The Hindu Business Line : Leather exporters focus on finished goods

THERE is reason for optimism among the leather products manufacturers as there is an overall growth in the sector, which is expected to hold in the foreseeable future.

Between April and September 2004 there has been a positive swing in exports of finished leather, leather footwear, garments and goods. Exports in these segments will continue to grow with developed countries increasingly dependent on imports, say industry experts.

Footwear components export has declined, but that is no cause for concern; the industry is now exporting whole shoes rather than parts of shoes. It is for this reason that exports of leather from the South have also shown a slight drop. There is a shift towards exports of finished products rather than components.

The Chairman of the Council for Leather Exports, Mr Rafeeque Ahmed, told Business Line that the overall growth up to March would be maintained at about 15 per cent. The outlook for the coming year was more optimistic, and the growth rate would increase by a few more percentage points.

According to a leading exporter, Mr Yavar Dhala, Managing Director, Forward Shoes, this shift is happening as anticipated by the industry. With the US and Europe exiting from manufacturing leather products, the gainers are countries such as India, China and Vietnam.

The major markets continue to be the developed countries - the traditional market. Some of the emerging markets are Spain and Italy, and to a smaller extent the West Asia, where there is high growth because the industry is starting from a small base.

During April-September 2004, the southern region continued as the leader in export of leather and leather products, with a 43 per cent share in exports. Exports from this region have grown to Rs 2,264 crore during April-September 2004, up 6 per cent from the corresponding period in 2003 when its exports were Rs 2,129 crore.

Exports from the northern region, whose share of exports is 15 per cent, have grown to Rs 805 crore from Rs 537 crore, a growth of nearly 50 per cent. From the Eastern region, which has a 16 per cent market share, exports touched Rs 871 crore from Rs 720 crore, a 20 per cent growth. The growth in the North and East is primarily from their focus on low value/mass-market products, which they have also marketed aggressively, said Mr Dhala.

Export of finished leather touched Rs 1,286.58 crore between April and September 2004, an increase of more than 5 per cent over the corresponding period in 2003 when exports were around Rs 1,222 crore. Leather footwear exports were up nearly 14 per cent at Rs 1,241.35 crore (Rs 1,090.05 crore); leather garments exports increased by 14.5 per cent to Rs 779 crore (Rs 680 crore); leather goods export increased by 20 per cent to Rs 1,277 crore (Rs 1,065 crore) and saddlery and harness increased 22 per cent to Rs 133 crore (Rs 109 crore).

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