It's not just made up, the story is almost a word for word translation of a story that's been circulating for years in Chinese. Of course people have called bullshit on it before.
If you can read Chinese, you can check the thorough debunking of this myth right here, from someone that actually works in a soap factory: https://www.zhihu.com/question/27132006
If you can read Chinese, you can check the thorough debunking of this myth right here, from someone that actually works in a soap factory: https://www.zhihu.com/question/27132006
And that was from 2014.