Discussions at the 2020 Indian International Leather Fair (IILF) in Chennai suggest the Indian leather industry has readjusted its thinking and is now aiming to meet a 5% growth target this year.

The leather industry still occupies a prominent position in the Indian economy. With an annual availability of approximately 3 billion square-feet, India accounts for 13% of the world’s leather production. The export of leather, leather products and footwear reached a value of $5.7 billion in the most recent financial year of 2018/2019, down slightly from the previous year’s figure and short of the projected 7% growth. In a move to improve the capacity to produce more finished goods, the Council for Leather Exports (CLE) has been in talks with the state government in Tamil Nadu and has identified a location approximately 200 kilometres from Chennai for setting up a new project for the leather industry in the form of ‘plug-and-play’ factories. The government will provide the land and other basic infrastructure. “Approximately 100 acres of land has been identified for new facilities for the manufacture of footwear, leathergoods and accessories. This offering from the government reduces the investment required, particularly in this financial climate, for entrepreneurs and enables them to start up very quickly,” Israr Ahmed, CLE regional chairman for the south told World Leather. An investment promise of $100 million dollars has already been committed by existing businesses to invest in the park. The Tamil Nadu government has also been putting on roadshows in Taiwan and China to generate interest among possible partners to bring new expertise to the parks in the manufacture of women’s and athleisure shoes, growth areas that India would like to move into. 

Expansion plans

Speaking at a press meeting, Indian Trade Promotion Organisation (ITPO) executive director, Rajesh Agrawal, said that there was huge scope for the leather industry in terms of both domestic and export sales. For this growth to take place, global brands and retailers need to be brought to India to allow manufacturers there to showcase to the world what is possible. He said this would also allow Indian companies to learn from global partners and build stronger relationships. To this end, and continuing with plans that have been in place for almost five years, the Chennai Trade Centre (CTC) is to be expanded, a project that will see the built space of the exhibition venue increase by 6,000 square-metres. Land is available for the expansion, after which the total built area of CTC will increase to 20,000 square-metres. Mr Agrawal said the expansion would accommodate up to 700 exhibitors and was likely to be completed by 2022, in time for the 37th IILF.

This year’s IILF took place in the first week of February and again saw more than 450 companies exhibiting, including 150 from outside India, representing a 16% increase on the previous show. More than 20 countries were represented, with Germany, France, Italy and Brazil again setting up their own pavilions to allow their companies to connect with existing Indian customers and to generate new business leads. The event saw in excess of 15,000 visitors. The mood at the show, although slightly overshadowed by the outbreak of the Coronavirus in China, was positive. Attendance on the first day seemed to be very good and the decision-makers were certainly there. “This year was better than last year and there seemed to be more of a vibe. We’ve had some good discussions. Kanpur is a large market for us, with India being our largest after China. Things seem to be starting up there again having been shut down last year,” said Nigel Dunning, business manager for the Mimosa Extract Company. For the new decade, the Mimosa Extract Company, whose parent company NTE Company (pty) Ltd celebrates its centenary this year, is optimistic about increased interest in chrome-free leathers and has plans for future innovation.

Speaking with Pierre-Antoine Gualino, managing director of ATC Leather Chemicals, the message was very similar. ATC has a manufacturing facility in Pondicherry and sees India as its third-largest market. “Tanneries we work with are now at about 50% capacity and we hope to see them at full capacity by March,” he said. “There is optimism in the market”. Moving into the new decade, ATC is working hard with its customers to consider environmental processing, particularly in the beamhouse operations. To this end ATC hopes to become a member of ZDHC later in the year.

International markets

Exports of leather, footwear and leather products saw overall decline during 2018-19. Previous years of growth with the EU came to an end in the period concerned, April 2018 to March 2019. That said, the EU continues to be a major export market accounting for an approximate 50% share. On a more positive note, exports to the US have risen by over 5% to a figure of $893 million, giving a 15% share of total export value. In total, a decline in value of 0.9% was recorded in US dollars, although in local currency there was growth of 7.5%. 

Market promotion

During the year 2019-20, CLE organised 12 overseas marketing events with support from the Market Access Initiative Scheme (MAIS) of the central government’s department of commerce, with three more events to be organisethis March. In addition to these, nine overseas events were organised during 2018-19 on a self-financing basis, while two overseas events were organised with the support of the ministry of micro, small & medium enterprises (MSME). These marketing events covered major and potential markets in 13 countrie—namely the US, Germany, China, Vietnam, Russia, Chile, Peru, Bangladesh, Australia, Japan, Hong Kong, Italy and Poland. 

Raw material meet

Now in its third year, CLE-sponsored B2B meetings took place between members who had pre-registered and international suppliers of raw material. By matching the requirements of members as indicated by them in pre-registration forms against raw materials being offered, one-on-one meetings were held. This year, new suppliers from Angola, France, Senegal, Serbia and Armenia joined the event that saw 29 suppliers from 16 countries meet at a Chennai hotel. The event was inaugurated by Ms Alka Arora, joint secretary of MSME. The organisers were expecting approximately 70 visitors that had already registered with another 30 expected to arrive on the day.

Designers fair 2020

Growing for the fifth consecutive year, the design show saw its largest ever participation with 51 designers coming from 46 design companies and institutions. Of the nine overseas countries exhibiting, France and Spain were newcomers to this year’s event. Speaking ahead of the inauguration of the event, P R Aqeel Ahmed, chairman of the Council for Leather exports, said: “Design is the key factor in any marketing strategy.” The organisers were keen to build on the success of the 2019 event at which 200 visitors attended over 900 meetings, generating over $600,000 worth of business.

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