The encyclopedia · Strategy & Leadership · Strategic decision · 2015–2025
Mysore Sandal Soap ran out of sandalwood — a century-old brand operating at 25% capacity
KSDL, maker of the iconic Mysore Sandal Soap since 1918, ran out of sandalwood. Production dropped to 25% of capacity. A century-old brand running on reserves.
Karnataka Soaps and Detergents Limited (KSDL) · 2024
What happened
Karnataka Soaps and Detergents Limited (KSDL) was founded in 1916 as the Government Sandalwood Oil Factory, one of the world's oldest producers of sandalwood oil. In 1918 it launched the Mysore Sandal Soap, a product so iconic that it held a Geographical Indication tag and was synonymous with Indian fragrance for over a century. The company was a government-owned monopoly with access to the sandalwood forests of Karnataka — the world's largest natural source of Santalum album.
By the 2010s, that supply was collapsing. Sandalwood poaching in Karnataka's forests had reached epidemic levels. The government's forest department, which was supposed to protect the trees, had neither the manpower nor the will to stop organized poaching gangs. The state's sandalwood regeneration programme had been neglected for decades. KSDL, which had depended on government forest auctions for its raw material, saw its supply of sandalwood dwindle to a trickle.
The impact was severe. KSDL's production dropped to just 25% of its manufacturing capacity. The company was forced to buy sandalwood on the open market at inflated prices and even began importing from other countries — a humiliating reversal for a company built on Karnataka's native sandalwood. The Mysore Sandal Soap, once a daily-use product in Indian households, became harder to find on store shelves. The brand, which had never needed to market itself, found that its core customer base was over 40 and younger consumers were choosing other brands.
By 2024, KSDL was a company running on fumes. The century-old brand that had once defined Indian fragrance was operating at a fraction of its potential, its survival dependent on a government that had allowed the sandalwood forests to be poached nearly empty.
Why it happened
- KSDL's entire business model depended on a single raw material — Mysore sandalwood — and the company made no effort to secure alternative sources or invest in captive plantations.
- The Karnataka forest department failed to protect sandalwood trees from poaching, and the state's sandalwood regeneration programme was neglected for decades, leaving KSDL without supply.
- KSDL, as a government monopoly, never developed the capability to compete in the open market for raw materials — when the government supply dried up, the company had no procurement infrastructure.
- The brand's century-old positioning as a traditional Indian product failed to attract younger consumers, who chose modern brands over a soap associated with their parents.
The lesson
A monopoly on a natural resource is not a strategy. When the trees ran out, the company had nothing — no plantations, no alternative suppliers, and no brand that worked without the sandalwood.
Aftermath
KSDL continues to operate at reduced capacity, procuring sandalwood from the open market and importing from other countries. The Karnataka government has announced plans to expand sandalwood plantation, but the trees take 15–25 years to mature. The brand's long-term survival remains uncertain.
Sources
- Mysore Sandal Soap — Wikipedia
- Karnataka Soaps and Detergents Limited — Wikipedia
- The Hindu — The scent of Mysore Sandal to come all the way from Down Under (sandalwood oil production drop from 4,068 kg to 719 kg, KSDL importing from Australia)
- New Indian Express — Australia now exports sandalwood oil to Karnataka as state's farm-grown yield quality decline (Oct 2025, KSDL imports 5,000 kg annually)
spotted an error? The club wants to know.
More like this
Axe dominated India's deodorant market — then Fogg's pump spray killed it
AI fashion stylist startup Allē shut down after six pivots and no product-market fit
MotoGP's Indian round: one race in 2023, then three straight cancellations
Somewhere, someone solved the problem this company failed at. 2nd Opinion →

Comments · 0
Sign in to join the comments.