Covid-19: Hand sanitiser turns money-spinner, UP earns Rs 100 cr in revenue

Delhi, Maharashtra, Rajasthan, West Bengal, Haryana and Uttarakhand are among the states accounting for highest procurement of hand sanitiser from UP
Amid the global scramble for developing an effective protection against Covid-19, hand sanitiser has become an unlikely money-spinner for Uttar Pradesh during the pandemic.

According to UP excise department additional chief secretary Sanjay R Bhoosreddy, the state has so far earned more than Rs 100 crore in revenues from the manufacture of hand sanitiser, including Rs 15.63 lakh as denaturation fees, Rs 5.86 crore as license fee and Rs 95 crore under the goods and services tax (GST) head.

Compared to a single unit earlier, currently there are 91 operational hand sanitiser plants in UP, catering to the state and other markets in India as well, including far off destinations viz. Ladakh, Nagaland, Kerala etc.

Against the annual mop up of about Rs 2 crore from a single unit last year, the revenue has already jumped more than 50 times so far and counting.

Now, the state hand sanitiser units have started getting trade enquiries from foreign countries as well, which promises higher collections in the coming months.

Rising to the challenge of speedily ramping up the production of hand sanitiser to protect against coronavirus infection, the private sector companies, including sugar mills, took an early lead in setting up facilities even as the Yogi Adityanath government expedited the issuance of necessary clearances.

So far, nearly 12 million litres (ML) of hand sanitiser has been manufactured in UP, of which about 7 ML and 5 ML has been supplied within and outside the state respectively.

“Earlier, the state only earned about Rs 2 crore from the production and distribution of sanitiser produced by a single unit,” Bhoosreddy informed adding the industry now employs more than 1,600 people. “The hand sanitiser segment has now become a permanent industry in UP, since the demand for the product is expected to persist going forward.”

On the instruction of Chief Minister Adityanath to boost the production of sanitiser in UP in wake of the pandemic, 91 FL-41 licenses were issued to sugar mills, distilleries and drug license units established in the state.

Of the nearly 7 ML litres supplied within UP, about 250,000 litres were supplied to the government organisations and government hospitals through the respective District Magistrates.

The different states, which have been supplied sanitiser consignments by the UP based units include Assam, Andhra Pradesh, Bihar, Chhattisgarh, Delhi, Gujarat, Goa, Haryana, Himachal Pradesh, Jammu and Kashmir, Jharkhand, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Nagaland, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttarakhand, West Bengal, Mizoram and Ladakh.

Delhi, Maharashtra, Rajasthan, West Bengal, Haryana and Uttarakhand are among the states accounting for highest procurement of hand sanitiser from UP.

As per the notification of the union ministry of food, consumer affairs and public distribution dated March 21, 2020, the retail price of 200 ml pack of hand sanitiser should not exceed Rs 100. Similarly, according to the June 18, 2020 directive, the price for government department and state supported health related utilities shall not be more than Rs 85 and Rs 95 per litre for sanitiser containing 70 per cent and 80 per cent of alcohol respectively, conforming to the WHO standards, for a minimum of 5 litre pack, inclusive of all taxes.

While, some sugar mills are manufacturing bulk quantities of hand sanitiser themselves or supplying to other firms for bottling and marketing, a few others have signed contracts to supply ethanol/ethyl alcohol/extra neutral alcohol (ENA) to external plants.

Although, sanitisers are generally manufactured with isopropyl alcohol (IPA), they have been found effective if made from ethanol/ethyl alcohol/ENA, which are sugar byproducts.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel