Colombia needs more leather, Cueros Vélez insists
11/06/2015
At the start of 2012, Cueros Vélez said it wanted to have a total of 300 stores selling its bags, belts, shoes and other products by the end of 2015. With six months to go, it now has 230 sales outlets in Colombia and in seven other markets in Latin America and the Caribbean. It now says it will aim to add 100 more in the next five years and is particularly optimistic about further expansion in Peru and Venezuela.
It also has a modern headquarters in Medellín, incorporating its production and commercial offices in a custom-built facility covering 20,000 square-metres. From a figure of around $14 million ten years, its turnover has grown to reach almost $100 million last year and company president, Juan Raúl Vélez, has said of reaching $120 million this year.
Mr Vélez said in recent comments to local media that he believes a boom in shopping malls in Colombia has helped his company grow, although he said some cities are close to saturation now and that Cueros Vélez will choose the locations in which it sets up new stores with greater care in the years ahead.
But he identified an even bigger challenge. He said: “It doesn’t make sense for Colombia to export its hides and skins without adding any value to them and then to import finished leathergoods back into Colombia. We have the skills to make those finished products here in Colombia, but we are in need of raw material.
“The situation is unregulated and we see raw, salted and wet blue hides being allowed to leave the country while the price of the material has risen by around 40% in recent times in the domestic market. And this affects us because the cost of leather accounts for 50% of our production costs.”
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