The Hindu Business Line : Conceria Virginia Chennai to start leather processing

CONCERIA Virginia Chennai Pvt Ltd, the joint venture between the Chennai-based Forward Group and the Italian Conceria Virginia for tanning, will start processing leather within a month, according to the Forward Group's Managing Director, Mr Muhamad Yavar Dhala.

The plant has a capacity to produce about 6 million sq ft of leather. In 2005, it is expected to make about 3.6 million sq ft leather that will generate revenue of about Rs 35 crore - Rs 40 crore. It will reach full capacity in the next year, Mr Dhala said.

It will use imported raw material to produce superior quality leather that leading European brands prefer. The leather will be sold locally to exporters. The tannery will use imported cow leather in raw material form — wet blue to produce leather for shoes and leather goods.

The project outlay is put at Rs 20 crore, including Rs 12 crore as equity. It is an equal venture between the two partners.

The market for superior quality leather is on the rise with developed countries increasingly looking to India for leather products manufacture. In the last year more investments have gone into the leather industry than in the previous three to four years. Footwear components manufacturers are shifting to producing whole shoes for the international markets, particularly the US, Germany and the UK, according to Mr Dhala.

Apart from the traditional markets more European countries are looking to India for finished products. The Forward Group is also looking to expand to generate greater demand for quality leather. Further, India's import share into these countries was low and there was scope to increase its share, he said.

The Forward Group has invested in manufacturing facilities for high quality components with various international market leaders. Last year, it doubled its production capacity for shoe soles to two million pairs a year through its joint venture with Suolificio Malaspina, an Italian manufacturer.

Thus, through these joint ventures the Forward Group is making available international quality components for shoe manufacturers. Not only will it help bring down costs but also make the components available at a short notice, thus helping them stick to schedules, he said.

The Forward Group is expected to end this financial year with a turnover of Rs 150 crore, which will be a 34 per cent growth over last year, according to Mr Dhala. The group has two other tanneries apart from a whole shoe manufacturing facility with a capacity to produce about 6,000 pairs a day.

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