EP223. How a Mumbai factory is setting new eco-design standards in cosmetic manufacturing

Whenever we think about beauty, we typically think about the botanical ingredients that we include in our formulations, probably picturing big beautiful fields of sunflowers and roses and lavender. Or we think about the products themselves being formulated by experts with their scientific equipment. Or we think about the way that formulations are used by shoppers such as you or I on our bathroom shelves. What we don't tend to think about is where the products are actually made. We don't picture big factories or manufacturing plants. We don't think about all the water and energy used to create a facial serum. We don't think about the waste streams generated by manufacturing literally billions of products worldwide. And yet these big facilities, they exist everywhere and they're instrumental to the beauty industry. You most likely wouldn't have the majority of your beauty products if they hadn't been made somewhere in a factory. Unless you exclusively buy from indie brands that manufacture themselves in their home labs. But are cosmetic manufacturing facilities thinking about sustainability? How do they manage their water and electricity usage? What do they do about their waste streams? How do these big facilities operate? Well, to find out, I invited a member of the Formula Botanica community and founder of a contract manufacturing facility in India to join me for this episode. Listen in as I speak with Nishit Dea and we ask ourselves the question, how can the beauty industry manufacture sustainably? Welcome to Green Beauty Conversations in which I challenge the beauty industry to become more sustainable, champion, independent and green beauty, and encourage you to join me in changing the beauty industry for the better. I'm your host, Lorraine Dallmeyer. I'm a chartered environmentalist, biologist and the CEO of award winning online organic cosmetic formulation school Formula Botanica. We have tens of thousands of students in over 190 countries around the world who study with us to become organic beauty formulators and entrepreneurs. Visit our website@formulabotanica.com to try our free online formulation course. And if you want to be the first person to know what's happening in green beauty, make sure you subscribe to this podcast in your favorite podcast app. So in today's episode, I'm joined by Nishit Dadia, the founder and Managing Director of Kane Cosmeceuticals Private Limited, a new age green contract manufacturer based in Mumbai in India, Cane is one of India's largest contract manufacturers. With its facility encompassing 140,000 square feet and over 20 manufacturing lines ranging from soap to skincare to hair care to makeup, Cane is also changing the way that manufacturing is looked at as part of the sustainable supply chain because they are the first contract manufacturer to operate an Eco design certified manufacturing factory building which is a zero effluent discharge facility. Caine Cosmeceuticals is also an equal opportunity provider with 51% of women in the workforce across all verticals. And they have their own in house development team that has over 4,000 stable formulations. Hi Nishid, how are you doing today?

Hi Lorraine. I'm good, how are you doing?

I am good and I'm really interested in what we're going to talk about today. So I'm really pleased you're on the podcast with me. Let's get started. Could you please introduce your company to me? What do you do?

So my company is Kane Cosaceuticals. We are based in Mumbai and we are predominantly into product development and manufacturing. We started like right before COVID and in 2020 and now we operate a 140,000 square feet green manufacturing building where we are manufacturing wide variety of products right from skin care, hair care to color cosmetics like your makeup, makeup products. We operate around 20 manufacturing lines here.

Wow, sounds like a really big undertaking and I'm really interested to dive into how it all works and what it looks like and what you've created there. But before we go down that route, why did you start Cane cosmeceuticals? What is your big mission?

So the reason we started this was when like so my co founder and I, we are batchmates from the same university and he has a skincare brand where he had around 500 products. But those products he was manufacturing all over the country with at least 15 different manufacturers and even though they are more or less the same products, like he had different variants of shampoos like creams, moisturizers, he was facing challenges when it comes to them not understanding what he wants exactly. To issues consistency of quality, to issues in unavailability of resources and then substitution of the raw materials and stuff like that which was impacting his quality. So when I got a chance to go around the country with him to visit these manufacturers, till that time I am a pharmacist by the way. So till that time I had only seen pharmaceutical facilities. So for me quality had a very high standard or a high parameter. After seeing that to seeing cosmetic facilities even in India or around the world, we found that there's a very big gap. And given the fact that now cosmetics were starting to penetrate the skin with cosmeceuticals there is virtually no difference between a pharmaceutical cream or a cosmeceutical cream. Because both of them are penetrating the skin. So we realized that this sort of product needs to be manufactured in a very, very good infrastructure based facility. And at the same time, it has to be sustainable. If you're starting anything today, if we are manufacturing, we can claim everything from natural resources to organic ingredients. But the fact of the matter is no one is looking at the facility where it's been manufactured. So I can have green ingredients, but if my facility is not green, if the place where it's been manufactured pollutes or is underpaying wages or is not doing the right thing when it comes to fair trade or manufacturing, that that just absorbs everything which I have been doing before that. And that is predominantly why here at Kean, we have, we are an equal opportunity provider. We do 51% of our workforce is our women, and it's predominantly run by women. And at the same time, we're a zero affluent discharge facility. So these were some of the core guidelines we started with that this is something we want to do. And we're very happy that we are doing that right now.

