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    INDIAN SALT INDUSTRY IS GOING GLOBAL: AN OVERVIEW

    India ranks third in the production of salt in the world next to USA andChina. The Average annual production is about 20.31 million tones againstthe average annual world production of 240-250 million tones. Worldwideabout 25 million tones of salt are used for edible purposes and rest is usedfor non-edible and industrial purpose.

    Salt Production Worldwide

    Huge consumptionThe world wide salt production is currently 200 million tons and exceedingthe mark rapidly. The worldwide industries manufacture this huge quantity

    of salt not only for consumption but for non-edible and industrial purpose aswell.

    Ways of extractionAlmost sixty percentage of salt production in the whole world goes to theindustrial usage. Only the remaining forty percent is used for miscellaneouspurposes that major constitutes the application in the form of foodadditives. When you talk about the worldwide salt production, it ismandatory to know the different ways that the salt is obtained all over theglobe.

    Prima facie, evaporation of sea water to obtain salts is the method carriedout in majority parts of the Asian subcontinents. Especially in the India andchina, the salt production is done in this ways and they obtain almost 99.5percentage of purity still. The salts produced this ways are being washedagain chemically to remove the impurities and then it is shipped.

    Different parts of the globeThere are still other forms of obtaining salts as well. Even in India and

    china you could find some of these different forms of extracting salt. One isthrough mining process. This is salt extraction from the salt bedsunderneath the earth. Such a sort of salts is then allowed to be prepared inthe laboratories to be modified to the form of fine granules as we see thetable salt.

    Salts obtained in this way are in majority from the United States of America

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    as well as other European continents. Their purity levels are a bigchallenge though. They are not competent to the great purity levelsobtained as one gets from the salts of India and china. 99.5 to 99.7 is therange of purity that could be obtained from these salts of the west. Most ofthem find applications only in the industries.

    It could be evident by now that almost all of those fine graded salts are justthe western brand names carrying eastern salt inside. Anyhow, there is onemore variety of salt obtained from the brine. This is called as solutionmining process. This is almost one third of the total salt production methodsin the world.

    All those salts extracted from the Australia and Mexico is essentially of thiskind of manufacturing. The level of purity that is obtained is of the highest

    grade when you compare with the other forms of salt extraction. The purityrange varies somewhere in between to the second decimals of 99.9. Itdepends from place to place from the set standards of production processcarried out.

    Industrial applicationsSometimes it is also about the raw salt content which is obtained from aparticular place. There are certain traces of impurities at micro levels whichare just integral part of the salt itself and it could not be removed even afterso many sophisticated processes and techniques employed. Worldwidesalt production for industrial applications includes the organic synthesis,petroleum production, byproducts fractional distillation and many moreprocesses.

    Salt Industry in India

    India is the third largest Salt producing Country in the World after Chinaand USA with Global annual production being about 230 million tones. Theproduction of salt during 1947 was 1.9 million tones which has increased

    tenfold to record 20 million tones during 2005.

    In a very short period of time sufficiency was achieved (in 1953) and madea dent in the export market. Since then, the country has never resorted toimports. Exports touched an all time high of 1.6 million in the year 2001.

    The per-capita consumption of salt in the country is estimated at about 12

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    kg, which includes edible as well as industrial salt. The current annualrequirement of salt in the country is estimated to be 60 lakhs tones forindustrial use. Caustic soda, soda ash, chlorine etc., are the major salt-based industries. Besides about 15 lakhs tones of salt is exported everyyear.

    Sea salt constitutes about 70% of the total salt production in the country.Salt manufacturing activities are carried out in the coastal states of Gujarat,Tamil Nadu, Andhra Pradesh, Maharashtra, Karnataka, Orissa, WestBengal Goa and hinter land State of Rajasthan. Among these States onlyGujarat, Tamil Nadu and Rajasthan produces salt surplus to theirrequirement. These three states produce about 70%, 15% and 12%respectively of the total salt produced in the country and cater to therequirement of all the salt deficit and non-salt producing states.

    Private sector plays a dominant role contributing over 95% of the saltproduction, while the public sector contributes about 2-3%. The co-operative sector contributes about 8% whereas the small-scale sector (lessthan 10 acres) accounts for nearly 40% of the total salt production in thecountry.

    op Brands of Salt in India

    Tata salt Captain cook i-shakthi Aashirvadh Annapurna Surya salt Sambhar salt Nirma shudh and many more

    Salt Works and Acreage under Salt ProductionThere are about 10107 salt works, mostly in small sector engaged in theproduction of salt. The total area under salt production is about 5.0 lakhsacres. The salt manufacturing activities provide direct employment to aboutone-lakh persons per day.

