The cosmetics and cosmeceutical industry depends largely on contract manufacturing for their production requirements. The scope of operations of this industry space is expanding with increase in demand of both high volume cosmetics and skin/hair care products and small pouch & trial-sized/travel packages, which is expected to be worth 1.5 lakh crores by 2025 in value.
The greatest challenge of the contract manufacturers is to build infrastructure that can address growth in both these markets. Increasing cost of transportation, raw materials and more stringent regulations are the stumbling blocks in the way of running a large manufacturing facility. Besides, technological upgradation of these plants is also necessary to align with the market trends.
While many operators find it challenging to keep the prices of their offerings competitive while increasing investments, Clarion Cosmetics has been able to successfully keep their operations efficient through the years. The company’s journey began as a contract manufacturer of talcum powder and it currently caters to about 9 different product ranges.
According to the company’s Director Nataraj Lakshmanan, “The Beauty & Personal Care industry is pegged for a CAGR of 5% in ’21-‘23. The increasing use of beauty care products, lifestyle changes, improved purchasing power and a growing preference for specialized and advanced skin care products, are all helping boost growth in this industry.”
Addressing all forms of market demand
The cosmetics and skin care market is divided into two segments. One is the e-commerce segment with premium skin care, hair care, colour cosmetics and make-up products that require high-end products in small volumes of 5000 to 15000 pieces per month. Another is the physical retail segment selling skin and hair care products at high volume. The volume manufactured annually for both segments, is more than 80000 tons in all of Clarion’s units put together. Clarion has developed the capacity and capability that is able to address the demand from both segments which is its USP. Besides being effective in offering large product range, Clarion brings about innovation with the help of its expert technology and manufacturing teams, helping improve production line throughput and overall manufacturing efficiency. This is a major factor that enables it to put a competitive price to their products.
While dealing with their clients, Clarion provides certain advantages as mentioned by Nataraj, “We are very flexible and are able to deliver fast implementation times when coming up with new projects and product launches. The clients expect us to be ready with solutions to resolve problems and meet project timelines.” Nataraj also says trust is an important factor in contract manufacturing sector. He adds, “In order to maintain trust, we not only employ the highest Safety and Quality standards, but also remain committed to all ethical and statutory compliances while delivering turnkey solutions from concept to implementation; right from developing formulations with our in-house R&D to the manufacturing, commercial scaling, filling and packaging. Our manufacturing units are also agile to meet the lower volume requirements of e-commerce companies.”
The beauty & personal care industry is pegged for a cagr of 5% in ’21-‘23. The increasing use of beauty care products, lifestyle changes, improved purchasing power and a growing preference for specialized and advanced skin care products, are all helping boost growth in this industry
Since its inception, Clarion has implemented several innovative strategies like joint ventures, that has helped it to offer cutting-edge technology to their customers for products like nail enamels. Investing in latest technology and R&D also produces a turnaround value for the company allowing them to offer a wide range of products starting from shampoos, creams, lotions and shower gels to Ayurvedic creams, pain balms and kitchen hygiene products.
Future Expansion Plans
The company has achieved 38% growth over the last five years and has very ambitious future goals. Nataraj says, “We would like to become a leader in the contract manufacturing space in India delivering high quality products at very competitive prices. In five years, we see Clarion at the forefront of high value, low volume manufacturing, on the strength of our R&D, Innovation and Manufacturing expertise.” Clarion is also striving to become a formidable player in the Guest Amenities space with premium product offerings.
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