Automotive and furniture upholstery leather specialist Heller-Leder has been a prominent presence in the quiet Lower Saxony town of Hehlen for 90 years. Its commitment to keeping all aspects of production on its home turf is as strong as ever.

It has the capacity to process up to 1,500 hides a day and deals only with bovine hides from European sources (Ireland, the UK, Denmark, the Czech Republic, Germany and France) to capitalise on the advantages this material offers compared to hides from, for example, South America. The European ones are bigger and tend to have fewer scars and brand marks.

Heller-Leder runs chrome and free-of-chrome tanning operations, with roughly 40% of its output going to other tanneries for retanning and finishing, tanneries that perhaps don’t have the capacity or a beamhouse of their own, 40% going to its own furniture customers and 20% to automotive customers, the most prominent of which is Porsche. Across all markets, around 55% of the tannery’s output ships to clients in Germany. The company is growing its share of the Porsche interiors business and has won the contract to supply leather for the interior of the new 911 Carrera GTS Cabriolet and for the new 2011 Cayenne S. It has the necessary accreditation to carry out this work, to ISO 9001 for business processes and to ISO/TS 16949, specific to quality management for companies in the automotive industry. Heller-Leder’s quality manager, Günther Berger, explains that the automotive-specific standard is by far the more rigorous: while the documentation for ISO 9001 contains the word ‘must’ 100 times, the same word appears 400 times in the paperwork for the automotive standard, with even more demand for evidence than ISO 9001.

A further achievement the tannery has made in recent years is its involvement with the Leather Working Group—the multi-stakeholder group that assesses the environmental performance of tanneries and awards gold, silver and bronze status to those achieving the best results. In February, 2010, Heller-Leder became the first European tannery to achieve gold status, which it will hold for 18 months before undergoing a fresh audit. The company is also the first tanner to receive Blaue Engel (Blue Angel) certification for products and services that have environmentally friendly aspects. “That happened in 2009,” Mr Berger explains. “At first Blaue Engel applied only to finished products, so furniture in our case, but then they decided to look at components, too. Everyone in Germany knows what this is. When they see the logo, they know the sofa cover or whatever is made of real leather and has not come into contact with substances such as dimethyl fumarate.”

Heller has laid out its whole corporate social responsibility (CSR) code of conduct and has made the document available to important customers, including furniture chain Ikea, who need reassurance from their suppliers to meet their own declared standards. The code of conduct is based on conventions, definitions, principles and declarations that have come from bodies such as the United Nations and the International Labour Organisation. It lays out clearly the company’s commitment to treating its employees and the environment as well as it can, aiming to have a positive impact on both and to do good business while being a good business.

Part of this is running an effective waste water treatment plant at Hehlen. Official findings show that the plant has the capacity to process the domestic waste water of a town with a population of 87,500. By comparison, Hehlen has a population of 2,000 and nearby Bodenwerder just over triple that number. Treated effluent goes into a channel that flows into the River Weser 1.5 kilometres away. The public has access to walkways and cycle-paths on the surrounding farmland, which is open and ruggedly attractive, and the management team at the tannery knows for certain that in the event of any sign of an environmental problem their phones would start ringing very quickly. The company is here for the long haul and wants strong, long-lasting relationships with its neighbours.

Heller history

The original tannery here was owned by Georg Sander, a local businessman. Thomas Strebost’s great-grandfather, Julius Heller, went to work there at the start of the twentieth century and took over the business in 1920. The current owner’s grandfather, Emil Heller, carried the business on, as did his parents. His father, Hans-Wilhelm Strebost, is the person who led a move into chrome-tanning in the 1960s (before then all the leather was veg-tanned) and began an important redevelopment of the facility in the 1970s. Only the ground floor of the current building belonged to the original structure. Redevelopment of the first and second floors took place between 1972 and 1976. A redeveloped beamhouse came into operation in 1986 and a new dyeing and finishing department was completed in 2000. The finished set-up is a long, straight building running for some 450 metres beside the Hehlen-Bodenwerder road on one side and a disused railway line on the other.

