Mumbai to Grow Cosmetics Cluster

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 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%.

Herbal cosmetics generally are based on ayurvedic principles and contain natural ingredients or essential oils. They reportedly are growing at a faster pace and would be a major focus area in the new cluster. The SPV will help the manufacturing units to collect raw materials, make necessary technology upgrades, support in financial matters, skill development, improving storage conditions and test facilities and packaging quality, according to the report.

"The emerging demand of natural therapy in modern period and the need of personal health care in day-to-day life are the major growth factors of cosmetic and herbal cosmetic industry," said Ambhore in the report. "With our project, we are aiming to carry these micro-, small- and medium-scale units to grow better and the cluster is estimated to record a 300% growth in next three years."

This collaboration in India could be likened to the Cosmetic Valley cluster in France that touts 11 years running, including 16,000 direct jobs and 2.5 thousand million Euros. In fact, according to the Cosmetic Valley Web site, France is the leading exporter in the world in the perfumery and cosmetics industry.

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