Prime Tanning to shut Rochester and Berwick plants
Less than seven years on from opening its showpiece leather finishing plant in Rochester, New Hampshire, Prime Tanning – arguably the world’s largest tanner - has announced that the facility is to close.
In making the announcement last week, the president of Prime Tanning, Ken Purdy, also said the company will cease production at its nearby Berwick plant in Maine and convert the unit into a product development centre. A total of 550 job losses will result from both closures.
The news that the Rochester site is to close will come as a particular shock to the US tanning sector, given the $22 million investment made by Prime Tanning in building the 184, 500 sq. ft. plant in 1995. Hailed at the time as the world’s most advanced finishing plant, the Rochester tannery was specifically created to reduce finishing times from the then-average of fifteen days to five, and so more closely align the company’s output with the needs of US buyers. Featuring an ‘open plan’ workspace and advanced computer systems, it also established a new industry benchmark for production flexibility, being capable of producing more leather, at less cost, than any other US tannery.
Despite this level of sophistication, it appears Prime Tanning’s US finishing operations were unable to resist the effects of globalisation and the inexorable trend towards producing footwear in China and other developing markets. In the US – the main market for leather produced by Prime in the US - volume footwear production has all-but ceased to exist and imports now account for 96% of all footwear sales. Another possible influence has been the strength of the US dollar.
In September 1998, Prime Asia Leather Company – a joint venture between Prime Tanning and Pou Chen – opened a 200,000 sq. ft. state-of-the art tannery in Dongguan, China, to serve the domestic marketplace. In January 2001, the Dongguan site reached its capacity of five million square feet and has since been expanded to provide 10 million sq. ft. – a capacity which the joint venture expects to fill in less than 12 months.
Speaking to the local press, Ken Purdy described last Thursday – the day of the announcement - as being "the most difficult and saddest day" of his professional life. "There just isn’t enough volume left to sustain us," Purdy said. "We’ve held out longer than anyone in the States. There is no leather industry left in this country."
Purdy said Prime Tanning will cease taking orders for the Rochester plant on October 1 with production being phased out over the following three months. He expected production to have ended at Rochester by December 1, and Berwick by November 2. Besides the new product development centre in Berwick, Prime Tanning will operate a sales, marketing, customer service, administrative and corporate office in New Hampshire. Operations at its wet blue plant is St Joseph, Missouri, will continue unaffected.
In the same report, Charlie Myers, president of Leather Industries of America, was quoted as saying the industry "has gone." It used to be a sign of pride to say that 50 hands went into making each pair of shoes, Myers said. "Now that’s a kiss of death. If it’s labour intensive it’s not going to happen here in America. That’s the long and the short of it."
