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Soap is made by heating animal fat or vegetable oil with concentrated sodium hydroxide solution (caustic soda solution). The animal fat or vegetable oil react with sodium hydroxide to form soap and glycerol.

Another method is where mutton fat is heated with concentrated sodium hydroxide solution. 
In this way, glyceryl palmitate gets hydrolysed (breaks up) to form sodium palmitate (soap) and glycerol, which is an alcohol.

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