As society developed over the past three thousand years, the demand for individual leathers from a variety of sources was a significant contributor to the growth of international trade. However, we tend to consider globalisation as a 20th century event, during which digital tools accelerated the opportunities for outsourcing, transforming the lives of large numbers of workers. This growth in world trade has been assessed as a significant contributor to building GDP and increasing wealth, although not all have been winners.
Since the 1960s, leather has been part of this trend and I remember my first meeting with New England tanners in the 1970s when one complained about U.S. banks, that the leather industry had helped made wealthy, funding tanneries and shoe factories in South Korea that were replacing American jobs.
Certainly, labour intensive manufacturing of footwear, garments and leather goods did move quickly abroad. Tanneries tended to follow as they were often located in built up city centres with no room to add essential effluent treatment; it was easier to let new tanneries be built with the aid of international development funding alongside the new shoe and leather goods makers.
Globalisation
This totally transformed the leather industry, with European tanners frequently circumnavigating the world to deal with the Asian manufacturers used by their American customers. While the tectonic plates had moved, certain pillars were strengthened. Italy with its accepted quality and innovation leadership remained as a major tanning centre despite having to import most of its raw material.
U.S. hides continued to offer the highest volume of high-quality supply and, although full tanneries mostly closed, a highly advanced wet-blue operation moved alongside the meat packers. Meanwhile, Brazil and India adapted to fit into the new world order with offers suited to their access to raw material and skills.
For brands, leather sourcing policies evolved first to China plus one and then China alone. The annual Paris Fair (Semaine du Cuir), which had dominated the lives of generations of tanners, switched to Hong Kong with a rising focus on trade with China.
With today’s headlines loaded with supply chain issues and threats to globalisation, where will this take the leather industry?
The failure of the logistics industry to handle pandemic recovery has been a surprise along with the sudden arrival of shortages and price rises. But the underlying causes for disruption is set in events going back to the financial crisis and the arrival of Xi Jinping as President of the People’s Republic of China in 2013.
Complex global geopolitical situation
Although the leather industry has been on top of developments with growth in Vietnam and elsewhere, this unprecedented global geopolitical situation will require continued scrutiny by tanners everywhere. In areas of advancing technology and strategic materials, countries will inevitably move for greater self-sufficiency, and leather using brands will be adjusting once again for greater resilience.
The leather industry will not stop being an international one. French calf, Ethiopian hairsheep, U.S. steer hides and Bangladesh goatskins will always find demand around the world and top tanning nations such as Italy will continue to dominate, as will those specialist tanners who have worked hard to build a reputation for their leather.
With rising costs of labour in China and less interest there in training a skilled workforce in artisan approaches, leather footwear production has already expanded in Portugal and the UK, with other grades moving to the Indian subcontinent. France has been able to report some gain of market share from China in recent years.
These sorts of developments are to be expected, with new ESG demands related to traceability and the avoidance of modern-day slave labour adding more pressure for shorter, more domestic supply chains where appropriate. Shorter, easier to manage supply chains will also reduce environmental costs and avoid wasteful overordering.
We may have entered the 21st century confident about how the future looked but events have totally overturned matters. Add in climate change and the turbulence is far from over. The foundations of the leather industry are strong, but to keep the industry thriving we will need to be watchful and ever willing to adapt our strategy to meet new challenges. Fasten your seat belt.
Mike Redwood
mike@internationalleathermaker.com
Follow Dr Mike Redwood on Twitter: @michaelredwood
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