    Distribution of Salt

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    Railways play an important role in transporting salt from three surplusstates to the entire length and breadth of the country. On an average, 55%of edible salt is transported by rail from production centers. The remainingquantity moves by road and waterway.

    odized SaltWith a view to ensure universal access of iodized salt for the preventionand control of goiter and other iodine deficiency disorders in the country,Salt Commissioner's Office has been identified as the nodal agency forcreation of adequate salt iodization capacity, its distribution and qualitymonitoring at production centers, under NIDDCP. Salt Department hasgranted permission to more than 878 salt iodized units with an annualinstalled capacity of 112 lakh tones so far.

    ExportsExport of common salt and iodized salt is permitted under Open GeneralLicense (O.G.L.). Salt is exported manly to Japan, Philippines, Indonesia,Malaysia, Nepal, and Bhutan etc. India has, for the first time, exported32,500 tonnes of common salt to the US during December 2002, creating ahistory of sorts.

    Liberalization and Simplification of ProcedureFollowing amendments to Central Excise and Salt Act, 1944 in 1996, de-licensing the salt industry and Salt Cess Rules, 1964 in 2001 andintroducing self-removal procedure (SRP) instead of permit system forpayment of cess and removal of salt from salt factories, several registershave been discontinued or re-organized.

    Sources of Salt

    The main sources of salt in India are

    Sea brine Lake brine Sub-soil brine and Rock salt deposits

    Major Salt Producing Centers

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    Sea water is an inexhaustible source of salt. Salt production along thecoast is limited by weather and soil conditions. The major salt producingcenters are

    Marine Salt works along the coast of Gujarat (Jamnagar,Mithapur,Jhakhar, Chira, Bhavnagar, Rajula, Dahej, Gandhidham,Kandla, Maliya, Lavanpur),

    Tamil Nadu (Tuticorin, Vedaranyam, Covelong), Andhra Pradesh (Chinnaganjam, Iskapalli, Krishnapatnam, Kakinada

    & Naupada), Maharashtra(Bhandup, Bhayandar, Palghar), Orissa (Ganjam, Sumadi) and West Bengal (Contai)

    Inland Salt Works in Rajasthan using lake brine and sub-soil brineviz. Sambhar Lake, Nawa, Rajas, Kuchhaman, Sujangarh andPhalodi

    Salt works in Rann of Kutch using sub-soil brine viz: Kharaghoda,Dhrangadhra; Santalpur

    Rock Salt Deposits at Mandi in the State of Himachal Pradesh

    Profile & Status of Salt Industry

    There are about 13000 salt manufacturers engaged in production ofCommon salt in an extent of about 5.50 lakh acres in the Country. It isestimated that 90 per cent of the total number of salt manufacturers aresmall salt producers (having an individual extent of less than 10 acres forsalt manufacture), 5.5% is large scale producers (having an individualextent of more than 100 acres) and 4.5 % is medium scale producers(having an individual extent between 10 and 100 acres).

    Average Annual Production of Salt in India is 176 lakh tones whereas ever

    high production of 199 lakh tones was recorded during 2005 followed by181 lakh tonnes during 2006. Gujarat, Tamil Nadu and Rajasthan aresurplus Salt producing States accounting for about 96 per cent of theCountrys production. Gujarat contributes 76 per cent to the totalproduction, followed by Tamil Nadu (12 %) and Rajasthan (8%). The rest4% production comes from Andhra Pradesh, Maharashtra, Orissa,Karnataka, West Bengal, Goa, Himachal Pradesh, Diu & Daman. On an

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    average 62% of the total production is from large salt producers followed bysmall scale producers (36%) and rest by medium scale producers.

    The average annual supplies of salt for human consumption is about 57lakh tonnes and that for industrial consumption is about 83 lakh tones; 57%of the salt for human consumption moves by rail and 43% by road. 89% ofthe salt for industrial consumption moves by road, 7% by rail and 4% bycoastal shipment to various industries; when the total indigenous suppliesis taken, 69% moves by road, 27% moves by rail and 3% by sea.

    India exports surplus production of salt to the tune of about 25 lakh tonneson an average; during the year 2005, a record export of 38 lakh tonnes wasachieved primarily due to surge of demand from China. Other majorcountries importing salt from India are Japan, Bangladesh, Indonesia,

    South Korea, North Korea, Malaysia, U.A.E., Vietnam, etc.

    Government of India has adopted the strategy of Universal Salt Iodizationand Consumption for elimination of Iodine Deficiency Disorders (IDD) in thecountry under the National Iodine Deficiency Disorders Control Program(NIDDCP). Iodine is supplemented in the diet through Iodized Salt forcombating IDD. The Program was started in 1962 initially confining toGoiter endemic areas but after 1984 it was implemented throughout thecountry. Thus, as on date, a significant progress has been made onUniversal Salt Iodization. The country produces about 50 lakh tones ofIodized salt and about 49 lakh tones of iodized salt is supplied for humanconsumption against the requirement of about 54 lakh tones for entirepopulation. The country has created more than adequate salt iodizationcapacity of over 110 lakh tones.

