As one of the biggest and longest established full-service tanneries in the northern Italian cluster of Arzignano, Gruppo Dani has grown into the role of an ambitious and pioneering company, determined to uphold the quality of ‘Made in Italy’ while making continuous progress in sustainability and in communicating openly with the outside world.

It runs full-service production, one of the few companies in Arzignano that does so these days, making at least 97% of its finished leather from raw bovine hides, which the company sources—fresh when possible, salted when not—from southern and northern Germany, from Scandinavia, the UK, Ireland, Spain, Switzerland. Relationships between tanners and raw material suppliers are changing, Mr Dani believes. Companies such as his are much more inclined to talk directly to big packer firms now, rather than rely entirely on specialist traders, and bring in more hides directly from the abattoir. He describes this as a way of making the leather value chain shorter. This is already happening today, he insists; big beef companies are developing closer relationships with tanneries and in some parts of the world, notably in the Americas, it’s perfectly normal for the big packer firms to run their own tanneries. “They’re trying this in Europe too,” he adds, “but I think so far they’ve just seen that running tanneries is not so easy in Europe."

The remainder of production at the moment is devoted to deerskin, specifically white-tailed deer from North America, with each skin yielding between eight and nine square-feet of leather. It currently has around 500 employees and a turnover of approximately E140 million, with 30% of its output staying inside Italy, 40% going to other European countries and 30% to the rest of the world. The company invests about 1.5% of its turnover in research, development and innovation projects.

Gruppo Dani has two separate production units, about one kilometre apart in Arzignano. The newer of these is Dani Automotive, established in 2009 after the group acquired the premises of a tannery that had gone out of business. It has its own wet end producing wet white rather than wet blue for retanning and finishing. Around 40% of Dani Automotive’s output at the moment goes into steering-wheel covers, which have to be resistant to light, including the inner areas that are only visible through the perforations automotive brands prefer leather steering-wheel covers to have. This is a challenge that has become easier to meet since the recent advances the big leather chemicals manufacturers have introduced in the last two years to the processing of wet white hides, according to the general manager of Dani Automotive, Valerio Mazzasette. It is progress he is happy to have witnessed, believing as he does that economies need people to make things, that it has been “a disaster” for European economies to become so reliant on banking systems, and numbers and pieces of paper. “Even after 20 years in this industry, what I still like best is to come to the end of the tanning hall at the end of the working day,” he explains, “while the drums are turning and everything is scrubbed clean.

It’s the most beautiful sight.”

The older production line works from raw through to chrome-tanned leather for customers in the furniture upholstery, high-end leathergoods and footwear sectors. In addition, the group has sales offices in Flanders, New Jersey, and in Guangzhou in China, which hold stocks of finished hides in a wide range of colours for client organisations in those markets to use in a range of applications--mostly furniture, automotive, aircraft and marine interiors for the US and furniture and footwear for China.

Complete cycle

The group sources an average of 5,000 hides per day, 100,000 per month. At the moment, 60% of this raw material is going into wet blue production and 40% into wet white. Gruppo Dani is committed to preserving its status as a full-service tannery and is pleased that the Italian tanners’ association Unic has developed, in addition to its ‘Made in Italy’ label, a separate label for leather made from start to finish at a single full-service tannery, ‘Made in Italy Full Cycle’. “This guarantees continuity,” Giancarlo Dani explains, “and that’s important. We’ve all seen the stories of members of the public complaining of skin reactions after sitting on leather furniture. It means it’s important for us to control the full cycle and always to deliver the same quality. Plus, it’s certainly the case that if you have good tanning at the wet end you stand a better chance of producing good finished leather. So we want to manage the whole process. We want to control the chemicals used to make our wet blue. We want to be sure of their quality and make sure we tan with the same recipe to guarantee that continuity. We’ve seen some competitors compromise on this and they have had a bad experience. Just doing wet blue to finished leather meant losing quality and losing their means of differentiating their product. You leave yourself more vulnerable to copying that way. Work on a hide from the start and you get to put your stamp on it, you can make it distinctive, make it yours.”

Customers know

A guarantee to the customer is one of the things that sets Italian leather suppliers apart, he says, referring again to the sector across the country rather that just to his tannery. Customers know what goes in and know that what comes out will be good because the skills, the quality chemicals and the know-how are all here. Yes, labour costs are higher than in many leather-producing countries, but he insists that, across the global industry, labour contributes only 8% and 10% of the total cost of a finished hide and that any saving you make can easily vanish because of lower productivity. Plus, if you are further away from the main chemical suppliers (most of whom are in Europe), you will need to tie up capital in a big warehouse and hold a lot of buffer stock in case chemical supplies run short. All that inventory adds cost to your operation too. Finally, tanneries in Arzignano have an advanced common effluent treatment plant at their disposal, which means a further saving compared to a tannery that works in isolation and has to build and maintain its own waste management operation.

