Hulshof Royal Dutch Tanneries has been based in Lichtenvoorde in the east of the Netherlands since the middle of the nineteenth century. It operates from a busy residential part of the town but has won acceptance from its neighbours thanks in part to its innovative approach to environmental management.

There is nothing like forward planning. Herman Hulshof, fourth-generation chairman of Hulshof Royal Dutch Tanneries, based in Lichtenvoorde in the region of Achterhoek in the east of the Netherlands, is also the chairman of a regional body whose aim is to make Achterhoek energy-neutral by 2050. The project will have at its heart green energy based on biogas, with the biogas emanating from waste from the agricultural communities that make up this part of the country.

The contribution his company can make to this is important. Hulshof regards itself less as a tannery than as a processor of hides. Since 2004, its liquid effluent has been transported along two kilometres of pipes to a waste treatment plant outside Lichtenvoorde where it is converted into biogas at a rate of between two million and three million cubic-metres a year at the moment (including biogas produced from other waste sources). Dr Hulshof has hopes of increasing this to ten million, as well as a vision of five or six networked biogas plants coming into operation across the region to provide energy for the families and businesses based here. He says the biogas potential for the largely agricultural Achterhoek could be as high as 300 million cubic-metres and that a spin-off green energy company will be part of the 2050 vision.

By that time, the tannery chairman is convinced, people in Europe will eat less meat because there will be more people to feed globally and food that uses up too many resources to produce will become less commonplace and more expensive. More expensive and more exclusive bovine hides will inevitably follow with tanners severely restricted, as always, in the raw material sourcing strategies they can employ to address this. “We are recyclers of the by-product of another industry and we always have been,” Dr Hulshof says. “But one thing we must do is to make as much use of these exclusive and expensive hides as we can. The hide is food, so why should we flush all the protein away? The shavings and trimmings all have value. The leather industry needs to make the transition to producing food and energy instead of waste. I see the future as no-waste.”

Sustainable principles

He is heavily involved in local sustainability initiatives, but passes this off as “just an attempt to pass on my knowledge”. Developing sustainable principles and living and working by them is essential, not just for the Netherlands but for the whole of humanity “or we lose anyhow”, he says. He is an active member of networking groups that meet senior people from the Dutch ministries for the economy and the environment. He was also vocal at an October 2010 meeting that COTANCE, the EU tanning industry’s representative body in Brussels, organised in Bologna with a representative of the European Commission, regarding it as a further opportunity to lobby. Governments should take the lead, he insists. If they want sustainability, they need to apply rules that will encourage businesses to operate sustainably. In this industry, a good example would be rules that raw hides must be tanned close to source, from fresh to wet blue stage at least.

Weighing on average 47.5 kilos, Hulshof hides come from the large bull calves especially favoured in the Netherlands, with a daily capacity at the Lichtenvoorde tannery of 60 tonnes, or around 1,200 hides. The facility is only 30 kilometres from the border with Germany (some of the company’s 160 employees live there because houses tend to be more affordable), giving exceptional access to northern Europe’s large slaughterhouses and the high-quality raw material they produce. Being a short distance away from its raw material source gives the company the option of using fresh rather than salted hides. “We went totally to fresh in 1990. You could say it took some courage, but I believed in it. I didn’t want to deal with salt,” says Herman Hulshof. “It takes more effort to salt the hides than to chill them, then you have salted hides being shipped to Asia, say, where they wash the salt out, getting salt into aquifers. The salt issue is a shame. And you can tan better without salt; it’s harder to know the exact weight of a salted hide, making it more difficult to calculate the correct quantity of chemicals to add. Plus, salt damages the hides themselves.”

His tannery has the capacity to make 1.7 million square-metres of wet blue a year, and is producing 700,000 square-metres of finished leather at the moment, with 98% of it going into upholstery leather for furniture, cars and aircraft. Wet blue and wet white are newer, but popular, outputs, with the hides shipping to other tanneries for finishing.

