Shanghai Richina Leather (SRL), Garden State Tanning and Shanghai Light Industry Holdings (LIH), yesterday entered into an agreement under which the three will look to expand the market for SRL’s soon-to-be-enlarged Shanghai tannery.

Undertaken yesterday in New Zealand in the presence of the country’s Minister of Trade, Mr Jim Sutton, and the Chinese Ambassador, Mr Chen Ming Ming, the signing was timed to coincide with the visit to New Zealand of China’s President, Mr Hu Jintao.  Also travelling to Auckland to take part were the President of LIH, Mr Lu Yong Jie, the President of Shanghai Leather Corporation Mr Huo Jian Guo, and the President and Chief Operating Officer for Garden State Tanning, Mr Mark D. Lecher.  The signing was made at the Auckland headquarters of SRL’s parent organisation, Richina Pacific Limited.

Due for completion in mid 2004, the enlarged Shanghai tannery will triple SRL’s output to over 200 million square feet of leather a year, an estimated 30% of which will go to automotive production and the remainder to existing shoe, upholstery and garment leather manufacture.  Whereas SRL will continue to concentrate on the Chinese market – particularly the fast-expanding automotive sector - Garden State’s role will be market the tannery’s output to international automotive customers outside the country. Maryland, US-based Garden StateTanning already includes BMW, Chrysler, General Motors, Ford, Honda, Isuzu, Lexus, Lincoln, Mazda and Toyota within its customer portfolio  For its part, LIH - one of the largest state owned companies in Shanghai - will continue to lease SRL the property within which the tannery operates and provide the necessary licences. 

 “This memorandum represents a significant commercial opportunity for our China-based leather operation SRL, as it opens up to us an entirely new leather market of unlimited potential, and is a practical example of the business opportunities that exist for New Zealand companies once established in China” said Richard Yan, Acting Chairman, Richina Pacific Limited.

SRL already employs close to 2000 people, and in the current financial year is forecast to achieve leather export sales of some US$105 million.  Richina Pacific says it also expects to be in a position to confirm some new appointments to its main board within the next month.

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