Location, location, location

Redwood Comment
Published:  19 October, 2022
Credit: fuyu liu/Shutterstock.com

Mike Redwood ponders the importance of location for the leather industry from tanning clusters to trade fairs.

Around the world, we have many famous tanning centres, famous at least within the tanning industry. Alcanena, Himeji, Ranipet, Leon, Santa Croce sull’Arno, Arzignano, Sialkot and Igualada offer just a taste.

Hoover’s 1937 Location Theory and the Shoe and Leather Industries, which talks mostly about New England in the U.S. through the late 19th and early 20th century, is one of the seminal texts related to the study of industrial geography and helps understand the choice of location.

This might relate to raw material supplies or consumer markets and is impacted by things like technological advances. Consequently, locations will sometimes change and occasionally, like Bermondsey in the UK and Cordoba in Spain, become history.

A similar situation arises with trading cities like Bruges or Cadiz that lose relevance because ports silt up or trade moves elsewhere. Both Amsterdam and London were major markets for auctioning imported semi-tanned skins from India for nearly a century, and London stayed on as a location for a major trade fair but was eclipsed by Paris as the UK industry lost its access to colonial sources of raw material and felt the cost of new environmental laws.

So, for a period, the main leather fairs were in London, Paris and Italy. Italy has used Florence, Bologna and Milan in a bewildering way but has now settled happily in Milan. The U.S. also battled with locations with fairs in Boston, a brief attempt in Miami and has now settled in Portland.

But, towards the end of the 20th century, the big international leather fairs became undoubtedly APLF in Hong Kong and Lineapelle in Italy, with the huge size of the Chinese leather industry adding Shanghai into the mix for top tanners, traders and supply companies. Others in Paris, Chennai, Portland, Novo Hamburgo etc. have remained relevant but never commanded such a wide audience.

The problems created by Covid have led to better-quality video conferencing and associated software. That has changed how we do some kinds of work and meetings in the future but, even so, it has been clear that there is no substitute for face-to-face opportunities to improve almost every aspect of doing business. Events to be attended will be chosen more carefully and used more effectively, and likely fewer staff will attend, but actual meetings, formal and informal, are certainly back.

Is Hong Kong dead as a meeting place for leather?

The question is where these meetings will be. Chinese regulations on Covid have meant that APLF 2022 moved to Dubai and is currently testing Bangkok. These have been designed as experimental as well as keeping APLF and its great team alive in our reality; perhaps creating a new form of hub and spoke cluster with Hong Kong at the centre, but other locations used as trading groups emerge alongside new more resilient supply chains being set up post-pandemic.

Hong Kong itself has been a worry. One not helped by the rather aggressive Xi Jinping’s two-hour speech opening the 20th National Congress of the Chinese Communist Party. Consequently, it increasingly looks as though both Hong Kong and Shanghai will disappear from the leather calendar as major event locations. Xi considers the changes in Hong Kong to have been a success and he will not change the zero Covid restriction policy.

In all areas, he doubled down on a more isolationist, anti-democratic and anti-Western policy. China is of course fully entitled to run itself as it chooses but, when Xi came to power, it was expected that China’s steady integration into a global community of shared values would continue and it would become more dominant through its scale and economic wealth. Now, only partly catalysed by U.S. provocation during the last administration, he intends to be more than robust at home and abroad in making China strong on his own terms.

Impact on leather

Normally, such geopolitical moves have only a limited impact on the leather trade, but Taiwan is important for both footwear and leather with many close ties. Xinjiang has already created problems for many big leather customers who must find a way to comply with ESG audits and still sell to China, where a “wolf warrior” mentality is strong even within social media.

And Hong Kong has been the leather industry’s outstanding base for grasping the world picture and putting all strategic plans into a fully informed global context for over three decades. It offered easy access to international travel and great facilities: enjoyable cities make for better quality conversations

So, as the leather industry gathers for this APLF ASEAN Special Edition, with a backdrop of rising inflation, pending recession and also renewed political uncertainty going forward, it is the moment to check this to see if it fits the bill for future events.  

Mike Redwood

mike@internationalleathermaker.com

Follow Dr Mike Redwood on Twitter: @michaelredwood

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