US slow-down affects tanning sector in Uruguay
28/07/2008
The US economic slow-down is having a strong impact on the Uruguayan tanning industry, one of the country’s highest added value industrial sectors.
The situation in Europe is also being carefully monitored by the government as any drastic change there could have a further negative effect on the performance of the local leather sector. A tanning industry workers’ dispute and the drastic drop of hide prices paid to abattoirs (a drop of US$ 8.00 or US$ 9.00 per hide in the last two weeks) are the signs of a growing problem.
Lower US automobile and furniture sales mean smaller leather orders for Uruguayan tanneries, which have already seen a 30% reduction in demand. A falling US dollar exchange rate makes things even more difficult.
Reports in the local press have suggested that German tanner Bader, located in the department of San José, has placed 90 of its 420 employees on unemployment benefit and succeeded in making another 17 workers opt for a special retirement plan. Most tanneries are in a similar situation.
The National Department of Industry has reported a 7.6% fall in accumulated leather export figures from January to June 2008. Exports fell by 21.4% in June alone.
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