LEATHER INDUSTRYLEATHER INDUSTRY

PRESENTED BY:PRESENTED BY:

ABUL REHMAN MASOODABUL REHMAN MASOOD

SYED YASIR RAZA NAQVISYED YASIR RAZA NAQVI

AGENDAAGENDA Introduction.Introduction. Manufacturing.Manufacturing. Problems.Problems. Tanneries running in Tanneries running in

Pakistan.Pakistan. Raw Materials.Raw Materials. Tanning process.Tanning process. Exports.Exports. Export figures.Export figures. Export marketExport market Export potential.Export potential.

Major products .Major products . Contribution in global Contribution in global

market.market. Imports .Imports . Cost of Production.Cost of Production. Productions.Productions. Environmental Effects.Environmental Effects. Taxes.Taxes. Role of Government.Role of Government. WTO scenario.WTO scenario. General suggestions.General suggestions.

INTRODUCTION INTRODUCTION Leather industry plays an important role Leather industry plays an important role

in the economy of Pakistan .in the economy of Pakistan .It is the 2It is the 2ndnd largest export earning sector largest export earning sector

after textiles.after textiles.Leather industry contributes 5% of the Leather industry contributes 5% of the

GDP.GDP.Leather exports increase at an average Leather exports increase at an average

rate of 11% per year.rate of 11% per year.

INTRODUCTION CONT…INTRODUCTION CONT… This sector provide employment to This sector provide employment to

200,000 peoples.200,000 peoples. The fine quality of leather which produce The fine quality of leather which produce

in Pakistan recognized worldwide.in Pakistan recognized worldwide.

MANUFACTURING MANUFACTURING Pakistan is well known in the global market Pakistan is well known in the global market

for the manufacturing of high quality and for the manufacturing of high quality and wide range of leather and lather products wide range of leather and lather products like:like:

• ShoesShoes• Purses & Hand bags Purses & Hand bags • Key chains Key chains • BeltsBelts• JacketsJackets• Suit cases etc…Suit cases etc…

PROBLEMSPROBLEMS

Lack of local engineering capability .Lack of local engineering capability . Foreign investments.Foreign investments. Lack of literate labor.Lack of literate labor. Power breakdown.Power breakdown.

TANNERIES RUNNING IN TANNERIES RUNNING IN PAKISTANPAKISTAN

More then 2500 tanneries and footwear More then 2500 tanneries and footwear manufacturing units running in Pakistan manufacturing units running in Pakistan which are located in which are located in

• Karachi Karachi • HyderabadHyderabad• Lahore Lahore • SialkotSialkot• Kasur Kasur

RAW MATETIALSRAW MATETIALS Pakistani leather industries obtained the Pakistani leather industries obtained the

raw material for the production of leather raw material for the production of leather from the following animals:from the following animals:

• Cow Cow • BuffaloBuffalo• GoatGoat• SheepSheep

TANNING PROCESSTANNING PROCESS . . we use only the we use only the

best raw materials best raw materials obtainable. Hides obtainable. Hides from cows, buffalos, from cows, buffalos, goat and sheep. The goat and sheep. The hides are packed in hides are packed in slat when they arrive slat when they arrive from companies from companies specializing in specializing in processing raw hides. processing raw hides.

STEP 1STEP 1 First, the hides must First, the hides must

be stripped. This is be stripped. This is done by liming, which done by liming, which is one of the most is one of the most important processes in important processes in leather leather manufacturing. This manufacturing. This stage determines stage determines whether the product is whether the product is to be soft and supple to be soft and supple upholstery leather or upholstery leather or stiff strap leather. stiff strap leather. Liming takes two days Liming takes two days and is carried out in and is carried out in rotating drums rotating drums

STEP 2STEP 2 The limed hide is then The limed hide is then

taken through the taken through the fleshing machine, fleshing machine, which removes all which removes all traces of fiber. The hide traces of fiber. The hide is now almost is now almost transparent, but it is transparent, but it is still possible to see that still possible to see that it came from a black it came from a black and white animal. At and white animal. At the same time skilled the same time skilled craftsmen trim the hid. craftsmen trim the hid.

STEP 3STEP 3 The splitting machine The splitting machine

is a marvel of is a marvel of precision. It splits the precision. It splits the hide in two layers.hide in two layers.The grain side, which The grain side, which will become first class will become first class Transco leather, has Transco leather, has the exact same the exact same thickness throughout. thickness throughout. The other layer (the The other layer (the split side) has a split side) has a suede surface on suede surface on both sides. both sides.

