Australia’s Howe Leather, part of the Schaffer Corporation, has lost its contract to supply BMW with leather for car upholstery. The 17-year agreement has been terminated by BMW effective July 1, 2005.

The company’s chairman, John Schaffer said that BMW would now source a larger proportion of its leather in South Africa where rebates of approximately 23% of the value of automotive leather products are offered to suppliers.

He added that the loss of the contract would not affect the company’s performance in the current financial year but was expected to reduce overall sales at Schaffer by between 5% and 10%, depending on model sales, currency and the overall economic climate.

“The management team at Howe Leather will continue their focus on the many other car companies and models that we supply to and aggressively look for new customers and models. You can rest assured that we will be making every effort to regain BMW as a customer,” concluded Mr Schaffer.

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