Talking Point

First published in the January/February 2020 edition of ILM
Published:  05 March, 2020

In a new editorial feature for 2020, ILM asks a few key industry players about the burning topics that are currently affecting the sector. This time we want to know: What are your predictions and challenges for the year ahead? 

Philip Azarchenkov

Philipp Azarchenkov, General Director, Volga Tannery, Russia

2019 has been pretty challenging for the whole leather industry. Last year we felt tested against our ability to conduct business in very unstable market conditions. I would call last year rather negative for the tannery as we were pushed to significantly reduce our output and focus on the quality of customer service and selection of raw materials in order to maintain our sales at a certain level. The main reason for the new market conditions is the trade war between the U.S. and China that is having a profound impact on the Asian and European leather markets. Another reason is the blooming sector of synthetic materials used for the production of shoes and bags.
It is difficult to predict the market sentiment before the end of the first quarter of 2020. It depends on whether new season trends will see leather as the material that defines comfortable and fashionable products in all segments, not only at the top tier of the market. I believe that currently the major challenge at industry level is to try to promote leather as a material that does not simply carry plain technical characteristics, but contains a philosophy of added value while keeping up with traditions of quality and comfort.
Another issue is to try to reverse the public attitude towards leather as an environmentally harmful material with animal cruelty being the basis of the production process. It is now commonly known that the production of synthetic materials carries much greater threats for the ecology of the planet.
That all being said, there is a certain level of optimism in the thought that the crisis cannot last forever. I happily share that sentiment. We are currently experiencing one of the deepest and long-lasting periods of instability as a leather industry, which means that sooner or later it most certainly should come to an end. Our New Year’s resolution is to keep focussing on the “locally produced – globally accessible” concept of the business. We see our customer service, and hence long-standing, positive relationships with our customers, as our main advantage that we can build on.

Gabriella Bocca
Gabriella Marchioni Bocca, Managing Director, Lamebo, and President, Assomac, Italy

Last year was challenging; the political and international uncertainty, the new ecological requirements along the international leather value chain and the ‘fake news campaigns’ pushing the narrative that leather and leather goods are ‘dirty and enemies of the environment’ are just some of the issues that we faced. But we have put a lot of effort into responding to these challenges by applying innovative tech solutions that empower our machineries.
A good entrepreneur is optimistic by nature. That said, we need to look carefully at the dynamic mutations of international economies. Connections, virtual and physical, give us major opportunities. It is hard to foresee how trends will change; economic forecasts reveal it will be unlikely that 2020 will be an easy year, but I feel there are good business opportunities ahead based on an innovative approach and technical developments. However, above all, the perception of leather among some consumers needs to be challenged and changed. Leather has been part of a circular economy process since man started breeding and hunting animals. We need to fight back and resolutely stop the fake news that consistently claim animals are bred for their skins; the scientific proof of the environmental impact of unwanted hides and skins ending up in landfill speaks for itself. Consumers must be educated to see the sustainability of leather along its whole life-cycle, and designers need to be encouraged to see leather as a viable material for their products. This, for sure, is the first challenge of 2020.
With my Assomac President’s hat on, we (the tannery machinery manufacturers) are also working harder to respond to a changing marketplace. The digital transformation is a powerful tool for a new business approach based on sustainability and environmental and social issues, but you cannot change your industrial plant and machineries without a new business strategy. We work internationally and that is a great advantage. We have many exciting plans for 2020, including even more sustainability projects within Assomac.

Steve Sothmann
Stephen Sothmann, President, Leather and Hide Council of America (formerly known as USHSLA and the LIA)

For the U.S. Hide, Skin and Leather Association (USHSLA), last year was monumental. The merger between the USHSLA and the Leather Industries of America (LIA) was the most high-profile event that took place, bringing together two well-respected organisations under one shared goal of promoting the future interests of the entire hides, skins and leather industry both in the U.S. and abroad. In addition to the merger, we introduced a number of new and exciting programs during the year, such as the “Real Leather. Stay Different” campaign, the “Forever Leather” Fashion Show in Shanghai last September, and a next wave of promotional activities, partnering with both the China Leather Industry Association (CLIA) and the Taiwan International Leather Association (TILA) to conduct leather fashion design competitions.
I therefore feel very optimistic about 2020 for the Leather and Hide Council of America. Our new Association is poised to make significant progress in 2020 and beyond in terms of promoting leather and the interests of the entire industry. For the sector as a whole, I am cautiously optimistic. It has been a brutal few years, but I do think the tide is beginning to turn in our favour. As consumers wake up to the danger of micro-plastics and other non-renewable or unsustainable materials, they will seek out what our industry has offered for thousands of years. We’re the solution to a problem and I believe in 2020 both the news media and consumers in general will begin to understand that. The most pressing challenge for our industry will be to continue to promote, defend and speak for itself across a diversity of media. We must seize the moment to build the relevant infrastructure the industry desperately needs to promote its own interests and stop allowing others to define leather’s place in society for us. The most immediate opportunity we have as both an association and an industry is to engage with brands, retailers, general media and consumers in order to tell the story of leather. No single company, association or institution in the global leather industry is going to “solve” our shared problems alone - we must all take up the mantel of leather defence and promotion if we are to move the needle in our favour.
Our “Real Leather. Stay Different” campaign will continue to produce new, fun and innovative activities in 2020 and beyond. In that same vein, we intend to also engage the general media in a way the association has not done previously, to make our case that leather is the best material available in the marketplace for the eco-conscious brand or consumer.