STEP 4STEP 4

After the liming the hides After the liming the hides are very alkaline. Then the are very alkaline. Then the tanning process itself tanning process itself begins and it is finished in begins and it is finished in a few days in our efficient a few days in our efficient tanning mills. The tanning mills. The combination of tanning combination of tanning agents has been agents has been developed through developed through innumerable experiments innumerable experiments by our highly qualified by our highly qualified chemists. Each type of chemists. Each type of leather has its unique mix.leather has its unique mix.

STEP 5STEP 5 Then the hide is shaved Then the hide is shaved

down to its desired down to its desired thickness another high thickness another high precision machine.precision machine.

Liming and tanning has Liming and tanning has removed all natural fat removed all natural fat from the hide and this from the hide and this has to be replaced. has to be replaced. Various methods are used Various methods are used according to the type of according to the type of leather. Some leathers leather. Some leathers are treated with fat in a are treated with fat in a heated fatting mill, while heated fatting mill, while others are aniline dyed others are aniline dyed and then fatted with and then fatted with water-soluble fats. water-soluble fats.

STEP 6STEP 6

The settings out The settings out machine press the machine press the water out and water out and flatten the hide. flatten the hide.

STEP 7STEP 7 The leather is now The leather is now

dried in different dried in different ways. Some types are ways. Some types are dried with hot air, dried with hot air, while others are while others are stretched on frames stretched on frames in order to be in order to be completely smooth. completely smooth. Upholstery leathers Upholstery leathers are then processed in are then processed in a rotating mill by a rotating mill by tumbling against tumbling against each other in order to each other in order to achieve the desired achieve the desired softness. softness.

STEP 8STEP 8

Experienced Experienced sorters examine sorters examine the leather and the leather and trim the hides. trim the hides.

STEP 9STEP 9

The finish of the The finish of the leather enhances leather enhances the tolerance and the tolerance and improves the improves the texture. texture.

STEP 10STEP 10

The leather is The leather is measured with an measured with an optic measuring optic measuring devise. The devise. The measurement used measurement used is Sq.Ft is Sq.Ft

STEP 11STEP 11

After measuring After measuring the hide is ready to the hide is ready to use.use.

STEP 12STEP 12

Using various Using various tanning techniques, tanning techniques, we create many we create many types of leather types of leather differing in differing in thickness, pliability, thickness, pliability, smoothness and smoothness and structure.structure.

EXPORTSEXPORTS

The leather industry of Pakistan has been The leather industry of Pakistan has been export oriented for several years.export oriented for several years.

Pakistan export the following :Pakistan export the following :• Raw hidesRaw hides• SkinsSkins• Crust leatherCrust leather

EXPORT FIGURESEXPORT FIGURES

Finished leather and leather products Finished leather and leather products became major export spinners in 1980s.became major export spinners in 1980s.

In 1978 the export figures have increased In 1978 the export figures have increased from $77 million.from $77 million.

In 2001-02 the export increase to $671 In 2001-02 the export increase to $671 million.million.

EXPORT MARKETEXPORT MARKET

ItalyItaly GermanyGermany SpainSpain PortugalPortugal ChinaChina KoreaKorea DenmarkDenmark JapanJapan Russian states.Russian states.

EXPORT POTENTIALEXPORT POTENTIAL

Leather industry is basically an export Leather industry is basically an export oriented sector .oriented sector .

The demand of Pakistani leather and The demand of Pakistani leather and leather garments are increasesleather garments are increases

EXPORT POTENTIAL cont..EXPORT POTENTIAL cont..

Major buyers:Major buyers:• ItalyItaly• South KoreaSouth Korea• UKUK• USAUSA• UAEUAE

MAJOR PRODUCTSMAJOR PRODUCTS

FootwearFootwear Leather garments Leather garments Leather glovesLeather gloves Wallets Wallets PursesPurses Hand bagsHand bags

CONTRIBUTION IN GLOBAL CONTRIBUTION IN GLOBAL MARKETMARKET

COUNTRYCOUNTRY %AGE %AGE SHARESHARE

EXPORT VALUE EXPORT VALUE (US $)(US $)

ChinaChina 40%40% $ 8 billion$ 8 billion

India India 10%10% $ 2 billion $ 2 billion

Turkey Turkey 8%8% $ 1.6 billion$ 1.6 billion

Italy Italy 8%8% $ 1.6 billion$ 1.6 billion

Pakistan Pakistan 3%3% $ 0.7 billion$ 0.7 billion

Other Other countries countries

31%31% $ 7.2 billion$ 7.2 billion

IMPORTS IMPORTS The leather industry of Pakistan is meeting The leather industry of Pakistan is meeting

its 75% need of raw material from local land its 75% need of raw material from local land resources while remain 25% is met through resources while remain 25% is met through imports.imports.