    Salt Industry is labor intensive in the country. About 1.4 lakh laborers areemployed daily in the Salt Industry, on an average. Salt CommissionersOrganisation has put in place a number of Labor Welfare Schemesameliorating the working and living conditions of salt laborers.

    Government of Indias Role in Development of Salt Industry

    Salt is a Central subject in the Constitution of India and appears as itemNo.58 of the Union List of the 7th Schedule, which reads:

    a) Manufacture, Supply and Distribution of Salt by Union Agencies; and

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    b) Regulation and control of manufacture, supply and distribution of salt byother agencies.

    Central Government is responsible for controlling all aspects of the SaltIndustry. Salt Commissioners Organisation, an attached Office under theMinistry of Commerce & Industry (Department of Industrial Policy &Promotion), Government of India, is entrusted with the above task.

    Government of India has de-licensed Salt Industry by deleting provisionsrelating to Salt in the Central Excise & Salt Act, 1944 vide Finance Bill of1996-97. In line with Government of Indias Policy of Liberalization andsimplification of Procedures, the Salt Cess Rules, 1964, have beenamended vide Notification No.GSR 639(E) dated 04.09.2001. SaltCommissioners Organisation plays a facilitating role in overall growth and

    development of Salt Industry in the country.

    The thrust of the Salt Commissioners Organisation currently is on thefollowing:

    Technological Development and Quality Improvement Salt Iodization Program for combating Iodine Deficiency Disorders Infrastructure Development promoting Salt Industry Labor Welfare Schemes for Salt Workers particularly housing under

    NAMAK MAZDOOR AWAS YOJNA Export of Salt

    Indian Salt Industry - Present Status

    The Salt Department is under the Ministry of Commerce and Industry andis headed by The Salt Commissioner of India. The duty on salt wasabolished from 1st April 1947. For administrative purposes, the 5 Regionsviz. Gujarat Region, Chennai Region, Mumbai Region, Kolkata Region,

    Rajasthan Region, implement the policies of the Salt Department. Thereare salt department laboratories in all regions to help salt manufacturers tomaintain quality of salt. At state level, the development of industry andwelfare of salt workers is being looked after by Industry Commissioner ateand labor department.

    The Indian Salt Manufacturers Association is an apex body of Indian salt

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    manufacturers. There is Central Salt and Marine Chemicals researchInstitute at Bhavnagar in Gujarat. Their main function is to help saltindustry through their research work. This institute was established in 1956.In addition to R & D work the institute provides training courses for saltmanufacturers for salt production & quality. Majority of salt works are stillhaving manual operations, but large salt works are going formechanization.

    Edible Salt

    Indian salt industry is meeting the challenge of supplying iodized salt toentire country. The production of iodized salt is now more than 5.0 milliontons as against the total requirement of 6 million tons of edible salt. Thereare 900 iodization plants the usual process of iodization adopted is spray

    method with a capacity of 16 million tons per annum. There are 42 saltrefineries with a total capacity of 3.76 million tons per annum located in thestates of Gujarat, Tamil Nadu, Uttar Pradesh and Rajasthan. In addition toabove there are two giant vacuum salt plants of capacity one million tons.Other varieties of edible salt consumed in India are Iron Fortified Salt,Double Forfeited Salt. A new product Health Salt Containingmicronutrients iodine, iron, folic acid, was also come up near Chennai inTamil Nadu.

    Salt based Industry

    There are four giant Soda Ash factories in India. Total production of SodaAsh is about 2.5 million tons per annum and in addition there are largenumbers of Caustic Soda & Chlorine industries in India. The Salt basedIndustry is concentrated more in Gujarat. Total Salt consumption forIndustries is 6.5 million tons annum.

    The New Chemicals Industries are coming up and existing units are goingfor major expansions; growth is at 8%.

    India is a net exporter of Soda Ash and emerging as a significant regionalplayer. The current low per capita Soda Ash consumption also showstremendous growth potential over next few years. Unlike to world averageof 56% consumption of Soda Ash by the glass industry, the Indian glassindustry only consumes 25%. The major share is used by Indian detergentsindustry.

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    Soda Ash uses in glass & detergents is 65% Glass industry estimated to grow @ 7% and Detergent @ 4.5% over

    the next 4 years Tightness in the global demand-supply situation expected There is good opportunity to increase export Low per capita consumption leaves a lot of potential to be tapped Despite the steep drop in duty rates over the years, the industry has

    been able to effectively compete with imports and is geared up forfurther reductions.

    Growth of Soda Ash and Salt industry directly connected hence goodgrowth in salt demand is expected.