Amazing. So picking up on something you just said, you said you were traveling around India and you could see a real gap between what you expected and what you saw. Like, what would you expect from a contract manufacturing facility and what were you seeing out there? Can you describe that a bit for me?

So, like, again, from a pharmaceutical standpoint, India is really good. Like, we export globally to the world. We are known as the pharmacy of the world, for that matter. And when we see the pharmaceutical facilities here, there are proper procedures in place. There is absolute, like, clean infrastructure, very, very well trained documentation, good workforce, good clean machines, good procedures to set that up as well. And the main part there is the fact that we have very, very clear batch manufacturing records where you have everything from your ingredient to the supplier and none of that changes. So that ensures a sustained quality. All raw materials are tested, every packing material is tested, and you have a good documentation practice that leads to your consistent quality. So I'm used to that. When I saw a cosmetic manufacturer, they're like, okay, we don't have shea butter from this vendor. Can we just get it from this vendor instead? We don't have vitamin E from this vendor. We can just buy from that vendor instead. So the understanding of what an ingredient impacts, like what an ingredients impact is to the product is something which is not understood very well. And the next thing which I found very interesting was the use of water. So water predominantly makes up around 60% of most of the products up to 80% also. So here we have a purified water plant. Every pharma company, pharmaceutical company has a purified water plant generally. But cosmetics people generally just use distilled water or they are purchasing DM water or like deionized water from other sources. Now what happens is the main consistency of the cream will change if the water changes because of the huge amount of water. So that is again something which I found which was not. Which was missing in a lot of places. They were doing RO and something like that. But it was not impacting the. It was not ensuring that the water is consistent throughout the year and that was impacting the product quality. We've seen creams with the same ingredients being a little more, what do you say? Viscous. Because just because the TDS in water has gone up, the total dissolved solids in water has gone up. So it's just, it makes a very big difference.

That is fascinating to hear and fascinating how you're bringing your pharmaceutical background to really sort of create this high tech, amazing quality manufacturing plant. So you said that you do product development as well as contract manufacturing. What sort of split do you have in the business?

So our till today, even right now, my biggest area of investment, of course after the facility and machines is our formulation development. We have 12 member team right now with people with a cumulative experience of over, I think 65, 70 years of experience in this industry and from a wide range from right from like a makeup brand to an ayurvedic brand which is like really good as well to most of the multinational companies which are operating in India. So what that does is that will ensure us to give a very consistent formulation development support to all the brands from the business that we do. We like to focus our business to places where we can do formulation development and manufacturing because we want to be more of a support partner to the brand rather than just be a manufacturer. We are more often on a partnership basis with our clients. So they are also very happy to work with us because they get to see something new and they get to develop something new as well.

I totally get it. Well, that's a wonderful one stop shop for many different brands before we dive into a little bit more about the facility and how you guys work. How popular is natural beauty in India? Because I know you guys focus a lot on natural ingredients as well. Is it predominantly natural ingredients you work with?

Yes, I think right now it's not possible for us to launch a single product without having at least one or two really nice natural ingredients. So Natural ingredients. Of course, even throughout the years it's been really popular in India because of Ayurveda as a very big part of it. You can like, it's very rare for a cream to not have any natural ingredients on the like on the main display of the packaging without like showcasing. Okay. It's enriched with either jojoba oil or like aloe vera or something like that. It's just an essential part. But yes, now we are getting more and more into the good thing we see is we are getting into more and more natural based actives and not just like a claim based like aloe vera, but like aloe vera extract which is 500x powder of aloe vera, something like that. The beauty is people are now talking about efficacy. So even with natural ingredients they are looking for a better efficacy product. So that is a really good trend which is happening in India right now.

