Indian leather should have a bigger share

Redwood comment
Published:  16 August, 2016
Mike Redwood

In 2015 the per capita GDP of China was US$7990 while that of India was only $1617. Quite frankly this is astonishing. Looking back at the China and India I visited first in the early 1980s India was far ahead, and the factories in China were truly reminders of a different, rather primitive, age. Trying to get sensible meetings with staff who worked in dreadful offices along the Bund was difficult and getting round Shanghai, which was just seething with bicycles and poverty, was extremely hard. 

Not that getting around Shanghai these days is that easy, congested as it is with traffic, but the modern city the global leather industry descends on in two weeks time is continuously being transformed and developed. And the meetings we will be having are less about the leather industry of today but more about how it will look tomorrow and the role that an already highly developed China will play in it, now that it's era of cheap labour and low added value manufacture is over.

What meantime, about India? The leather trade there grew initially out of its large and strong raw material supply with a long period making famous E.I. leather that was priced in auctions in Amsterdam and London. European tanners built up fantastic expertise to turn this material into some superb leathers. A shockwave ran through Europe in the 1970s when India stopped this trade and decided to finish out all its own leathers. Papers were written to prove that this just involved importing expensive chemicals for little increase in selling price, but India took no notice as it was the jobs in shoemaking, garments and leather goods it really wanted.

So began the building of quite an advanced tanning industry with a number of outstanding companies, and an Indian leather industry that did grow beyond the size of just its domestic raw material supply, but never by very much. It built strong, and apparently enduring, relationships with major brands but when Korea and Taiwan became too expensive for making footwear and other products from leather in the late 1980s it rarely figured as a potential destination.

Consequently, the Indian trade stayed powerful but did not grow as expected, losing out to China where all things leather not only expanded but developed and grew so much so that some American brands found it valid to transfer leather footwear sourcing from Brazil to put it into China: one country, one low price, one product of high quality and service that won the day.

So it is timely that as China becomes expensive and all major companies reconsider their supply networks that India has started its “Make in India” campaign. Yet it is not clever to get involved in what feels like a contrived campaign against those who collect the raw material, and feeds the publicity wagon much more strongly than the quality of the leather. Add this to the effluent plant deaths in Calcutta and greater Chennai, along with the weak enforcement of environmental regulations in Kanpur, the image of Indian Leather is tarnished before it reaches the start. No wonder that the battle is now with re-emerging countries like Portugal.

That background makes it hard for even the best tanners to build to their full potential under a “Make in India” banner. Now is the moment to take decisive action, and to be able to announce being part of the "Tannery of the Future" in Shanghai. 

Mike Redwood

mike@internationalleathermaker.com

Follow Mike Redwood on twitter: @michaelredwood

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