Good relationships with suppliers are also critical. On the evening of the first Thursday of every month, a popular social event takes place at a different venue in the local area with representatives of the senior management team and of the different sections of the tannery in attendance. It’s common for representatives of supplier companies to come, too, at the invitation of their contacts at Heller-Leder. Ongoing contact with individuals helps a lot, Thomas Strebost says, rather than having a new person to deal with at the supplier company every one or two years. “You have to be able to take and to give,” he adds. “If someone wants only to take, you would have to end that relationship.”

Without naming names, the Heller-Leder owner says that, in his opinion, what sets the best apart from the rest is innovation. When these companies come up with a new idea, it works and often makes a genuine difference to the way the tannery functions. He gives an example from a decade ago: when the roller-coater system came in, it represented an important and lasting innovation. Not all new products can make this much impact, and Mr Strebost says a sizable proportion of new market offerings bring “more words than results”, but sometimes companies’ new ideas make a real difference and this, for his money, is what makes the best the best.

Open relationships

For Günther Berger, another important contribution the supplier community can make is in keeping tanners up to date with changes in legislation, additional controls, new demands and other events that can have an impact on their customers’ operations. “Some suppliers work proactively on this,” he says, “while others just do what they have to do. And you can see the difference. Good suppliers can hear the grass grow when possible restrictions are in the pipeline and they work in advance on alternatives for us.”

Many of the same principles apply to relationships with customers. The company’s head of sales, Frank Fiedler, says one of the important things is knowing whom not to sell to. He explains: “This is an important lesson to learn. It would be easy for us to sell more in the automotive market at the moment, but we know how much pressure automotive companies can put on their suppliers. The customer we have and want to keep, Porsche, is a relatively small automotive company, but a high-class one. We will sell a maximum of 30% of our leather to them. We know each other and it is a stable relationship, but we know we would survive if they said they were pulling out. There are companies that are 80% dependent on one customer and they have found themselves in a situation of losing money, of operating at a loss just to stay in business.”

At this point, Thomas Strebost makes it clear that Heller-Leder’s main aim is to stay in Hehlen and to continue to produce there, with a full-size tannery that is able to work from raw hide to finished leather. He is convinced the industry in Europe will need the capacity for operations like his in the near future, especially if pressure intensifies for the move to tan hides close to source (at least to wet blue). Outside observers have questioned his determination to keep the Heller-Leder beamhouse operation running, but he says he has always been sure this is the right thing to do. It’s difficult to set up new tanneries these days on green-field sites, Mr Strebost says; encouraging established companies to stay in the industry and grow is much easier.

“People want quality and will pay for it,” he insists. “Furniture manufacturers that have sourced everything as cheaply as possible have ruined their reputations. It can’t be good for anyone’s standing to offer only low-end products. We have attended events such as the Interzum design exhibition in Cologne showing specially developed, expensive aniline leathers specifically for furniture and we saw that the demand is there. We want to stay here. Labour is between 15% and 20% of our cost and we believe that good service, high quality and care for the environment are more important than saving 5% in cost by moving production to a lower-cost economy. Getting rid of our finishing plant or of our wet blue production would be cutting off a limb. We’d earn more money by making only wet blue, but we would only be able to employ 30 or 40 people here and we think we have a responsibility to the wider community.”

The question of what the leather industry can do, collectively, to keep appreciation of the material high in the eyes of the buying public prompts Frank Fiedler to think about the people who deal directly with the consumer. “We need sales people who can show the difference between leather and plastic,” he says. “It’s wrong to try to change leather’s characteristics [to make it look too uniform]. We need to go back to our roots and accept the natural look of the material. We need to teach the sales person at the end to explain the difference."

The amount of high-quality leather that goes to waste in the cutting plants run by furniture and car seat manufacturers is another thing that upsets him. He believes the yield in these facilities is often 20:80, with 80% going to waste. On hearing any objection, these customer companies are quick to point out that they have paid for all the material (which is the same as saying that what they then choose to do with it is their affair). “That doesn’t compensate us for the love we put into tanning the whole hide,” Mr Fiedler responds.

