodeyar, who once visited the forest department at Sankey Tank spotted stored pieces of sandalwood and had the idea to extract sandalwood oil from it. So, Sir M Visvesvaraya, who was the Diwan at that time, started the process of extracting sandalwood oil from a unit in Bangalore.
In 1918, Wodeyar opened a sandalwood oil factory at Aradanahalli (now Ashokapuram) in Mysore. The sandalwood oil factory, situated on an area of 36 acres, is still active even today producing sandalwood oil, incense sticks and incense.
There's a story behind why the state ventured into manufacturing sandalwood soaps.
In 1918, guests from France gifted Wodeyar with exquisitely scented soap. Surprisingly, these scented soaps were made from sandalwood oil produced in India itself. It was then Wodeyar decided that Mysore will make its own soap from sandalwood oil. As a result, Mysore Sandal soap was born. This soap reached the market in 1918 and is still in existence today.
It has managed to create a strong brand and is competing with the most advanced soap manufacturing companies in the world.
Karnataka's sandalwood policy
To further strengthen the state's relationship with sandalwood, Karnataka has recently implemented a sandalwood policy.
This policy is aimed at mitigating the troubles faced by the farmers in terms of protection of sandalwood trees, their harvesting and transportation.
This article was originally published in The Federal Karnataka.
