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Chennai, Jan. 25

LEATHER exports during the current year are on target. The industry needs to attract new investments and funds to expand capacities and sustain growth.

Dr K. Elangovan, Executive Director, Council for Leather Exports, said that leather product exports had touched $1,430 million between April and October in 2005-06 against exports of $1,357 million during the year-ago period.

Dr Elangovan was addressing newspersons here on Tuesday ahead of LERIG 2006, the leather research industry get-together an annual event initiated by the Central Leather Research Institute (CLRI).

In 2004-05, exports had reached $2,379 million and the industry is confident of achieving its target of $2,675 million in the current year, Dr Elangovan said.

Footwear exports led the growth in the current year with a 15 per cent increase to $856 million in April-October ($515 million). Dr Elangovan said that the industry expects growth to touch 18 per cent by March 2006, when the Christmas orders would be considered.

Leather goods exports were $569 million ($354 million) and the target of $650 million would be reached, he said. Leather garments strike a sour note with a slump in exports $185 million ($319 million).

The reason is that India caters to the mid-market segment that offers a realisation of about $50 a garment and its market is being eroded by competition from China, which is expanding into this segment from its traditional low-end $30 segment. The up-market $70 segment continues to be with Italy, he said.

The consolation is that globally, trade in leather garments has declined. This is due to the availability of cheap synthetic alternatives. People are looking at options other than leather while shopping and climate change is lowering leather garment sales, he said.

Dr T. Ramasami, Director, CLRI, said that the industry and institute have identified "global repositioning of Indian leather products" as the theme for this year's event. They will frame strategies to exploit the export market.

The plan will be to attract large investments into the leather sector, garner capital for existing manufacturing houses to expand capacities and integrate the domestic market with the export segment.

Small players have largely dominated the domestic market and quality has suffered, said Dr Ramasami.

(This article was published in the Business Line print edition dated January 26, 2006)
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