    Indian salt industry is going global

    Salt production of India is 18 to 20 million tons per annum and India is thethird largest salt manufacturer of the World, after China & USA. Out of thisabout 3.5 million tons salt is washed in mechanized washing plants and upgraded to international standard having purity 99.5% for Chlor-Alkaliindustry. The major quantity of washed salt is exported to Quatar, Japanand other countries and consumed by Indian chlor-alkali industry. Thewashing plants are increasing day by day and quality is also improving veryfast.

    About 218020 Hectares land is under salt production

    In last five years more than 15 Salt Washing plants have come up tomeet requirement for high purity salt.

    Now few Salt Works are fully mechanized with washing plants andthey have achieved the following quality-

    i) Sodium Chloride (NaCl) % 96.50 - 97.50 ( on wet basis)ii) Moisture (H2O) % 01.50 - 03.00ii) Calcium (Ca) % 00.03 - 00.05iv) Magnesium (Mg) % 00.02 - 00.03v) Sulphate(So4) % 00.10 - 00.15vi) Insolubles % 00.01 - 00.03

    The price of above salt, having purity 99.5%, after taking intoconsideration washing losses, stevedoring and other logisticexpenses with marginal profit is about 15 to 16 USD per ton on FOBT

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    basis. At present this quality salt is available in limited quantity butavailability is increasing very fast as more and more washing plantsare coming up in India.

    Salt export may see uptrend this season

    (http://articles.economictimes.indiatimes.com/2011-12-08/news/30490364_1_salt-production-salt-prices-salt-export)

    According to news article of Economic Times on 8th Dec. 2011, Saltproduction has started in the Kutch belt of Gujarat and the Sambhar-Phalodi belts in Rajasthan. Export orders are expected to increase withdemand coming from China and South Asian countries. Salt prices

    increased post-Japanese tsunami earlier this year and have been stablesince then.

    Salt production in Rajasthan is in full swing. By mid-December, theproduction will begin from Covelong, Marakanam, Cuddalore, Vedaranyam,Tuticorin and Nagercoil in Tamil Nadu along with Andhra Pradesh'sNaupada to Isakapalli. By January, the production will begin from southGujarat (Kambhat to Surat) and Palghar, Rai, Wadala centres ofMaharashtra," said BC Raval, secretary, Indian Salt Manufacturers

    Association.

    Flooding, un-seasonal rains, foggy weather in China and Australia haveensured the demand picking up from Japan, Bangladesh, Nepal, Vietnam,Indonesia and Malaysia for the industrial salt. Exports in this calendar year(till date) have touched 3.8 million tonne and expected to cross 4.3 milliontonne by December-end. On an average, India exports 2.5 million tonnesalt.

    Salt production in India is to the tune of about 19-20 million tonne per

    annum, of which Gujarat produces 70%. In the domestic market, over 5.5-6million tonne is used by the edible salt industry, 8.5 million tonne is used bythe chlor-alkali industry (which mainly produces caustic soda, chlorine andsoda ash) and over 2 million tonne in the water softening and tanningindustry.

    Export contracts were signed at $35-40 a tonne. Raw salt prices are

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    currently ruling higher by Rs 100 to Rs 150 than the previous year's Rs600-800 a tonne. In the retail, refined iodized salt was selling at Rs 1,200 toRs 1,800 a tonne, depending on the brand and packaging, compared to Rs1,000 to Rs 1,200 a tonne at the beginning of the year. India's edible saltmarket is 5.5-6 million tonne with branded salt market accounting for 1.3million tonne. With a market share of 64% in the branded salt market, TataSalt is the leading player, followed by Hindustan Unilever's Annapurna,Nirma's Shudh Salt and ITC's Aashirvaad Salt. On the backdrop of abalanced supply and demand, the prices are supposed to remain stable.Exports will be the real game changer in the coming days.

    The largest producer of caustic soda in India, Gujarat Alkalies & Chemicals(GACL), expects salt prices to increase if pre-winter rain lashes across thestate. "We are annually experiencing pre-winter rain showers, which delay

    production and increase prices by 15-20%. If there is no shower till March,the industry won't have to worry," said an official from GACL. All majorplayers like GACL, Indian Rayon, Gujarat Fluorochemicals are on anexpansion mode. By 2014, GACL will increase caustic soda production by300 tonne per day from the current production of 1,100-1,150 tonne perday.

    Potential for the Growth of Salt Industry

    India has very long coast line and out of that Gujarat Coast line is of1600 Kms

    In Gujarat in addition to existing salt industry lot of Land availablealong the side of coast for developing more salt works.

    Climatic conditions are suitable for salt industry. Easy Availability of skilled labors Good Administration of our Govt. and their Corporation. Our low cost of production Government support for critical infrastructure facilities.

