Leather Industry In India

Introduction
Leather Industry occupies a place of prominence in the Indian economy in view of its massive potential for employment, growth and exports. There has been increasing emphasis on its planned development, aimed at optimum utilization of available raw materials for maximizing the returns, particularly from exports.

The leather industrial sector comprises of: a) Tanneries (where raw hides and skins are converted into leather) b) Factories transforming leather into a variety of consumer products such as footwear, garments and outerwear, and assorted leather goods such as wallets, passport cases, key chains, handbags and brief cases. Apart from the quality of raw material, the process of its conversion into leather

 Today this industry ranks 8th in the export trade in terms of foreign exchange earnings of the country India is largest livestock holding country. The Indian leather sector meets 10% of global finished leather requirement.

The export destinations of Indian finished leather and leather products in 2010-11 were as follows:

The main production centres for leather and leather products are the following: Tamil Nadu Chennai, Ambur, Ranipet, Vaniyambadi, Trichy, Dindigul and Puducherry. West Bengal Kolkata Uttar Pradesh Kanpur, Unnao, Banther, Agra and Noida Punjab Jallandhar Tamil Nadu accounts for about 40% of Indias exports and has about 60% of tanning capacity. The Indian leather industry employs about 2.5 million workforce and 30% of the workforce is women.

FORMS
Vegetable-tanned leather Chrome-tanned leather Aldehyde-tanned leather Synthetic-tanned leather Alum-tawed leather Rawhide

Types
Leather is sold in four forms
Full-grain Top-grain Corrected-grain Split

LEATHER MANUFACTURING

PREPERATORY STAGE

TANNING

CRUSTING

Preparatory steps prior to tanning

Curing Beamhouse operations Soaking Liming Unhairing and scudding Deliming and bating Pickling

STRENGTHS
Comfortable availability of raw materials and other inputs Easy availability of low cost of labor. Exposure to export markets. Exporter-friendly government policies. Tax incentives on machinery by Government. Well-established linkages with buyers in EU and USA

WEAKNESS
Huge labour force resulting in high labour charges. Less number of organized product manufacturers. Lack of modern finishing facilities for leather. Low level of labour productivity due to inadequate formal training / unskilled labour. Highly unhygienic environment.

OPPORTUNITIES
Rising potential in the domestic market Growing fashion consciousness globally Use of e-commerce in direct marketing. Use of information technology and decision support software to help eliminate the length of the production cycle for different products. Product diversification - There is lot of scope for diversification into other products, namely, leather garments, goods etc.

THREATS
Stiff competition from other countries.(The performance of global competitors in leather and leather products indicates that there are at least 5 countries viz, China, Indonesia, Thailand, Vietnam and Brazil, which are more competitive than India.) Major part of the industry is unorganized. Limited scope for mobilizing funds through private placements and public issues (many businesses are family-owned).

POLITCAL
Industries are more dependent on trade, contract enforcement, and labor exhibit greater return volatility when local political risks are higher. Political uncertainty in countries of trading partners of trade-dependent industries similarly results in greater volatility.

 Social factor: Cattles, buffaloes, goats and sheeps are the major sources of hides and skins. The other sources are pigs, horses, camels and wild animals such as crocodiles, snakes, foxes, etc. However, processing and use of wild animal skins is prohibited due to ecological reasons. Economical: Leather industry play a major role for the people in rural areas which helps in economic status of people.

TECHNOLOGY
The chemical consumption in Indian tanneries is about 25 to 30% higher than international norms. This is due to the use of inefficient equipment and processes and the absence of recycling. The specific water consumption in Indian tanneries is more than double that of tanneries in developed countries. The tanning units in India consume an average of 40 ltr/sq ft of finished leather. Compared to this, the tanneries in developed countries consume about 12-15 litres/sq ft. A majority of the tanneries in India are very old and their layout is not efficient. This leads to bottlenecks for process and material handling, multidirectional material flow and excessive material handling. Most of these tanneries also have very unhygienic working conditions, inadequate ventilation and lighting.

ENVIRONMENTAL
In addition to these general requirements, the producers of leather goods are required to meet product specific requirements which deal with the maximum limits of formaldehyde, PCP, aryl amines released from azo-dyes and hexavalent chromium. Considering that most tanneries do not meet environmental standards and do not receive consent from the Pollution Boards (one of the conditions for eco labeling) , they are unlikely to be eligible to use the Eco label. Therefore, the Indian leather industry is unlikely to create a niche market for environmentally friendly leather .