" AUSTERITY MANTRA " NEEDED FOR THE LEATHER INDUSTRY

“AUSTERITY MANTRA” NEEDED FOR THE LEATHER INDUSTRY
V. M. KHALEELUR RAHMAN

The leather market is on the move as ever but of course with a slow pace. While big exporters are having some orders, small exporters are endeavouring their best to get contracts for survival. The general feeling in the market is that getting orders at workable prices for shoe as well as garment leathers is not less than a Himalayan task. The overseas customers are choosy in their operations as their demand is restricted and confined to only some limited quantities in certain high quality leather items produced by well established leading tanners and exporters. The days of having orders for any items and by any exporter are gone.

The fact is that good demand exists only for certain items like sheep cabretta, nappa, lining etc. Goat upper and lining leathers are also in demand to some extent. In cow hides while there is good demand for higher selections, lower selections are very slow in movements despite considerable price reductions. The business concluded during the past one month for export can be considered only as insignificant. As reports indicate there is about 30% reduction in the total exports of our country. In spite of best efforts by the government and industry, growth and exports are not on expected lines.

The following are the price indications for some leather items which are of permanent interest and contracted regularly:

1) F/C goat upper leather, 3/5 or 4/7 sq.ft. ABC Price: US$2.00 / per sq.ft. C&F by sea
2) F/C goat lining leather, 3/5 or 4/7 sq.ft. TR1 Price: US$1.10 per sq.ft. C&F by sea
3) F/C sheep nappa leather, 5/7 sq.ft. ABC Price: US$2.50 per sq.ft. C&F by sea
4) F/C sheep lining leather, 4/7 sq.ft. TR1 Price: US$1.30 per sq.ft. C&F by sea

There are also reports of foreign customers preferring non L/C business at terms unworkable for exporters here. Indian exporters are also facing a stiff competition from their counterparts in countries like China, Pakistan and Bangladesh.

Some exporters are also facing either delayed or non-payment of their export bills. The Council for Leather Exports can do well to publish the list of the overseas importers who are not trustworthy and creating problems in business as it will enable exporters to be cautious while negotiating contracts.

In the local market many small tanners have given up making E.I. tanned and crust leathers due to present unfavourable, rather difficult situation. They say that not only the business is unworkable but getting payment is also not easy as they have to wait for at least 3 to 4 months for cheques.

Tanners in places like Erode who are mainly producers and suppliers of wetblue cow hides are also in a tight corner with huge unsold stocks at their disposal. Shoe manufacturers who used to cover their requirements from these centres are now slow in their purchases.

As far as the shoe sector is concerned, there is good demand for shoes and shoe uppers from some of the regular customers but the business atmosphere is not what it was before. An industrialist pointed out that “we are yet to come out from the impact of the recession and perhaps it will be there till the world scenario changes for the better.”

Some shoe manufacturers are also planning to open their show rooms for marketing their products under their own brand names. It is well known that some big export oriented shoe units have already established and are running their show rooms successfully in some places in our country.

AUSTERITY MEASURES
Thanks to the controversy surrounding the external affairs minister Mr. Shashi Tharoor on his jovial and not serious "cattle class" comments about the economy class in flights, heated discussions are taking place about the important but neglected subject "austerity" which was once a laudable concept of Mahatma Gandhiji for liberating our country from the foreign yoke, maintaining its cultural and traditional heritage, safe-guarding its unity in diversity and making it self-reliant and self-dependent. Though we did not forget the name of this great man, the father of Indian nation, we forgot his ideals and started doing things in all spheres contrary to his noble thoughts and practices perhaps under the wrong impression that changed times do not require past notions. He was the real leader of the masses by leading a simple life with high thinking in accordance with our national ethos. It is necessary for our governments at the centre and in the states to revive his philosophy and see to it that at least some of his ideas like establishing cottage industries in villages are implemented for the benefit of the people. India is a country of villages. There are millions of people in our country whose daily earnings are unimaginably very low. The leather and leather products industry has the capacity and potentiality of playing an important role in this arena. Some inroads have already been made in some places. But it has to be done in a big way.

One feels that the austerity measures proposed by the union government for the ministers for preferring economy class etc. are in the right direction and should be welcomed by one and all particularly in the present recession hit period. It will be in the interest of the leather industry to follow it not only in foreign travels but in everything. A good planning and its proper implementation without any waste is also a part of austerity. We see even the developed countries like the U.S. and U.K. trying their best to cut their wasteful expenditures. During a discussion a tanner pointed out that there is an urgent need for all of us to be austere in every walk of life and more so in the industry related matters. The Council for Leather Exports and other trade associations can do well to plan and propagate austerity measures which are necessary for the leather and leather products industry. (VMK in Indian Leather, October 2009 issue)
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