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Tuesday, Jun 22, 2004

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After nine years, only 15 units ready to do business — Relocation pangs of Kolkata Leather Complex

Indrani Dutta

Kolkata , June 21

NINE years should have been considered sufficient time for any major relocation project. But not so for the Kolkata Leather Complex (KLC). Rounds of controversy, demonstrations and parleys later, it seems that only six tanneries are set to commence operations.

State Industries Department sources said that about 15 tanneries have completed their construction at the site and were awaiting various clearances. Of these, nine were fresh investments, while only six had relocated from their original sites within the city. Altogether 330 had been allocated land at the project.

The Industries Secretary, Dr Sabyasachi Sen, said that efforts were on to declare the project operational once the 15 tanneries received all their clearances and commenced production. "We are trying to activate the project," he said.

Many of the tanners who had relocated to the site, 25 km downtown, told Business Line that they had finished construction at the site and were now awaiting the clearances from the West Bengal Pollution Control Board (WBPCB). Mr Ramesh Juneja of Indian Tanning Industry said that he was now awaiting WBPCB nod.

It may be mentioned here that in 1995, the Supreme Court had passed an order on the relocation of 598 tanneries located in the Tangra, Tiljala and Topsia areas of eastern Kolkata on pollution control grounds.

While the tanneries at Topsia, accounting for 40 per cent of the production had capability to manufacture good products with forward integration, those at Tiljala were dominated by family-based units with small investments that turned out poor products.

In most cases obsolete technology was used. The disorganised nature of the industry and the absence of any umbrella organisation made any relocation difficult even after the State Government moved in to enforce the apex court order and appointed a private sector promoter to build the project.

The State Government had, in the meanwhile, identified a 1,100-acre low land in Karaidanga in eastern Kolkata to relocate the city's tanning industry, hoping to restore at least a part of the earlier leading position held by the State in the country's leather industry map.

West Bengal, which now has the third highest tanning capacity buys skins and hides from Bihar, Uttar Pradesh and Orissa. The tanners supply their products to New Delhi, Agra and Tamil Nadu, besides exporting. Three shoe majors including Bata source their supplies from the local markets.

However, while the leadership position was gone for decades now, the third slot too came under threat as the Supreme Court set a March 1, 2002 deadline for either relocating or shutting shop.

Although 26 months have passed, very few tanneries have actually shut down.

With the fate of 25,000 people and their families (many of whom were from the backward classes and minority community) linked with the fortunes of this industry, many tanners chose to buy hides from outside and continue production.

Mr Juneja, who uses his raw hide processing capacity for captive consumption, said that he was now carrying on production by buying hides from Kanpur.

With exports from the region too getting jeopardised, the Council for Leather Exports formed a steering committee bringing together the tanners for negotiating with M.L. Dalmiya & Co to whom the State Government had awarded the Rs 350-crore KLC project on a build-own-transfer (BOT) basis.

Tanners who have till now failed to begin construction at the site said that there was no funds support for the relocation and their efforts to mortgage the land that they were acquiring drew a blank as two Government departments — land revenues and industry — were still squabbling over the issue.

"Relocating tanners face competition from tanners who were making fresh investment," remarked a tanner fearing that there would be an overall reduction in tanning capacity of the industry from this region. The region is now estimated at about 800 tonnes of processing capacity per annum.

Dr Sen said that commencement of production would mark the second stage of the project. The activities within the complex, according to sources in M.L. Dalmiya & Co, includes the entire leather industry starting from basic raw material units to tanning and finishing leather, chemical and machinery units as also units producing leather products - which is the forte of the eastern region. There are also plans for a housing, hotel and shopping complex. Sources said that till now Rs 180 crore has been spent on the project.

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