    Minor Ports have loading capacity 5000 tons /day to 20000 tons /dayin mid stream loading where as big port like Kandla have achievedthe av. rate of loading of 25000 tons / day. We have a big advantagethat ships of the capacity from 5000 tons to 100,000 tons could beloaded at our ports. There is potential for developing more ports asper requirement. In south India there is also a big port, Tuticorin closeto salt manufacturing area.

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    Now only 20% industries have gone for mechanization andmodernization, 50% from balance can also go immediately.

    Average yield of salt works is only 100 tons per hectare. This can beincreased to 300 tons per annum by adopting modernization.

    Opportunities

    Export Market- 1) Quatar 2) Malaysia 3) Philippines 4) Japan 5)China 6) Vietnam 7) Indonesia 8) Nepal

    Indias location is very suitable to supply salt to China, Japan, MiddleEast and to other Asian countries.

    India has potential to increase productivity as well as quality. Available manpower.

    Wind Power-largest coastal line of Gujarat has potential to Generate5000 MW through Wind Energy. The Salt Industry can make use ofthis energy jointly through associations.

    Availability of good major and minor ports as well as of good anchorpoints.

    To grab the developing market of Middle East.

    Conclusions

    Indias salt production can be increased considerably by achievingaverage yield of 300 tons per hectare and by developing availablelarge areas in Gujarat.

    Salt quality required to be improved in general in all sectors small andbig to feed good quality salt to Indian Chlor-Alkali Industries as wellas for export.

    Salt Industry has very good future hence new entrepreneurs shouldgrab this opportunity.

    Marketing strategy of tata salt

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    Branding is new process mantra for Tata Chemicals in turning thiscommodity entity into a FMCG major, says Russell Foulds

    Tata Chemicals Limited (TCL) has been in the business of inorganicchemicals and fertilisers for over 60 years but it is only of late that this Rs-1,500-crore-plus company has ventured to transform itself from a traditionalmanufacturing company to a very market-oriented one. And the recentrelaunch of its well-established Tata Salt coupled with this product hittingtop position in the ET Brand Equity Survey as the Most Trusted Brand thisyear has reinforced the view that Tata Chemicals has turned market-savvyand is on the way to becoming more of a brand than a mere commodity inthe near future. Prasad Menon, managing director of the company, toldDeccan Herald that manufacturing industries in India have moved from aprotected market to a competitive market and in that context understanding

    customer needs and meeting expectations has to become a clear focus.

    The question being asked is whether the runaway success of Tata Saltwould prompt the company to turn soda ash and fertilisers also intobranded products. "Commodity branding is definitely engaging ourattention. Already our cement and urea products are being marketed underthe Shudh brand and we are evaluating other options," MrMenon said.

    Fertiliser divisionIn the fertiliser area, TCL's urea plant at Babrala in UP has a capacity of

    7.42 lakh tonnes per annum, constituting 12 per cent of the total privatesector production and is considered one of the world's most efficientfertiliser manufacturing facilities. The plant is located close to the highconsuming northern belt in the Gangetic plain, which constitutes 48 percent of aggregate domestic demand and accounts for 88 per cent of thecompany's total urea sales. But with the drought in evidence here, itremains to be seen what effect this would have on future production andsales.

    The company is expanding its distribution network of agri-service initiativescalled Tata Kisan Kendras that will serve as a platform for brand-building,greater penetration and optimal distribution, and once the sector isderegulated TCL will greatly benefit from this move.

    Marketing strategyExplaining the company's marketing strategy for salt and its two other core

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    products namely soda ash and fertilisers, Mr Menon revealed that thecompany's salt business has undergone a complete revamp of itsmarketing and distribution structure.

    A dedicated sales team on FMCG lines has been set up to manage the saltbusiness and with the objective of offering an alternative to the price-conscious housewife, a second brand of salt under the name Samundarhas been test-marketed and proved successful with commercial launchoptions under consideration.

    He said that in the area of soda ash, Tata Chemicals is aggressivelytargeting new customers and while strengthening its field-force, efforts areon to render the product globally competitive. The organisation itself isbeing restructured along key account management practices. However,

    urea is still a controlled commodity and future marketing strategies woulddepend on the long-term policy on fertilisers. But he acknowledged that thecompetition for soda ash is from within the country and also from without.

    And while the company has launced a programme to make its soda ashglobally competitive, TCL will proactively enhance Tata Salt's valueproposition and further consolidate its leadership position.

    Salt businessSalt is manufactured at the company's integrated Mithapur complex with3.5 lakh tonnes of vacuum-evaporated salt coming out each year along

    with 33,000 tonnes of caustic soda and 180 tonnes of bromine andbromine-based compounds. Every month 28 million 1kg packs of Tata Saltare produced at Mithapur.

    While TCL's MD is delighted at Tata Salt's numero uno status on the brandlist, its vice-president (sales and marketing) Kapil Mehan, is very positiveabout the outlook for Tata Salt.

