Says production costs will go up; seek quality infra, testing labs

Leather goods manufacturers expect a sharp rise in their cost of production following the State Budget proposal for a hike in VAT rates.

According to Tapan Nandi, Regional Chairman, Council for Leather Exports (CLE), the Bengal Government’s proposal to slap one per cent higher VAT will have a negative impact on the working capital of the leather units in the State.

“There are issues over getting VAT refund in time,” Nandi said here after a press conference to announce the International Leather Goods Fair.

Lack of infrastructure

The West Bengal leather industry does not have adequate infrastructure.

According to him, the 1,100-acre integrated tannery and leather goods manufacturing complex at Bantala near here took longer than expected to become operational. After 12 years of project implementation, it is only partly functional. “Though the infrastructure for the tannery section is ready, infrastructure building at the manufacturing segment is still inadequate”, said an industry source.

Nandi added that lack of proper quality testing labs for leather goods in India has been plaguing the industry. “Lack of infrastructure for manufacturing leather goods in the country has always made our products less competitive than other (mainly European) countries,” he said.

Leather Goods Fair

To be organised by the India Trade Promotion Organisation (ITPO) in collaboration with CLE and Indian Leather Products Association (ILPA), the fair would be held in Kolkata from March 15 to 17. The two-day fair is expected to see a 40 per cent growth in business this year. Shankar Dawn, President, ILPA, said, “Last year, the fair generated business worth Rs 6 crore. It is expected to increase to Rs 10 crore this time.”

Some 56 companies, majority of them from the eastern region, will participate in the fair. Delegates from 40 countries are likely to attend the event.

Branding workshop

To train the domestic leather goods manufacturers in branding exercise, ILPA has planned a workshop in Kolkata in June. At the workshop, international branding experts and designers would train the domestic manufacturers, Dawn said.

ayan.pramanik@thehindu.co.in

(This article was published on March 14, 2013)
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