Mumbai: Nirma, famous for its Nirma washing powder, a brand with a robust value for money image, seems to be trying to don a more upmarket garb. The Rs 2,500-crore Ahmedabad-based soaps and detergents major is making tentative efforts to enter the premium end of the market.

Recently Nirma signed a licensing agreement with the multinational firm Procter and Gamble Home Products to manufacture, market and distribute the soap brand Camay in India (See: 'Nirma will now manufacture and market Camay for India').

Nirma will use the trademark of Camay for a rolling period of five years and will give royalty payments to P&G. The licence agreement was made through Nirma's subsidiary, Nirma Consumer Care.

Says Nirma Consumer Care chairman and managing director Hiren K Patel: ''This agreement marks the advent of Nirma into the premium segment of the soap industry. Nirma is looking to broaden its products portfolio with a view to lowering dependence on the increasingly competitive and stagnating washing soaps and detergents market.''

In keeping with its premium image, Camay will be priced at Rs 13 for a 100gm pack. Though this is lower than the price of competing soaps such as International Lux (at Rs 15 per 75 grams), Dove (Rs 35 for 100 grams) and Pears (Rs 19.50 for 75 grams), it must be remembered that it is an introductory price.

Also the company aims to position Camay as a skincare product which Patel says gives it a broader perspective than limiting it to the bath soap segment and will also open another product category for the company viz personal care.

Camay, launched by P&G earlier, did not really set the market on fire but Patel is hopeful of things being different this time. ''The company will position Camay in such a way that all aspects of pricing, distribution and marketing will be taken care of.''

Nirma currently enjoys 20-per cent market share in the toilet soap industry under its brands Nirma and Nima. The company plans to introduce a couple of line extensions in the industry every year.

Another business the company is said to be looking at is the foods market, particularly the branded staple foods segment. It made an entry into the foods market two years ago with Nirma Shudh Salt.

Nirma has been taking a beating in volumes during the past two years. In its annual report for 2001-02, the company has clearly stated that it faced pressures due to erosion in the market size, de-growth in its products and stiff competition from domestic companies and imports. While the detergent market shrunk 9 per cent in volume terms last year, the toilet soap segment recorded a decline of 12 per cent in value terms.

During 2001-02, Nirma's sales dropped by 6 per cent to Rs 2,276 crore while its net profit was lower due to the deferred tax at Rs 185.6 crore. For the first quarter ended June 2002, the gross sales were 4 per cent higher, at Rs 621 crore, but the net profit was down to Rs 45.4 crore.

It is also facing severe competitive pressures from innumerable low-priced detergents such as Friendly Wash, Ghari Detergent Powder, other unbranded players and the old enemy Hindustan Lever, which is bettering Nirma at the price-competitive strategy for more volumes game.

Market analysts say Nirma's problems are one of brand image and name. Nirma's brand image is that of a low-priced product and maybe low quality as well. This has come in the way of the company getting into the high end of the market.

Secondly, the brand name Nirma is strongly associated with washing detergent powder and hasn't worked wonders with other products that it has introduced into the market. For instance, Nirma Shudh Salt, launched a couple of years back, achieved a turnover of Rs 16 crore in 2001-02 as against Kunwar Ajay Sarees's Dandi Namak, which, launched later, has already become a Rs 100-crore brand.

It does seem finally that Nirma has realised that name does matter, and Camay may just be its entry vehicle into the premium market.