Pakistan import leather from the following Pakistan import leather from the following countries:countries:

• KSAKSA• ChinaChina• Iran Iran • Kenya Kenya • Australia Australia • Sudan Sudan • Italy Italy

COST OF PRODUCTIONCOST OF PRODUCTION

Cost of production is very high in Pakistani Cost of production is very high in Pakistani industry as compare to the other industry as compare to the other competitors like India and China.competitors like India and China.

The high cost of various inputs specially The high cost of various inputs specially utilities and taxes make our leather utilities and taxes make our leather products uncompetitive in international products uncompetitive in international market.market.

PRODUCTION AND PRODUCTION AND AVAILABILITY AVAILABILITY

LOCAL LOCAL PRODUCTIONPRODUCTION

Years Years MillionMillion Sq.meterSq.meter

Value million US $Value million US $

1999-001999-00 43.643.6 9.779.77

2000-012000-01 44.844.8 14.114.1

2001-022001-02 45.745.7 20.3720.37

2002-032002-03 47.247.2 N/AN/A

2003-042003-04 48.448.4 N/AN/A

ENVIROMENTAL EFFECTSENVIROMENTAL EFFECTS

Leather tanneries in Pakistan discharge Leather tanneries in Pakistan discharge three types of wastes:three types of wastes:

• Water waste.Water waste.• solid waste.solid waste.• Air emissions.Air emissions.

ENVIROMENTAL EFFECTS ENVIROMENTAL EFFECTS cont..cont..

Lung cancer Lung cancer through cancerthrough cancer Skin diseasesSkin diseases

TAXESTAXES

Sales tax is reducedSales tax is reduced No quota on exportNo quota on export Government deduct export tax on exportGovernment deduct export tax on export The rate of tax on export is 6%The rate of tax on export is 6%

ROLE OF GOVERNMENTROLE OF GOVERNMENT

No subsidiary provided by government.No subsidiary provided by government. NILT: National Institute of Leather NILT: National Institute of Leather

Technology Technology • The only institute in Karachi which offers The only institute in Karachi which offers

programs for the development of the programs for the development of the leather sector.leather sector.

WTO SCENARIOWTO SCENARIO

Pakistan's leather industry would face the Pakistan's leather industry would face the problems after the implementations of the problems after the implementations of the regulations of World Trade Organization, regulations of World Trade Organization, as major changes are expected in the as major changes are expected in the global market that will reduce the prices of global market that will reduce the prices of leather.leather.

European pay a better price of leather European pay a better price of leather sheets so Pakistani leather industry have sheets so Pakistani leather industry have to reduce the cost of production in order to to reduce the cost of production in order to enable to export to chinaenable to export to china

WTO cont…WTO cont…

WTO also provide advantages for Pakistan WTO also provide advantages for Pakistan to identify new markets and capture them to identify new markets and capture them by producing fine quality of leather by producing fine quality of leather products at cheap rates with no trade products at cheap rates with no trade barriers.barriers.

GENERAL SUGGESTIONSGENERAL SUGGESTIONS

Government have to modernize the live Government have to modernize the live stock farming in order to upgrade the stock farming in order to upgrade the leather industry in Pakistan.leather industry in Pakistan.

Government should enforced ban on the Government should enforced ban on the export of live animals to other countries.export of live animals to other countries.

Government should embossed strict Government should embossed strict checking for the control of smuggling of checking for the control of smuggling of cattle from the country.cattle from the country.

GENERAL SUGGESTIONS GENERAL SUGGESTIONS cont..cont..

Government should create awareness for Government should create awareness for the butchers trough different media for the butchers trough different media for careful slaughtering of animals and skillful careful slaughtering of animals and skillful fleecing of hides and skins ,by this way we fleecing of hides and skins ,by this way we got the good quality of raw material for got the good quality of raw material for production.production.

To reduce the cost of production of leather To reduce the cost of production of leather products, reliance on imported chemicals products, reliance on imported chemicals and other tanning materials for processing and other tanning materials for processing and finishing the leather is needed to be and finishing the leather is needed to be reduce.reduce.

THANK YOU!THANK YOU!

QUESTIONS?QUESTIONS???