Madagascar: the soap war rages on
Audio 01:29
Madagascar: soap noodles are at the heart of all tensions.
In the photo, locally made noodles, made from imported tallow and caustic soda, and Tulear salt.
© Sarah Tétaud
Text by: Sarah Tétaud Follow
4 min
In Madagascar, since 2011, manufacturers in the soap sector have been engaged in a bitter standoff over customs taxes. On the one hand, the local soap makers, who import raw materials taxed at 5% to then manufacture their soaps, on the island. On the other hand, their competitors, who also claim to be soap makers, import soap shavings called noodles. It is these nouns that are at the heart of the tensions. Since 2011, this material is no longer considered as a finished product taxed at 20% but as a semi-finished product, taxed at 10%. According to local soap makers, this reduction in customs taxes has created a competitiveness that is impossible to compete with. Since then, they have not ceased to demand a return to a 20% tax on noodles.A demand that could be satisfied if we are to believe the 2022 finance bill but which is already provoking the ire of importers of noodles,
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from our correspondent in Madagascar,
At each parliamentary re-entry since 2011, soap manufacturers set out again on a crusade so that imported soap noodles are again considered as a finished product in the eyes of customs and therefore more heavily taxed.
“
As long as these imports are favored by low taxes, we local soap producers will never be competitive
.
For Thierry Ramaroson, Managing Director of Savonnerie Tropicale, it is indeed difficult to compete.
Its soap, made locally, is sold 60% more expensive than that made from imported noodles.
Faced with this formidable competition, in ten years, its production has fallen by more than half.
“
The consequence is that we are blocked at the level of our production volumes: our soaps, because they are more expensive, have more difficulty in selling on the market. However, an industry, as its name suggests, must make volume. The more volume an industry produces, the lower its cost price and the more this can have repercussions on its selling price. If it is low, it will be within the reach of the low purchasing power of Malagasy consumers. The current situation plays into the hands of foreign soap factories in Indonesia and Malaysia, which continue to operate at full speed. And that clearly, for us, is the relocation of know-how and employment, whereas we could produce everything here locally.
"
The Malagasy customs have just decided to adhere to the Harmonized System, an international nomenclature specific to customs which considers soap shavings as finished products. Something to cheer up the soap makers but to upset the dozen of noodles processing industrialists, like Salim Dramsy, manager of the Seim soap factory. “
I don't understand the administration. Powdered milk is considered a semi-finished product, flat jars are considered a semi-finished product, plastic noodles are considered a semi-finished product. So why aren't soap noodles considered the same? It's purely competitive. They want to eliminate us.
"
“
The argument that has always been put forward by these pseudo soap makers,
thwarts Thierry Ramaroson,
is to say that these soap nubs are not soap.
Now this is the deception.
The proof, when we wash our hands with these soap shavings, it produces exactly the same effect as if we washed our hands with soap.
So we have to stop pretending that we are a soap maker when we are already importing soap,
”he insists.
Soap made from animal oil
Agreement between the two camps seems impossible.
Bond transformers alone own 65% of the Malagasy soap market.
Their competitiveness, they owe it to imports.
Out of the question to buy their chips locally.
►
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"
I don't want to sell soap made from animal oil
(the noodles made by Savonnerie Tropicale are made from bovid tallow), warns Mr. Dramsy.
Besides, they wouldn't be able to produce the quality we want, the white noodles.
Finally, they don't produce enough for themselves, they have to import too!
"
Salim Dramsy and his colleagues hope for the cancellation of this new taxation, as in 2019 and are increasing communications in this direction.
In the event of inflexibility on the part of parliamentarians, the latter warns: "
it's simple, if nothing changes, we will close our processing plants to directly import the boxes of finished bar soap sold by the Comesa countries
( Common Market of Eastern and Southern Africa, Editor's note)
whose customs duty is 0%!
"
A fight against a background of economic patriotism and for which the outcome should be known within a few weeks.
►
See also
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