Mumbai to Grow Cosmetics Cluster

Posted: June 20, 2007

The Small Industries Service Institute (SISI), under the central Ministry of Small Scale Industry, reports it has planned a three-year project to develop a cosmetic and herbal cosmetic cluster at Mumbai. The institute has submitted the project and is expected to receive official consent from the ministry within one month, according to reports.

Clusters, according to the SIS Web site, are sectoral and geographical concentrations of enterprises, in particular Small and Medium Enterprises (SME), faced with common opportunities and threats that can: give rise to external economies (e.g., specialized suppliers of raw materials, components and machinery and sector-specific skills); favor the emergence of specialized technical, administrative and financial services; and create a conducive ground for the development of inter-firm cooperation and specialization, as well as of cooperation among public and private local institutions to promote local production, innovation and collective learning. SISI estimates that clusters have contributed up to 60% of India's manufactured exports.

SISI, in collaboration with the All India Small Scale Cosmetic Manufacturers Association (AISSCMA), will create a special purpose vehicle (SPV) to initiate the cluster project in an existing cosmetic industrial area of 75 km, including Vasai and Western Suburbs, Mumbai.

"The cosmetic industry, especially the herbal industry has a tremendous market potential, which is yet not covered by the current supply," said G.M. Ambhore, director, SISI, in a Pharmabiz.com report. "India continues to be the second largest exporter of the herbal cosmetics to the world market after China. Our effort is to enable the small scale companies to grab the opportunity including exports market," added Ambhore.

The institute prepared the project report with the help of Maharashtra Food and Drug Administration (FDA) and Basic Chemicals, Pharmaceuticals and Cosmetics Export Promotion Council (Chemexcil). SISI reports that the growth of cosmetic market globally is currently recorded as 8.2% while the cosmetic and toiletries market in India is at an annual growth rate of 15.20%.