Speaking to www.leatherbiz.com, VT Srikanth, senior manager at BASF India Ltd, said that in view of the proposed 100% expansion in tanning capacity in the Indian leather industry by 2010, chemical manufacturers and exporters are planning to expand their production capacity over the next three to five years in order to meet the growing demand. He added that in view of the fact that chemical costs account for approximately 10-15% of the total costs involved in leather production the market potential in India is significant. BASF India already has manufacturing facilities in Thane, Mangalore and Dadra where it produces expandable polystyrene, tanning agents, leather chemicals and auxiliaries including specialised metal complex dyes, leather dyes, textile chemicals, dispersions and speciality chemicals, acrylic polymers in primary forms and crop protection chemicals.

According to Govind Gupta from Bayer Material Science Pvt Ltd, five companies —BASF India, Dow, Bayer, Huntsman and M/s COIM India Pvt Ltd—are already meeting more than 90% of the demand for leather chemicals in India, estimating that India currently imports around Rs3600 million ($80 million) of the chemicals used in its leather industry.

Adding to this, S Ramesh, director of Abhilash Chemicals (Chennai) told www.leatherbiz.com  that India’s consumption of these chemicals is estimated to rise by 8% per annum in the coming years.

The chemical industry is one of the major contributors to India's GDP and holds a 14% share in manufacturing output. It contributes approximately 8% of total exports, and accounts for 11% of the country’s imports.

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