    According to him, Tata Salt has been a pioneer, a leader for long in thiscategory and always regarded well by the key consumer the housewife.But as to why this brand is way down at number 25 in south India, MrMehan confirmed that the company was aggressively expanding its stockistbase there from 220 at the start of this fiscal year to 280 at present.

    New distributors are being appointed and it is investing in channelassociates. For example, it has organised specialised training programmeson sales, marketing, enterprise management and brand-building for its

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    distributors and their sales force. There are reward and reorganisationprogrammes. Product availability is being put in place and the company isalso undertaking mass media advertisements in the south zone which isexpected to increase awareness and brand pull. These ads are of coursetargeted at that specific audience and in the language of that region. Thisyear will see TCL spend about Rs10crore on advertising between the TataSalt and Samundar brands.

    Mr Mehan noted that Tata Salt leads the way as first mover and leader inthe branded iodised salt market. It has a 17-per-cent market share in thebranded salt category and among national brands, its share is higher at 38per cent. The marketing strategy would be to continue expanding reachand availability of the product while improving the market base. It willcontinue upgrading users of unbranded, unhygienic loose salt and continue

    to improve product and packaging offerings to the consumer. He affirmedsocial responsibility and brand commitment and to this end has launchedthe Desh Ko Arpan programme where 10 paise on each pack of Tata Saltsold in a month would go to CRY.

    An average of three crore Tata Salt packs are sold each month. Mr Mehansaid advertising for the product largely revolved around the televisionmedium with Doordarshan forming the dominant chunk of its media plangiven it still has the highest reach especially in areas like UP, MP and Biharwhere vast numbers of consumers are unbranded and loose salt users.

    He nevertheless is confident that though the market is competitive withmultinationals and Indian firms alike pumping money into messaging theconsumer, Tata Salt will continue to lead as long as it reaches out andmakes itself available. The company always has a ear to the ground to bein touch with the consumer's needs.

    Export marketAccording to Mr Mehan, Tata Salt is being targeted at the Middle East andBangladesh as far as exports go and he thinks that today's salt market isvery dynamic with the consumer constantly evolving. Market variables keepchanging, a retail revolution is slowly descending on us and globalisationhas its effects even on a humble product on the kitchen table called salt.

    There can be no one formula that any player can stick to - in keeping withchanging market needs strategies will also keep on changing.

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    FinancialsPrasad Menon said that operations for TCL during 2001-2002 wereaffected due to a power plant fire at its Mithapur chemicals complex, whichresulted in lower production and turnover during the first quarter. During2000-2001, there was a one-time profit on sale of investments of Rs 220crore against nil in the succeeding year. But despite these factors, the profitbefore tax for 2001-2002 at Rs 200 crore was higher by Rs 14 crore overthe previous year. The profit after tax was nevertheless lower over theprevious year since the company had to make provision for deferredtaxation of Rs 34 crore. But during the first quarter of the current yearended June, 2002 it posted a net profit of Rs 34.01 crore against a netprofit of Rs 13.19 crore in the corresponding period of the previous yeareven as its total income went up to Rs 369.88 crore from Rs 295.17 crore.

    During 2001-2002, TCL showed a decline in performance with a marginalfall in sales to Rs 1481.32 crore against Rs 1502.14 crore in the previousyear. But that was due to the first at its Mithapur plant. Since thenoperations have stabilised. The year also saw a substantial reduction ininterest costs through a combination of debt reprofiling and debt reductioninitiatives.

    The current market price of around Rs 55 discounts the latest earnings byroughly 10 times. The company has shown a good dividend yield of around9 per cent and has Rs 556 crore of investments in its books. Mr Menon

    denied that the company had plans to enter the branded foods business ina big way and went on to stress the importance of its distributors andsupply chain partners. These are vital partners in taking our product to theconsumer, he said, adding that with this in perspective, TCL recentlyconducted customised training programmes to enhance the competenciesin its channel partners.

    He disclosed that TCL is pursing a number of initiatives to consolidate anddrive growth in its core businesses. These initiatives aim to build on the

    organisation's inherent manufacturing strengths to drive sustainable andprofitable growth and become globally competitive. They includerestructuring the marketing function, becoming more customer-focused andimproving operational efficiencies by aggressively cutting costs andstreamlining supply chain management. As part of its quality initiative, TCLhas also decided to focus on all activities at the micro-level and create aperformance-oriented company.

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    Quality initiativesIt has therefore adopted the Tata Business Excellence Model (TBEM)which has a holistic approach to improving business processes unlike otherquality initiatives. TBEM has helped the management identify cost-cutting,human resources development and developing marketing strategy as threecritical areas for overhaul. As part of the cost-optimisation and revenue-enhancement strategy, it has started the Manthan programme to intensifyperformance improvement across all business divisions. This is expected tomake the soda ash business globally competitive.

