Gujarat: Sanitizer demand fades, 90% of units stop production

AHMEDABAD: With the Covid situation easing, demand for hand sanitizer has fallen significantly and around 90% of manufacturers in the state have stopped production. Demand for hand sanitizer had exploded with the outbreak of Covid and manufacturers in the state started producing on a large scale catapulting Gujarat as the biggest producer in the country.
Data from the Gujarat Food and Drugs Control Administration (FDCA) shows that in December 2020, the state had 742 manufacturers of hand sanitizer with daily production as high as 2 crore litres. Now, industry estimates show that around 90% have stopped making the product.
H G Koshia, commissioner of the Gujarat FDCA, said, “Immediately after the Covid outbreak, we eased the rules to ensure the state could manufacture enough hand sanitizer. We set up a system for quick licences. By December 2020, we had 742 manufacturers and daily production was more than 2 crore litres. Gujarat was the biggest producer in the country. However, with demand reducing, majority units have stopped production. They can still keep their licences for five years.”
Shrenik Shah, chairman of the Gujarat state chapter of the Indian Drug Manufacturers’ Association (IDMA), said demand for hand sanitizer is very low. “Around 90% of units which started manufacturing sanitizer after Covid broke out have stopped production citing low demand and stiff competition. Only organized players engaged in hand sanitizers pre-Covid continue to manufacture it."
Gujarat-based companies started manufacturing sanitizer immediately after Covid broke out because demand was very high and supply was limited. Kamlesh Patel, chairman of Westcoast Pharma said, “We started producing hand sanitizer immediately after Covid began in India. We had a daily capacity of 10,000 litres and used it fully initially. However, there is no demand after the second wave. There is also stiff competition and margins are very low. We have thus stopped manufacturing sanitizer.”
MSME players who ventured into making hand sanitizer have also stopped production due to weak demand. Jayesh Pandya, director of Nikol Formulations Pvt Ltd, said, “We got a licence to manufacture sanitizer in July 2020 and had a turnover of around Rs 3 crore in that product. However, demand fell and we stopped manufacturing it in November.”