Well, yes, and we're seeing this all over the world of course as well. And on that note, what, what kind of beauty brands do you work with? Are they predominantly only in India or do you work with companies all over the world? How does that work?

So we work with brands all over the world. We have certain clients who are only distributing in India we have certain clients who are distributing in India and the Middle east or Africa and certain brands who are predominantly only exporting to north and South America, Europe and the uk. So those are all your reach compliant products that we manufacture as well. That is something we do as well.

And do you set minimum order quantities for the companies that you work with?

Yes, we do. So depending on the complexity of the product and also the product itself, we have different minimum order quantities for different products and of course based on the region as well. For example, if it's Europe then we have good like we have predominantly a low minimum order quantity because the brands also deal with lower volumes but higher like better products in terms of higher cost of the products as well.

So what sort of MOQs do you set for different companies?

So predominantly we would say we do even a thousand units for a lot of things. We the reason we started like one of the reasons like by gain is the way it is. We call it a curve. We call it the curve of manufacturing. We have everything right from a 20 kg manufacturing vessel to up to 2000 kgs. When a brand or a startup is starting their brand or they're just launching it, they don't need those higher inventory backloads. They need a good consistent supplier who can support them with a good quantity. Which they can sell in the market and then maybe come back to reorder so that they are easy on their own finances as well. So that's why we set it up in a way that if, Even if it's 20kgs, we can make 20kgs and the day that picks up, we can make your next 300kgs and 500 and 1000kgs and 2000 and then multiples of that. So it's like a perfect ecosystem for any of the brands to scale up.

Yes, and that's what brands need, of course, as well. It's interesting because I was talking to one of our graduates the other day who was saying, you know, she was scaling up so much she couldn't quite keep up. And I was like, it's time to move to a contract manufacturing facility. You just can't keep churning out tens of thousands of units. So I suppose at that point they also need to continue to scale up with you. Take me a picture of the facility. You said 140,000 square feet. That's, that's big. How many people work there? How many units are you producing? Give us a, give us a flavor of what, what you've built there.

So currently we are there around 160 people working at the facility. And it's spread across four floors. We have the ground level, which has our admin and quality testing lab, which is, which also includes our microbiology lab, along with two production blocks, one which is taking care of our pharmaceutical products, one is for our ayurvedic products. And then on the fourth floor, which is another 33,000 square feet, we have our cosmetic blocks and also our color cosmetic blocks where we're doing foundations, lipsticks, mascaras, eyeliners, that sort of stuff. Then on the second floor is what we call the lungs of the plant, where we have our air handling units, 51 of them, which is powering each and every different manufacturing and filling area to prevent cross contamination. And our raw material stores after that. On the third floor we have a 30,000 square feet bare open space which has all the utility connections and electrical panels and everything. But we've not started any manufacturing unit there. We are actually in talks with brands for dedicated lines where we are making lines as per their running products where they want like huge volumes and a very, very specifically designed machine that's basically that. And I wish I can just put a picture up for you right now because the factory does not look like a factory because it's a certified green building. So we have a lot of glass on our facade, which ensures there's a natural light coming in to the space. So everyone who works with us, they can see whether it's day or night, whether it's raining or it's sunny outside. It's a lot more of a happy place than just a enclosed manufacturing facility. In terms of units, we have around 22 manufacturing lines now and 24 filling lines. Packaging, like a packing capacity, goes to around 500 million units per annum across three shifts.

Wow. That is an enormous amount of product. Wow. I'm finding it hard to picture it, but it sounds like an absolutely huge undertaking. Now the one thing I really want to dive into a little bit in a bit more detail is the way that you've created this building from an eco perspective. That sounds fascinating. So were you involved in the actual design of the building and creating it from the ground upwards and how has it been created from this eco design perspective?