    Analysts maintain that though TCL accounts for around 42 per cent of thecountry's soda ash capacity at 8.75 lakh tonnes per annum and is one ofthe largest producers of synthetic soda ash in the world not to forget itsprime position as producer of industrial and edible salt with a domestic

    market share of close to 40 per cent, the company has been somewhataffected by problems in the soda ash business. Last year, the import dutyon soda ash was reduced from 38.5 per cent to 20 per cent while there wasalso an additional capacity created through Nirma, a one-time customerturned competitor.

    And price increases by key global players namely the US, China andKenya led to a rise in landed and domestic prices in India. But to counterimport threats, TCL is looking at improving efficiencies and aims to becomethe lowest cost synthetic soda ash producer by next year. Salt has become

    an important product and TCL produces 3.5 lakh tonnes of vacuum-evaporated salt each year.

    As market leader, the company decided to make this business an FMCGone and it has gone on to revamp its marketing team and structure toincorporate the strengths of and FMCG company. Its 29 distributors and 24supply chain partners will help it achieve a greater and direct marketpenetration while increasing market efficiency. Tata Salt is set to become aglobal brand and will be first introduced to countries where the Indian

    population is high and then across the globe. Salt will play an increasinglyimportant role in the turnover of TCL especially given its rising marketshare and product promotional activity.

    Mr Mehan is certain the conversion from unbranded to branded salt willpick up pace. The distribution and logistics will always be a challenge for abulk and low-priced product like salt, he says, but the company will

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    continue to maintain its leadership position in this category. Mr Menon isalso confident of the future with regard to Tata Salt and the company as awhole.

    A specialised marketing team incorporating skills like brand managementand advertising and with the relevant experience in marketing anddistribution is in place to nurture the marketing and promotion of the saltbusiness. "Though growth will be marginal during the current year,marketing and advertising will be critical inputs in our future operations todifferentiate our brand and retain our leadership position in all corebusinesses of the company." The mood is positively upbeat at TataChemicals.

    Marketing practice

    Tata salt is India's first branded salt. The story of this brand is interestingbecause the brand came as bye product. Tata salt was launched in 1983.

    Tata Chemicals has their largest integrated chemicalplant in Mithapur. The soda ash plant needed fresh water for their boilers.Hence to supply fresh water, the company started purifying sea water and itcreated high quality salt as a bye product in the process. This coincidedwith the government campaign with the support of UNICEF for promotingIodised salt since iodine deficiency was a serious issue haunting thechildren's health.This environment gave birth of one of the super brands and a classic caseof branding a commodity in the Indian market.

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    The Indian salt market is estimated to be around Rs 1 Billion. The market isdominated by unbranded players. Tata salt have a market share of around40% in the branded segment and 18% in the total market. The product saltis a low involvement and low value product with little scope ofdifferentiation. Tata salt had the first mover advantage and was able toconsolidate its position in the market thorough brand building.

    1990 saw organised players eyeing the market. Captain Cook salt waslaunched in the market taking the " free flowing " feature as a differentiatingfactor. 1996 saw HLL extending its Annapurna brand to salts andpositioning its brand on the platform of health and iodine content. 2001 sawthe high profile launch of Dandi salt from Kunwar Ajay sari fame.Still 70%of the market is dominated by unbranded players.

    Tata salt started its life positioning on the rational platform of purity. Sincethe corporate brand had the value of Trust engrossed in Indian consumer'smind, Tata salt was eagerly owned by the consumers. One of the major

    factors that accelerated the growth of branded salt andTata salt was the effective campaign by the government to promote iodisedsalt. The campaign penetrated the market to as deep as 20% and the firstmover Tata Salt benefited most out of it.

    2002 saw the repositioning of Tata Salt on the platform of emotion. Thebrand owners felt that they should rise above the rational differentiation andtry to emotionally influence the consumers. Hence Tata salt adopted itsnew tagline " Desh ka namak" translated " Salt of the nation". The brand istrying to associate itself to the nationalistic feeling of the consumers and istrying to fill a passion towards the brand. It is a herculean task for a brandthat is in a category which is low involvement and low priced. To createinvolvement in such a category will be a tough task . But the campaign has

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    raised the brand to new heights in terms of market share. Since customersusually are brand loyal and tend to use the same brand of salt every time (convenience factor) , such high decibel campaigns helps in strong brandrecall.

    But the long term view of this category is challenging because the scope ofdifferentiation has not been sustainable. There has not been any seriousproduct development these years and this can recommoditise thecategory.The brand owners may have to think about value additions in themarketing mix to capture the 70% of unbranded segment.