New blood

Its chief operating officer, Sjoerd Kleisterlee, is part of a relatively new senior management team at Hulshof Royal Dutch Tanneries. Before coming to the tannery, he worked in the corrugated paper industry. The main difference that has struck him since starting to work with leather is that it is “more emotional; you feel an emotion for beautiful leather, the finish, the touch, the surface, the smell”. This makes it more of a challenge to turn the manufacturing of the material into a process, day in day out. Making boxes is more of a process, he confirms.

Chief executive Theo Lammers also contributes to the diversity, having arrived at the company in 2009 from the iron foundry sector. He sees parallels between the industries: both are conservative, with many companies being run by families and staying small. The foundry industry has, however, come in recent times to enjoy greater collaboration among operators, at least in the Netherlands, he says, through initiatives such as a joint effort to collect data, identify patterns in the data and share the information. Companies there have also been quicker to identify niches that have helped them prosper rather than try to be all things to all customers. “There is over-capacity in the tanning sector,” Mr Lammers claims, “so maybe it’s difficult for people to be quite as open with one another. If things get better in tanning, maybe people will become more open.”

Attractive to customers

Collagen colleagues

An important concept in Cradle to Cradle is that waste equals food, even if that means food for plants or insects that then contribute to the wider food chain. One of the latest ventures that Hulshof has embarked on takes this idea to heart. It has set up a new business unit called Hulshof Protein Technologies to produce from the bovine splits the tannery generates collagen that goes straight into the human food chain to give structure, texture and bite to products in the meat processing industry such as sausages, pâtés and hams. Under the commercial name Collapro, Hulshof currently has the capacity to produce 1,700 tonnes of the collagen fibre a year, with splits being sucked across a 20-metre pipe connecting the tannery to the collagen production part of the Lichtenvoorde facility. Around 20 people are working at this part of the plant; it’s in operation 24 hours a day and is growing. Soya-based emulsifiers are competitor products, but the Hulshof team believes its use of hides gives it a strong advantage: the controversy over genetically modified organisms is alive and kicking in the soya sector, the presence of soya lessens the meat content manufacturers are able to claim for these products, and the taste is a challenge. Collapro can beat it on all these counts, the company claims. And it sees an unusual (for a tanner) extra benefit. Leather is a by-product of the meat industry, as everyone knows. Global demand for meat is strong and is growing, particularly in developing countries; it’s clear, however, that packer firms are coming under pressure from many angles to tackle the carbon emissions associated with raising livestock—from use of land to methane emissions from cattle. Using meat replacement products to make some cuts of meat go further will allow the meat industry to feed more people without increasing the livestock population.

Hide headaches

As a consequence, the availability of hides is going to decrease, Hulshof purchase manager, Adriaan Hendriks, believes. “The raw material situation in the tanning industry overall is very difficult at the moment and is only going to become more difficult,” he says. “Everyone put the brakes on in 2008 and the price of hides dropped. It was unique. I have never seen that situation in 27 years in this business and I don’t think I will ever see it again.”

He has graphs and statistics on US hide prices that show a fluctuation of only 7%, from the lowest to the highest, over a ten-year period. It’s not too much of a difference over that period of time considering the amount of shouting and posturing that goes on in the hide trading arena. “It’s nonsense to have all that fuss every day to get the best price; it’s making the whole industry crazy,” he says. “It would be far better to agree to long-term stable prices. You don’t even have to agree the price; you could just use the index system. It would bring the same result over time.”

Penalty points

He calls the company’s decision in 1990 to work only with fresh chilled hides as a very important one, and the driving force of an impressively strict logistics system that has stood the test of time. Just-in-time deliveries of hides arrive each morning at seven, eight and ten-thirty; there are no hides in stock. “That was the choice we made,” he continues. “We were the first tannery in the world to move to fresh hides, but fresh hides are better quality, it’s better for the environment because there is no salt in the wastewater and we are in an ideal location, so we thought, ‘let’s go for it’. It limits our sourcing options, but we don’t regret the choice.”

