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CICB to seek government help in boosting finished leather exports

05/02/2015
Brazilian tanning industry association CICB has said it remains committed to reducing the volume of hides leaving the country as wet blue and to increasing the amount of value Brazilian tanners add to local raw material in Brazil. However, in recent comments to local media, CICB president José Fernando Bello made the seemingly surprising comment that one of the steps his organisation wants the federal government to take to help tanners achieve this aim is to end a tax on wet blue.

According to official figures, Brazilian leather exports had a record value of $2.9 billion in 2014, 18% higher than the previous record, $2.5 billion, achieved in 2013. In terms of volume, Brazilian tanners shipped fewer hides, 34.3 million compared to 35.5 million the previous year.

Of those shipped in 2014, 45.8% left Brazil as wet blue, while finished leather contributed 43.9% of the total volume, with the rest leaving as crust or as raw hides.

These figures suggest a higher share of the volume for finished leather than the year before, but Mr Bello has said CICB is aiming for substantial further improvement and to reduce the proportion leaving Brazil as wet blue to 20% or 25% of the total.

Curiously, he suggested that one way to do this was to end a government tax on wet blue exports to free up more money for tanners to invest in new technology. Currently, shipments of wet blue incur a tax of 9%, a measure put in place to discourage exports of semi-processed raw material at a time when there was greater demand for finished leather in the domestic market than there is at the moment.

“We want the government to stop charging tanners that 9% to allow them to invest more in producing high-quality finished leather,” Mr Bello said. “The best thing for our industry in the medium-to-long term is to invest in new technology and finish more hides ourselves. All tanners would like to take all of their hides to finished stage, but a lot of the time it’s not feasible to do that for commercial reasons.”



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