    Desh ka namak Tata Salt unveils new brandpositioning Tata Chemicals to champion social causeswith the launch of the Desh ko arpan programme

    Tata Chemicals Ltd, the pioneers and undisputedleaders in the packaged salt category today unveiled

    Desh ka namak, its new brand positioning andadvertising campaign for Tata Salt. A paradigm shiftfrom the rational (right brain) advertising approach tothe category, the Desh ka namakplatform will seeTata Salt take an emotional (left brain) platform, whichhas the potential to be a big category clutter-breaker.

    Unveiling the new positioning platform, Kapil Mehan,vice president, sales and marketing, Tata Chemicals,said, "Although advertising for the salt category in

    India has traditionally focused on detailing thefunctional properties of the various brands, Tata Salt,as the category leader, is best equipped to take on thebroader and more fundamental emotional aspectsassociated with salt.

    "The new positioning juxtaposes the pungency of the

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    product itself against the honesty and integrity ofordinary Indians, reinforcing the brands leadershipposition, both in the marketplace and in the minds ofIndian consumers. All of which reiterates the brandscommitment to millions of Indians."

    With the intrinsic equity and strength needed toshoulder such an emotional platform, Tata Salt hasreaffirmed its leadership position by changing thecategory paradigm of health and taste. While Tata Salthas thus far been positioned on the rational aspects of'purity', its new positioning places this very propositionwithin the larger context of the consumers life,encompassing both rational and emotional

    manifestations of purity.

    Over the past year, Tata Chemicals has put in place astrong brand management, marketing and sales team.The effective marketing initiatives are being backed onground, by a team of large clearing and forwardingagents (CFA) and distributors, with a focus to servicethe market in an enhanced manner and ensuregreater market penetration.

    Coinciding with the launch of its new marketing thrustfor Tata Salt, Tata Chemicals has also unveiled theDesh ko arpanprogramme, that is committed tochampion socially relevant causes for under-privilegedchildren. Through the Desh ko arpanprogramme,Tata Chemicals Ltd. will contribute 10 paise for everykilo of Tata Salt sold, to a worthy cause.

    On the basis of the current monthly sales of nearly300 million packs, the monthly contribution isexpected to be in the region of Rs 30 lakh. Child Reliefand You (CRY), the trust that works forunderprivileged Indian children, has been chosen asthe beneficiary for this maiden effort.

    The money raised will support 6 child development

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    initiatives across the country, touching the lives ofover 12,000 children. Announcing this special initiativefrom the company, Kapil Mehan said, "Our newadvertising platform and the Desh ko arpancampaignhave strong synergies and the common belief in thepower of ordinary individuals to make a difference.

    "More importantly, Desh ko arpanprovides millions ofIndians, who are buyers of Tata Salt, a genuineopportunity to make a contribution that will transformthe lives of underprivileged children across India."Commenting on the launch of the programme, IngridSrinath, director, resource mobilisation, CRY, said,"We are proud to be associated with Tata Chemicals.

    "The relationship is a live example of how corporatesand development organisations can work together tochange the lives of our most vulnerable citizens ourchildren." Established in 1939, Tata ChemicalsLimited is one of India's leading manufacturers ofinorganic chemicals and fertilisers.

    Part of the Rs 400-billion (US$ 9billion) Tata Group,the company owns and operates the largest and most

    integrated inorganic chemical complex in the countryat Mithapur, Gujarat. The fertiliser complex in Babrala,Uttar Pradesh, is known for its world-class energyefficiency standards, and has won several awards inthe fields of environmental conservation, communitydevelopment and safety.

    Tata Chemicals is today widely acknowledged as theleader in the chemicals and fertiliser industries. Thecompany has a turnover of about Rs1500 crore andemploys about 3000 personnel.

    Tata Chemicals plans to target 40-50 per centshare of voice during the campaign.

    In the first phase, the new TVCs to be launchedacross all major channels.

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    The new campaign will be aired in 6 languages.

    The new positioning of Tata SaltLaunched in August 1983, Tata Salt was the firstnational brand of packaged salt to be marketed inIndia. To millions of Indian housewives, it presented awelcome move away from the loose, unbranded saltof suspect quality to the reassurance of clean, puresalt guaranteed by Indias most trusted businesshouse.

    As consumer acceptance of Tata Salt grew, so did theattractiveness of the category to potentialmanufacturers, both large and small. The last 19

    years have seen the launch of scores of new brandsof packaged, iodised salt, including over half a dozennational brands. However, today Tata Salt continuesto be the undisputed leader in the category.

    Tata Salts historical positioning as the 'pure salt' isrooted in the fact that it is manufactured using thevacuum evaporation technique, which renders its end-product much purer than the more commonly usedrefining technique of washing the salt with water and

    adding some more chemicals.

    For the Indian consumer, the reputation of the Tataname was an equally strong certification of theproducts quality. Furthermore, the proof of purity layin their experience of a distinctly 'saltier salt', relativeto those offered by other brands. All of this translatedto a superior value proposition for the consumer, anda dominant market share for the brand.