Typically, the hide suppliers only work with three or four abattoirs close to their own warehouses and, on transporting shipments to Hulshof, use cold air rather than ice in their trucks to chill the hides because ice can leave warm patches on parts of the material. In the summer months, Mr Hendricks applies his supply chain planning expertise to arranging for suppliers’ trucks to travel at night so that the hides stay at the right temperature (anything above 10°C would ring alarm bells). The whole operation requires high levels of trust and top-class communications, but also, it seems, an element of toughness on the buyer’s side.

Adriaan Hendricks explains: “I’m not prepared to pay for excess baggage. I don’t want tails and other appendages on the hides. Ten years ago, I started up my own penalty system, adding up the cost of these things in a consignment. I understand that the abattoirs and hide traders sometimes have seasonal workers and that sometimes their people are working at night with less supervision, that they’re tired and want to get home. But I pay per kilo, so I weigh all the extra bits in a consignment and if the cost is more than E100, I claim the whole amount back. It was war at first, but it has paid off. I don’t want to claim, but I do want suppliers to improve their trimming standards, so I wish more tanners would do this. Suppliers have come and looked at the system and have agreed it’s fair. They can see how important this is, how much money is involved.”

He points out that he hasn’t had to submit any claims at all in the last six months, but still lets each supplier know exactly how they’ve done under this assessment method to keep them on their toes. All the hides from one consignment stay together until after wet blue, so there is plenty of opportunity to put together feedback on quality. From this, and from his years of visiting and building up trust with suppliers, he has compiled a ranking of 21 potential providers of fresh chilled hides, but only nine of these are currently sending hides to the tannery. They all know the position they occupy in the ranking.

New possibilities

It’s a strategy that has also opened up wet blue and wet white possibilities for Hulshof Royal Dutch Tanneries. Because of the quality of the raw material, tanners in other parts of Europe who are experiencing strong demand from, particularly, high-end automotive customers, are keen to have Hulshof wet blue or wet white to finish. “Beamhouses are disappearing,” Mr Hendricks says, “and this gives us extra opportunities for the near future. A big part of our beamhouse production is being sold as wet blue or wet white; that’s where the growth is. We’ve invested in our raw materials sourcing strategy and in our beamhouse and now opportunity knocks. We’ve invested, now it looks as though we will be paid back. To be a high-quality end supplier of wet blue and wet white will be more and more our position. But we want to be genuine wet blue partners, not just contract tanners.”

The aim at the Lichtenvoorde facility is to try to get the highest possible yield from the hides it brings into its beamhouse. The investment in big machines is high (see technical sections for more details) and the purchase manager explains that the company looks to its machinery and chemical suppliers to share their knowledge to make sure each machine works as well as it possibly can in the Hulshof set-up. “The machines should be long-lasting and focused on our type of production,” he adds, “high-value, large surface hides for upholstery applications. The technology has to be equipped for this task.”

Hulshof only tans the grain split. As well as passing belly and shoulder splits to the Collapro spin-off, double-butt and croupons are made available to other tanners. “We only want the kind of quality the grain of the bull hide can give,” Mr Hendricks continues. “For us there’s no use in buying cow hides because we don’t want to get into a price competition with tanners in China.”

Special care

There is a quality consideration in the new focus on the food industry. Dr Hulshof explains that an important implication for the tanning side of the business is that hides have to be handled in keeping with food safety regulations; the hides require special levels of care, but helps his company produce higher quality leather.

The hides’ freshness and food-safety levels of hygiene are a help in Hulshof’s relations with the local community. The tannery is in a busy, residential part of Lichtenvoorde, surrounded by houses, shops and other businesses. This is the third location the company has had in its history; two previous sites, even closer to the historic centre of the town, were short-lived because of gentle pressure from local people. When it moved to its current location, there was only farmland in the immediate environs. In the 1970s, new houses went up on that land, the closest of them only 30 metres from the tannery’s effluent treatment plant. Odour control was an issue in the company’s attempts to maintain good relations with its neighbours and was one of the main reasons for setting up the pipeline and the new effluent treatment plant two kilometres away. The segregation of the main processing streams has helped eliminate any odour problems. The current building, with an attractive brick front, dates from 1919 and is quite an icon in the town. 

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