Things got interesting at this moment as one of these two, Michael Shih, Chairman of the Hong Tong Tannery Group, made a quite lengthy unannounced speech. I say that the session was hijacked as, somehow, he had slides in the system and no one would turn off his microphone despite my gesticulations from the Chair. It is curious as the Hong Tong Tannery Group is well known, and rather than using up the discussion and question time, I am sure he could have had a properly scheduled slot in the presentation programme.

Sustainability and socially responsible

It is worth spending a moment looking at the issues which are so strongly felt that a senior tanning industry member wanted to force himself onto the stage in front of 750 delegates.  He argued that “some stakeholders in the leather industry are too selfish and do not care about the industry’s sustainability development and social responsibility”. He saw four causes for this.

  1. It is the leather traders who have caused a recession in the leather industry. By manipulating the market, they raised the price of finished leather and effectively opened the door to synthetics in footwear.
  2. Too many tanneries only want to make more money and not only fail to treat wastewater effluent, and exhaust fumes but also blame the government for its harsh environmental policies.
  3. A lack of development and creation amongst chemical dealers, mechanical dealers and tanneries.
  4. Footwear companies keep asking tanneries to reduce prices. Tanneries work hard to provide competitive costs and stay profitable, while improving environment issues and keeping ahead in production and  technical aspects.  “Without tanneries in Asia how to enjoy product with a high quality and a good price?”

These are very strong opinions and I sure most will agree that it is a problem for the whole leather industry to have to compete with tanners who cheat on the environment. Most often this appears to be the result of non-enforcement of existing laws through corruption or incompetence. We must all find ways to fight the huge damage done to the workforce, the environment and the brand image of leather by this.

The other three points are more contentious as they sound more like the tanner preoccupied with love of the product without thinking of the consumers who will use it.

Good new product development in the long term is very important but advanced tanneries succeed by building an in-house level of competence and using this to work closely with competitors.  It is not a moment to complain about suppliers but to work more closely with them.

Just as importantly as indicated in the excellent UNIC presentation hide prices are volatile.  This is essentially a problem of hide supply not being able to grow with demand and the reason we have so much plastic and other competition with leather in the market. This is where we need to direct our intellect. We need to fight together to make leather more valuable in all our end markets and to make the consumer appreciate that value in use through making a great product and ensuring that they understand it environmental and sustainability benefits to all. Hopefully Michael Shih will join us in this long-term battle.

That is how the best tanneries in the world have managed to remain profitable over the long term. Getting angry with suppliers and blaming our problems on others is not the solution.

We need to drive forward positively, which was the general feeling which appeared to come away from all the meetings in Shanghai.

Dr Mike Redwood

5th September 2017

Follow Dr Mike Redwood on twitter: @michaelredwood

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