It is very hard to digest the fact that the last APLF Hong Kong trade show was in March 2019, nearly three years ago.

For a leather industry that has its historic origins in the very beginnings of international trade, Hong Kong has unquestionably been one of the best locations for a significant international show over the past few decades.

Three years on it, does not feel like that. In the first year of the pandemic, all of the major markets in Asia followed routes that brought them through faster and better than the rest of the world, but the extended life of the pandemic, the new variants and the process of vaccination have levelled the playing field across the world since then. The early thoughts that Far Eastern countries would rapidly dominate global economic and consumer purchasing power have consequently weakened.

Moving East

Ten years ago, McKinsey Global Institute tracked the movement of the World’s Economic Centre of Gravity to a line of longitude through the Caspian Sea moving eastward towards China by 2025. Near where it resided a thousand years ago and until it began its race westward in the early 19th century.

But, for the moment, the rush to China is delayed. Whether that line stabilises around Baku and Tehran or Lahore and Chennai does not matter much, but it does support the decision that APLF have made to kick off an industry restart in Dubai.

Hopefully the facilities in Dubai will be able to come close to those in Hong Kong for meetings of trade associations, award ceremonies, reunions of every sort, serendipitous get-togethers and many seminars as useful as the Hong Kong arrangements uniquely allowed.  If so, the beauty of Dubai is its direct links with so many parts of the currently evolving leather industry.

With China rapidly aging and engaged with the U.S. in totally different ways than were expected, the future dynamic for leather looks more likely to oscillate between Africa and the Indian subcontinent. There, unlike with China and most of its near neighbours, populations are growing quickly in big leather producing countries such as Nigeria and Ethiopia.

Supply chain resilience

The pandemic has forced us to place resilience ahead of supply chain simplicity. More goods look certain to be made nearer to final consumer markets and reliance on long supply chains will be reduced. ESG issues must be overlaid as supply chains are reconsidered, as the pandemic has shown that companies who do not meet reasonable social and environmental standards will be penalised. So, the new areas of interest have some “hot spots” to quickly sort out.

Africa has the growing populations of the world and big raw material supplies. It needs attention to achieve better linkages into international networks, help to use better managed livestock to improve soil rather than degrade it, help with livestock welfare, help with raw stock preservation and leather making innovation to handle all grades. And with this should come a huge boost in quality employment, circular approaches and waste management. 

Looking north, the Indian subcontinent has traded with China, but not with great ease, and has been gaining some production as costs escalated in China over the past 15 years. All the subcontinental countries have leather industries that have underperformed over the past few decades and now must be their moment to change that positioning.

Removing the negatives and getting their articles into the higher price brackets well away from commodity pricing. Too much of their development this century has been about doing the same things as in the past; only louder. They know Dubai and need to use this year’s event to reconsider their place in the market and routes to market.

This is exactly what other regions such as Europe and the Americas are doing as they look at the growth in leather footwear production in Portugal and Inditex’s success with a more responsive, regionally planned supply structure.

We will get a considerable understanding of how things are moving from the important European events we are about to see but, until 2019, the global picture in any year never fully came into play until we sat in Hong Kong watching and measuring the current leather dynamic.

After residing for most of the 20th century in Paris and three decades in Hong Kong, the essential meeting place for one of the oldest industries that has only and always prospered through international trade needs to move on. For 2022, the must go-to spot is Dubai.

Mike Redwood

Follow Dr Mike Redwood on Twitter: @michaelredwood

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