In a similar way, many of the world’s most prominent tanning machinery manufacturers have their base in and around Arzignano and relations between them and tanners such as Gruppo Dani are well established. One of the main advantages of proximity to the machinery suppliers and good relationships with them is the possibility for customising particular machines. This happened with a fleshing machine supplier in the Gruppo Dani tannery, made to suit the company’s particular needs some years ago and continuously improved and modified as time has gone on. Likewise, setting machines have helped the tannery to production by increasing the area of each hide that it is able to turn into finished leather, Giancarlo Dani says. “We’re in continuous dialogue with these companies,” he continues. “We all want to improve production and lower costs. We are waiting for a renewal in liming and unhairing, which could change the kind of drums we use. We will invest in new technology if the benefits are clear.”

“I like Made in Italy,” Mr Dani says with a smile. “You can always find reasons to move away, almost always related to cost. But those who have tried always seem to find reasons to move back. Made in Italy means having control of the whole production cycle and it means a guarantee of quality and continuity.” Companies can always do more to promote leather as a material of choice, he accepts, but just as charity begins at home, his feeling is that tanners and leather-focused consumer-product brands have to invest first in improving their own performance. Investing individually can help the collective effort, he says. “To sum this up in a few words,” he says, “we love leather. Our investment in sustainability is a demonstration of this passion. Our philosophy is that we really believe in what we are doing now, and that we are determined to do even better in the years ahead.” 

A visit from the neighbours

For a town so long associated with the tanning sector, Arzignano and the surrounding area still seems to have plenty to learn about what goes on behind the gates of the production facilities. One Sunday in May 2012, Gruppo Dani took part in a local project called Fabbriche Aperte (Open Factories). Families with children, people who had lived in and around Arzignano all their lives came to take a look; many had never been inside a tannery before and felt that Dani’s automotive production line, the one that opened up for the day, looked more like an operating theatre than the stereotypical view of a tannery.

Excellence is the word Giancarlo Dani uses to talk about the Italian tanning sector in general, not just his two production lines. “We are very proud of this,” he says, “we have it in our blood. But for far too many years tanners (in general, not just us) were reluctant to tell their stakeholders about what they were doing. Everything was internal. But now we want to share this and communicate it externally. Italian leather is a luxury product; we are proud to show it to people.” But the term excellence applies directly to Gruppo Dani; Giancarlo Dani received an award for excellence in innovation in June 2011 from the president of Italy, Giorgio Napolitano. This was a moment of great pride, the tanner concedes modestly, and he has stopped to reflect more than once in the intervening 12 months on how pleased his father would have been by this accolade.

Environmental responsibility

The Dani quality manager, Guido Zilli, points out that a change has occurred in the way companies here, as in many parts of the world, view environmental management now. It used just to be a burden, a responsibility to be met, legislation to comply with. Then, a few years ago, some companies began to view environmental good practice as an opportunity. Tanneries in Arzignano are lucky, he says, to have the benefits of the common effluent treatment plant. It’s a testament to a collective approach that first came in in the late 1970s and 1980s and represents, Mr Zilli insists, best practice at a European level.“ The [EC IPPC] BREF in Seville has called the common effluent treatment plant in Arzignano a beacon for water treatment,” he says. Another positive development is SICIT, a company owned by a collective of local entrepreneurs that turns fleshings into fertiliser. In 2009, the authorities in Italy put together a ranking of ‘eco-districts’ in Italy. Arzignano came fifth overall, but it came out top among the country’s leather clusters and the main reason for this, according to Guido Zilli, was the collective approach that now reigns. “There is more we can do,” he says, “and we will increase our efforts, but, in spite of the length of time the common effluent treatment plant has been running, people were still producing without thinking about the environment as an opportunity. I would say real collaboration here only began four or five years ago, and I would also say it started thanks to the efforts of a real pioneer, Giancarlo Dani. He has a genuinely long-term perspective, and he lives here.”

The company now has ‘Sustainable Leather’ on its logo, which it justifies by having figures for greenhouse gas emissions throughout its supply chain, from livestock farms to the delivery of finished leather to its customers. This is far from easy. For example, do you calculate the carbon footprint from the cow or from the hide? If you link it to the food industry, you have to include the impact of the agricultural parts of the chain. If you regard the hide as waste, you can start from there because, as Guido Zilli puts it “waste has no memory”. He would like this debate to become wider and for more data to become available. Gruppo Dani also has certification from international bodies such as the Swedish-run organisation that helps companies make an Environmental Product Declaration for its leather, and from German organisation Der Blaue Engel and Golden M. It says the Blaue Engel certification, established in Germany, was the most difficult to achieve, and that Germany is “a generation ahead” of Italy in these matters.