So before I started this thing, I was just a pharmacist. Now that the building is done, I have become a little bit of a contractor, a little bit of an architect, a little bit of a design, interior design, all of it. Because this, it was very difficult to explain to the develop like the building contractors to understand or even the architect to tell them what we want. So we had a team of consultants who were, who helped us design the factory layout as per the pharmaceutical norms, the statutory requirements, stuff like that. And then we had a. The architect who was designing the main factory. But both of them are not used to what we wanted. So we had to ensure there is a compatibility amongst the entire things and that ended up with me physically drawing what I want to someone making it in a AutoCAD software and then ensuring that happens. But yes, the key thing for us was the ecological standpoint. The place for the factory is we are surrounded by agricultural land. So we were very, very keen when we started that we don't want to pollute by any issue whatsoever. We don't want to pollute anything around us. So even when we, when we were studying what lead means or what Indian, what green building means, we ensured that any sort of pollution, like any sort of ecological damage, not just pollution, ecological damage should not happen because of our facility. So we have, like I said, 30,000 square feet to dig it all up. You need a big space to keep all the soil as well. So one of the strong parts was we don't want to use outside soil to fill up our facility and also not remove the soil and displace it elsewhere. So we made the building in two parts. When we were digging it up, we had one part which is dug up to fill up the other one and the other one which is dug up to sort of level it. That was the thing which was constructed with we. The entire building is made with zero red, zero clay bricks. So we don't use clay bricks which is a very standard. The red bricks which we use, which is very standard in India, we don't use that because that is made from fertile soil. So that leads to ecological damage. So we're using all concrete blocks at the facility. Every last like sort of damage which you could avoid to the ecologic, to the environment around us. We did that. We had a natural drain which was coming in which was like going, taking the water from a mountain nearby out to the land. We designed it and we ensured that it's still there. It ends up being a very nice free flowing river which just passes by our factory. Of course we have two rainwater harvesting pits. So both our entire factory, everything that we, all the rain that we get on top of the building goes right into the recharge pits. So to give you a perspective in terms of water because that's a very key resource for us here, when we started we had a water level of around 450ft below the ground. And now when we are operating this factory, even after, like after the year of, we have monsoons from June to September. So even in May, which is like the worst level water level it can be, it never goes below 360. So we are very happy to know that even after taking up, maybe take up the groundwater source and we give it back at the end of the day the water level has come up. So of the entire area. So what that happens is we have to a farmer which has a land around say 400 meters from our factory, another factory which is 300 meters away. Both of them never had a groundwater source till last year. And now they do because they couldn't, they couldn't drill it. They went, they were drilling at as far as 400ft but they couldn't get water. And now because it's upwards of 400, they got water at 350, 360ft. So they also got access to water. So that is something which we are very proud of. Plus we didn't displace a single tree. We ended up growing a lot more trees. We have a lot of space around the factory, but we don't have any lawns. We don't have like big green lawns. We just have like almost like a mini jungle where we're just planting more and more trees because they give something back to the environment rather than just a lawn, which is taking up a lot of water and not giving any ecological benefit to even the biodiversity around here.

Wow, it sounds like a lot of thought went into this, which is really impressive. And you've got some certifications as well, haven't you? What. What have you been certified to?

So we have been certified with like we have just in the. We've already submitted a document for the Indian Green Building, very Indian Green Building certified Factory building. Green Factory Building, basically, which is certified by the Indian Green Building Council. Other than that, we are also in line to be certified from the U.S. green Building Council, which is LEED, it's Leadership in Energy Design and Energy Efficiency and design. Along with that, we are of course ISO certified for 22716, which is a cosmetics GMP 9001, which is your QMS. Then we have 45,001 certification, which is for our HR practices, which is the ethical, like ethical HR practices, health and safety, basically. And along with that we're also doing 14,001, which is environmental sustainability as a practice. We are also in line to get certified with cedx. We have our audit on five days, probably after this podcast ends.

Amazing. Well, it sounds like that's why Also you need 160 people working there because you have a lot of work to undertake. So in terms of a typical facility, in terms of size like yours, how much water would you typically use? Because this is something I don't know anything about. And a contract manufacturing facility. What's the water used for as well? What do you guys do?

