Opportunities for business in China at ACLE 2014

China
Published:  23 July, 2014

Since its launch in 1998 ACLE has shown 17 years of steady growth both in terms of the number of exhibitors (domestic and international) and more significantly in terms of buyers passing through the fair.

The 2013 event was no exception with a record number of exhibitors, 1400+ and more than 24,000 visitors. However, since last year, China’s leather industry has been facing fresh challenges as the government seeks to clean up the industry and protect the environment while promoting sustainable production practices.

This has caused a shake-up in northern China, especially in Wuji and Xinji in Hebei province, as polluting tanneries that have not complied with new environmental regulations have been closed.

Such actions sparked rumours of falling production and some sort of crisis in the China leather industry. All what the authorities were doing was imposing new regulations for the benefit of local communities and in order to promote safe, sustainable production resulting in larger leather production units operating within the law.

It is against this transitional backdrop that the 2014 edition of ACLE will take place and as China’s leading commercial platform for the industry, the event looks set to be an excellent opportunity. Western companies can prosper and sell more finished leather to Chinese manufacturers as the internal production of light leather had fallen by 23.2% in 2013 compared to 2012 according to the China Leather Industry Association’s (CLIA) own figures.

It is interesting to note that both imports and exports of semi-finished and finished leather rose significantly in 2013 indicating that the industry continues at its dynamic best. Export rose to 9,000 tons with a value of approximately US$100 million (+16% and 24.2% respectively) and imports reached 240,000 tons valued at US$1.02 billion (+4.7% and 6.6% respectively). So, despite a fall in leather production trade continues to grow which is vital for western exporters and their local fants.

With raw material and leather prices still close to record levels across the board at the time of writing it is in the above import figure of US$1.02 billion that opportunities lay for the major international tanneries that exhibit at ACLE year-in and year-out. Rising prices and steady demand equal handsome profits and an improved bottom line for enterprising tanneries producing quality leather for their China clients.

The CLIA’s latest report notes: “Given the recovery of developed economies and the reform of China’s leather industry, we project that the industry will continue to grow steadily in the second half of 2014. Although import and export volumes might be subject to slight fluctuations due to market factors, we believe such fluctuations will not be too strong.”

This is a positive message for the leather industry as a whole from the CLIA as reforms are implemented within China and recessionary pressures in developed economies recede after almost seven years as world stock markets continue to rise in anticipation of “better times ahead”.

Looking forward to ACLE 2014

The importance of ACLE can be judged from the number of leading chemical companies for the tanning sector that launch new products at ACLE underlining the weight of China’s market in their sales ledgers. The chemicals section in Hall E2 is sold out and for tannery technicians wanting to see new technological developments, Hall E2 is the place to be.

Countries such as Turkey have had an ever growing presence at ACLE in recent years. Traditionally Russia was Turkey’s biggest market but it has now turned its attention and marketing investments towards China and Asia as can be seen from the Turkish presence in Shanghai and at ACLE’s sister fair, APLF MM&T in Hong Kong.

Brazil continues to maintain its presence at ACLE and as one of the biggest suppliers to China’s tanneries and manufacturing industry its principal international tanneries can be found there backed by the organisational expertise of the Centre for the Brazilian Tanning Industry (CICB) and the logistical and financial muscle of the Brazilian Export and Investment arm - APEX-Brasil.

According to the Organisers visitor pre-registrations are currently running 10% above the same period last year and so far 95% of the available booth space has been sold in the 80,500 square metres of exhibition area with over 50,000 square metres occupied by domestic companies.

For the 2014 event there are 17 National Pavilions from 13 countries and overall there are more than 1200+ exhibitors confirmed from 36 countries and regions.

With China’s leather industry going through a transitional period as outlined above ACLE 2014 will be a hive of activity and information for companies exporting to China and looking for new contacts to develop. Business will continue to be transacted and deals closed but it is important to be there so as to gain a firsthand understanding of the changes taking place in China – information which will serve exporters well in the future when the environmental transitional period is over.

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