Consumers understand that it is better to have leather upholstery in their cars at the moment, Thomas Strebost insists, but he acknowledges that, to maintain that appreciation, the leather industry has work to do. Producing leather that looks, feels and smells like leather is part of that. He wonders why anyone should expect car-buyers to pay extra for leather upholstery if they cannot see and feel the difference. And when automotive brands and their seat manufacturer suppliers combine leather with plastic, he would like it to be clearer to the consumer which parts of the interior are leather and which are not. He concludes that it’s dangerous for the leather industry to permit this to continue to be a grey area. The impetus to clarify this is hardly likely to come from the manufacturers of synthetic leather substitutes who often disguise the nature of their products by misusing the term ‘leather’ and by saying nothing of their dependence on hydrocarbons.

“Tell the truth to customers,” says Frank Fiedler, taking up the mantle. “Let customers choose. If they know about these things, they will always choose leather.”

A kind of family

Thomas Strebost describes his company as “a kind of family”, a bank if the employees need it to be a bank, and a source of a van or a truck from the pool if they need to move house, for example. He says the workers notice the difference, that people who have come to Heller-Leder from other employers have remarked on this. And when life became tough for most businesses toward the end of 2008, his workers elected not to take their Christmas bonus. “They realise we are all in the same boat,” he says. Moves that the company has taken to be a good corporate citizen have ranged from funding the setting up of a museum in the house in Bodenwerder where local celebrity and eighteenth-century storyteller supreme Baron Munchausen was born, to funding for local football and swimming clubs and help for the district’s firefighters. There is a trust set up in the name of Thomas Strebost’s father from which this funding comes.
Separately, the company has actively encouraged employees to take part in an international bone-marrow donor matching initiative. This donor search takes place under the auspices of a not-for-profit organisation called DKMS, founded in Germany in 1991, and, as a result, a Heller-Leder employee was able to save the life of a leukemia patient in the US.

Other gestures have made an impact on the way people inside the tannery go about their day-to-day work. After liming, the hides empty from the drums into a sump. They can weigh up to 90 kilos when wet. Working in partnership with its pension fund, whose name in German is Rentenversicherung, a combination of a custom-designed working platform and manipulators makes it much easier for a member of the team to haul the wet hides out of the vat to go to the fleshing machine. It used to be a two-person job: now one person can do it safely. All employees have access to a special offer for gym membership, set up in conjunction with a health insurance provider because keeping people fit and healthy is better than treating them when injury or ill-health hit them, prevention being better than cure. The Heller-Leder workforce can buy membership at a local gym for a third of the normal price. The company also pays a third and the health insurance company contributes the same amount.

Political influence

There is a biogas plant at the back of the property, jointly owned by Heller-Leder, a local farmers’ co-operative and a private investor. Unfortunately, at the moment, waste from the tannery cannot go into the biogas plant, only corn from the farms. The biogas produces energy for the power grid and existing legislation will not allow a mix of sources if you want to be paid at the highest rate, and the difference would work out at around E200,000 a year. Thomas Strebost has faith that legislators will change their views. The minister for the environment for the state of Lower Saxony, Hans-Heinrich Sander (no relation to the founder of the Hehlen tannery), has been to see the facility and attended a meeting at Heller-Leder with bureaucrats to discuss the matter. The laws he had to put into practice were flawed; he could see things from the tanner’s perspective and has said he will try to change it. “I like the minister,” Mr Strebost says. “He’s independently minded, and he runs a farm of his own, and his feeling is that if his party thinks he’s wrong, it can throw him out. We got help from him, in the right way, the open way. He was humble enough to change his view. He knows we are good guys.”

His company has been taking care of the environment for more than 30 years, he insists. Its first waste treatment plant came into operation in the early 1980s, attempting to have the lowest impact possible. He points out that leather itself has a low impact, saying: “If you take care of leather, it is a material that can outlive you. In terms of lifecycle, the impact of leather is very small compared to other articles in your life. Plus, I think it continues to be important in our knowledge economy for there to be people who know how to make leather, the same as we need people who know how to bake bread. Making leather is almost as old as human existence, so how can it be wrong?”

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