So water, we call it three levels of water. So the first level of water is the water which we directly take up and we purify. We do RO plus EDI and all of the treatments, the UV treatments, and we get a purified water that was used predominantly for manufacturing, that is water one, so that after that there is water two, which is a rejection of this. During this process we have a reject water which is formed that is used for your cleaning, flow cleaning and stuff like that, and is also used for safe other activities. The third one is the reusable water which is after the effluent treatment plant or after the third rejection of this, that is used for your flushings, your gardening and stuff like that. So all these three levels of water come like on a good manufacturing day. We're manufacturing through different multiple lines. Our consumption is around seven and a half thousand to eight thousand liters a day. And the reason it goes that high is because, like I said, the biggest vessel we have is 2000 liters. If we're making cream, we need at least 1300 liters of water for that one batch. So if we're making two batches, we're making three batches, it ends up being a lot of water. And even after all that, even after consuming that, Lauren, just four months of rain can ensure that all that water is back in the system in its clean form. To ensure that we can use this water again, people around us can use the water again and we're not just depleting a natural resource.

That is incredible. That's an incredible amount of water as well. How does your facility then compare to facilities that don't have those eco design certifications and built into how the whole plant is put together, presumably they use even more and then they are depleting the water table quite considerably.

Yeah. So most of the times, like especially in India, a lot of these facilities are in your industrial zones. So they have no. They have a water connection with a flow meter and they are just paying for the water. Right. They don't have a groundwater source. So when you have that, you don't have a ecological sensitivity to that water because you're just getting it from a tap and you don't know how much you're actually consuming. You're just making a, like making a payment of that water and there's no way you can give it back because of the lack of space. Here we have that space where we have around two and a half acres of land, like 100,000 square feet just of land around us, which ensure that we are very, very like understanding of it and understanding of its limitations. For us, the main part was I don't want to operate this factory for the next two years. I want to operate for the next 50 years. And I cannot do that by damaging the ecosystem around me. I wanted this to be okay. I wanted what we do to be important. And when we're talking about being sustainable, we use this phrase called sustainable by design to explain to people what we are. So it's very easy. I'm sure you've seen it all around you. Even if you go to Expose and in cosmetics or like cosmoprof anywhere in Europe as well. Everyone is sustainable, brand is sustainable, everyone is publishing a sustainable report. But what's important is being sustainable by design. When your very act of your basic acts need to be with sustainability in mind.

It's true. Everyone is sustainable in their own mind. They make a lot of claims. That doesn't mean they have anything whatsoever to do with sustainability. Facility. You're quite correct. What about waste? How much waste does a facility like yours produce and what do you do with it?

So for waste, we like all the effluents that is generated during cleaning, after the cleaning of the vessel that goes into our effluent treatment plant. So we have a 15,000 liter effluent treatment plant which takes care of all the effluents. And we're left with a cake. And that cake is gone to the main waste management place for destruction. Other than that, in terms of packaging, we reuse all of our cartons that we receive. So none of the paper packaging ever goes to waste. And the food waste, we have a compost pit around the back where we are. We use it for compost and we then use it as a manure for trees around us. And then we're left with microbiological waste which has gone again, gone for destruction. The last is plastic. So plastic we have a lot of shrinks, we have some plastics which are biodegradable, some are not. So we end up clubbing all of it. We have a tally system where we tally all the plastic we consume in the end of the month and we try to send it to recycling. So we are at this moment, I would say, very, very conscious of all the ways that we generate. And since we are in the pharmaceutical segment, we have a lot of one time use things like gloves, masks, caps. So we have eliminated a lot of that. We are now only using cloth caps in the facility. So we don't use those paper caps. Leather, plastic, nylon caps, we don't use. We try to reuse the gloves as much as possible, as much as we can. On the other hand, we have, we don't have disposable overgrounds. We have like overgrounds are washable for a very, very low amount of water as well. To ensure that we minimize the waste. Our target is to go zero waste in 2027. So we are aligning ourselves to that. We are starting to document a lot of this. So once we are positive in terms of our recyclability, we will be trying to get to net zero waste by 2027.

I love this and all of this is coming through your leadership as well and the fact that you're so passionate about this. But what about your staff? How have they embraced all of these sustainability initiatives?

