Fri. Mar 29th, 2024
Indian Fragrances and Flavours Industry Fears Losing its Ground to China

365telugu.com,online news,Hyderabad, May13th, 2020: They are an essential part of our daily life, right from the toothpaste or soap up to condoms, every day we use them from morning to night in most of food we consume like bread, biscuits, or medicines, and the cosmetics and toiletries we use. Their presence is felt through their flavour and fragrance than the product itself. Unless, they are used in food, cakes, biscuits, chocolates, ice-creams, or even the soaps, detergents, creams, lotions, and the countless items we consume or use, these items cannot be sold in the markets. Therefore, they are the critical supplements and these aromatic ingredients called fragrances and flavours. They can mask, provide, enhance, and accentuate the taste or smell in whichever product they are added. However, the Indian Fragrances and Flavours industry is currently suffering heavily due to the extended lock down in the country. Their supply chains are completely disrupted, and the production has been badly hit due to the pandemic Corona Virus spread across India.

The Indian fragrances and flavours industry is considered one of the fastest growing industries globally and a significant competitor to China in terms of exports. However, due to the temporary lock down in the country, the Indian industry is fearing to lose its ground to China as the latter is currently operating in full swing while we are still in the lock down. Speaking on the occasion, Mr. Rishabh Kothari, President, Fragrances & Flavours Association of India (FAFAI) said, “Our palette is very large. We are one of the biggest exporters and importers of ingredients. Due to the prevailing logistics issues in the country, as inter-state transportation is either restricted or difficult, there is a substantial impact on our industry. If the situation is not improved quickly, there will be a huge economic cost for us. China will benefit from the situation as we may lose some of our global customers to the neighbouring country which will result in a significant business loss and market share for us”.

According to Mr. Rishabh Kothari, amidst the pandemic it is difficult to accurately estimate the total quantum of losses, but he feels that production has been hit to an extent of 80% and exports and imports too have been similarly impacted. The growth of the industry, which was growing at over 10%, is likely to become negative both due to the lockdown during the pandemic and the consequent likely drop in demand for consumer products and processed foods in the rest of the year. Although the fragrance and flavours products are treated in the essential category, as almost all products in the food processing industry as well as hygiene and cleaning products like sanitizers and hand-wash use them for providing better colour, taste and smell, the production and supply of products are currently disrupted due to the ongoing lock down. Fragrances and flavours are used in food, pharma, detergents, condoms, shampoos, soap, paste, agarbattis, perfumes, deodorants and many more. According to the Ministry of Micro, Small and Medium Enterprises, Government of India, the Indian Fragrances and Flavours industry size is estimated at around $500 million which is growing at 11% per annum while the global fragrance and flavour industry is valued at $24 billion. With its rich diversity of flora and fauna, Indian fragrances and flavours industry is projected to grow exponentially in the coming years due to increasing demand for personal care products, brand awareness, growing demand from the middle class due to rising disposable incomes and products now being available at affordable price points.

Considered as an ancillary industry to FMCG and Food Processing and Pharma industries, the Indian fragrances and flavours industry is well distributed across the country. There are over 1,000 small, medium and large size enterprises operating in this industry – which is in the form of organized and un-organized sector. As significant part of the ingredients come from extracts of natural plants while the bulk is aroma chemicals and synthetics which are used in this industry. As almost all the food, pharma, FMCG industries are dependent on fragrances and flavours, it is imperative to resume the operations of units involved in production of these products.

“It will take another 4-6 weeks to resume our operations completely even after the lock down is lifted. Supply of manpower will again become a major problem as most of them have gone to their native places. Hence, the government should bail out the industry by announcing an appropriate fiscal stimulus package which will stimulate demand rather than only a 3 month moratorium which favours the banks than the enterprises. Otherwise, the industry will acutely suffer apart from losing its competitive advantage in the global markets”, Mr. Kothari added.

Globally, there are about 300 key natural fragrant raw materials in which about 50% are cultivated and the rest are collected from the wild habitations. Out of the cultivated raw materials only 110 widely used which account for about 95% of the global fragrance oil production. With about 31 key raw materials, India has made the significant impact in global fragrance oil markets by producing essential oils of menthol mint, sandal wood, jasmine, tuberose, and spices. Similarly, there are more than 1,000 synthetic aromatic molecules or ingredients of which around 250 constitute more than 90% of global aroma chemical production. A large majority of these are manufactured as well as exported from India to key international markets making India a key player in global fragrance supply chain.