Signs of change

Nevertheless, there are signs of change in Italy. Recent invitations to bring the Sustainable Leather concept to the attention of a wider audience have included participation in an event held in Milan at the end of May called Dal Dire al Fare (literally “from words to deeds”) to celebrate Italian companies’ commitment to manufacturing high-quality products in the most sustainable way possible. Following this came opportunities to present at the conference at the Automotive Interiors Expo in Stuttgart in June and a workshop arranged in Treviso at the start of July by the umbrella organisation for Italian chambers of commerce.

Giancarlo Dani says it has been “new and surprising” for a tannery to take part in such events. He says there is awareness among  leather producers that this is an industry that has an impact on the environment, but insists these invitations indicate recognition that it is working hard to reduce its impact. He talks about all this as an “enrichment of management choices” that has come about as a direct result of making a commitment to producing leather in a way that transparently aims to reduce impact on the environment. What it can lead to, he believes, is a stronger set of relationships between tanners and the companies that use their leather.

“We carry out a customer survey every year,” he explains, “asking people how satisfied they are with the quality of our leather, with delivery times and so on.

“This year, working with a team from the university of Padua, we also wanted to evaluate how interested customers and final consumers are in sustainability. We wanted to know how much our customers, and how much they consider their customers, want the leather they choose to be sustainable. The results were encouraging, especially from European customers. They showed us we are going in the right direction. Now we have to find the right way to communicate this to the wider customer community. We want to avoid being considered as a commodity. We want to be much more than that.”

More than a supplier

Marketing and communications manager, Paola Molon, describes this quite simply: she says it’s about being not just a supplier, but a partner. She has hopes that a small group of customers will engage in joint communications including mutual links on corporate websites and printed material to make an impact on the final consumer in retail outlets. So far, Gruppo Dani has had an extremely positive response from organisations such as exclusive automotive manufacturer Pagani and Dutch high-end furniture brand Leolux. The Modena-based car company has highlighted Gruppo Dani as one of its partners for the amazing Huayra sports car, which it launched at the 2012 Geneva Motor Show (where it took pre-orders for 18 cars). Pagani only makes 40 cars a year and customers have to be content to wait for their own vehicle. However, one of the pluses is that they get to specify exactly the colour of leather interior they want (sometimes leading to the curious exercises finishing departments in many tanneries are familiar with: having to match the finished leather to the colour of favourite shoe and other day-to-day objects). Meanwhile, Leolux will engage in a programme to promote sustainable leather from Dani to a group of around 80 retail customers in its home region, the Benelux countries. “The response of our customers has impressed us,” she says. “One even responded to the suggestion by saying, ‘At last; a company with a vision.’

Ms Molon says that, contrary to mainstream opinion, not all the news from the furniture industry in recent years has been bad. High-end manufacturers are doing well. Leolux, for example, has said that its sales in the first half of 2012 are stable, but that it is anticipating growth in the second half of the year, with most of the focus on the Benelux market. Italian furniture companies may be exporting most of their output these days, because of the prevailing mood of austerity in their domestic market, but life goes on for them too. Small, high-end furniture manufacturers across Italy appreciate being able to order minimum quantities of just one hide at a time if they want to work on a product prototype, and being able to choose from nine articles in more than 300 colours from the Gruppo Dani finished leather warehouse; order one day and receive delivery within 48 hours.

People from all over

Gruppo Dani employs 500 people in Arzignano, but more than half of them come from outside Italy. The proportion of employees born in Italy is now 44%; 25% of the whole workforce is from Bangladesh, although they were in the region already (Dani didn’t travel to Asia to recruit them). There are also substantial numbers of people from Africa and from eastern Europe. The company says it is working to build a structure to increase integration among workers from different backgrounds, but its starting point is that all its workers are entitled to their own culture and their own beliefs. No one will ask them to leave their private lives at the door when they come onto the Gruppo Dani premises. Everyone brings their own values to work; most of these values are common to people from all parts of the world.

Like many parts of northern Italy, Arzignano is a diverse community now, something for which Paola Molon says the tanning sector must be grateful. “It’s not so easy to find local people who want to work in the leather sector now, unfortunately,” she explains. “And you can see that many of our younger workers in particular are from overseas.”
The group is making a total of 7,000 hours of training available to its workforce in 2012, up by 1,000 hours compared to 2011. Safety in the workplace and quality issues are important training topics, as are communication and team-building. Other options are training in lean thinking and lean production from experts at the University of Padua.
“In committing ourselves to these developments, I hope we can be an example for tanning companies in the future as the industry moves forward,” Giancarlo Dani concludes. “We don’t want to be special. We just want to be considered a business with a vision for the future.”

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