So my staff, funny bunch, they, they have pushed the limits of what I can think as well. So I've had. I had this idea of being zero waste by 2027. They're like, why 2027? We can just start tabulating now. We can just start categorizing now. We have waste categorization, waste segregation. And we have a game which a lot of people who join us play for the first time when we have any new induction. The part of the induction is a game called which box is the right box. So there are four boxes, like four different waste bins where they have to choose where the waste goes. That's a very important part of our induction process where people are actually taught which dustbin is the right dustbin for that kind of waste. The small things like that. This is something which I could not of course, think of, but they have thought and they have gamified it to ensure that people are getting more and more open about it. Plus we had tree plantations inside the factory. And what happened is we had some extra trees which we had called for from around the area, like nurseries around us. What they ended up doing was they ended up doing a tree plantation drive outside the factory along the road as well. Then even at their own homes, we get stories where they are trying to reduce waste at their own home. They're trying to. That. That there's a very high sense of trying to switch on the. Switch off the lights when they're not in use. We also have energy meters in different departments. So we have a. At the end of like almost every three months we have this thing where we see which department has reduced consumption of electricity. So the department which has done that, they get a special prize as well. So they, they are embracing it really well. And people who are like making up effort to be more sustainable, reduce paper usage, reduce all of that. It. They do get special praise and they've been like taking it to the next level better than I could have ever imagined.

I love this and I love that game. Which box is the right box? That sounds really fun. It's a really good way of doing it. Nishit, this is absolutely fantastic and I love what you've built here and I love the vision. Tell me my last question to you is, what's the big plan? What comes next for cane cosmeceuticals?

So our main plan is to restructure and make sure the industry really looks at what manufacturing means, what sustainable manufacturing means. What's the meaning of like ensuring that your product is cradle to cradle? At actual. We want to, we are starting with Mumbai. This is our facility. This is our mother facility. But we want to expand to ensure that we cover each and every player, each and every geography in terms of the global footprint. But we want to start with India. And our main ask for like main point of cane is the fact that we want people to use this as a gateway. We have a gateway of India in Mumbai. We want to be the second gateway to India where we have foreign brands who want to come into India, but they need to set manufacturing to improve costs. But they are very mindful of their quality. We want them to think of us as that right gateway. And we want to be the gateway for Indian brands who wanting to go global and they need those higher standards of quality to go global. That's what we want to give them here as well. So that is the main ethos of what gain is. It's kind of like a gateway to India.

I love this. Well, if people want to make use of that gateway in or out of India, where can they find out more about you? How can they get in touch with you?

I am Pretty responsive on LinkedIn is one. The other part is we also have a website which is gained cosmeticals.com and we're always open for a conversation, open for soundboarding new ideas, getting onto new projects and helping you helping others build the best brand and the best product which they want.

I love this. We will include all of those links in our show. Notes Nishit it's been really interesting talking to you. I have no doubt that there'll be lots of people phoning you after this podcast asking you to come and help set up their contract manufacturing facilities as well. What you've built is really impressive. So thank you so much for joining me today.

Thank you so much Lauren for having me. It was a pleasure to be here.

I would love to hear your thoughts on this episode. Had you ever thought about the facilities where your skincare and hair care and makeup is actually manufactured? How important is it to you that the manufacturing plants that make our beauty products do so sustainably? Leave us a comment on our social channels as both the Formula Botanica team and I love hearing from you and if you want to hear more about some of the topics we covered today, please do delve back into the podcast archives. Some great Examples include episode 185, in which I interviewed Formula Botanica graduate Dewey Kao in Indonesia, who's created her own contract manufacturing facility after building an empire around her skincare brand, or episode 190 in which I controversially talk about the beauty industry giants who are creating what I term industrial beauty. There's a wealth of information in our old episodes and I do encourage you to go back and listen to them. Thank you for joining Nishit and I for this latest episode of Green Beauty Conversations. I really hope you enjoyed it, and if you did, please do leave us a five star review so that other people can enjoy these conversations too. Make sure you subscribe to the podcast on Apple Podcasts or Spotify or whatever your favorite podcast app is, and stay tuned for the next episode. Follow Formula Botanica at Formula Botanica on Facebook, Instagram, YouTube, TikTok, Pinterest, Twitter, or LinkedIn. We're everywhere and come and give me a Follow Lorraine Dalmeier on Instagram and LinkedIn. Visit our website@formulabotanica.com and sign up for our free online formulation course today.

Sam.