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At the time of independence in 1947, there were only a few leather tanneries in Pakistan, which were
operating on a small scale producing mostly sole leather. During 1950s, some well-equipped tanneries
were set up at Karachi and Lahore, while during 60s and 70s more units were established at Hyderabad
Kasur, Sialkot, Multan, Sahiwal and Gujranwala. Starting with the production of picked and vegetable
tanned hides and skins, the tanneries, today, are producing not only wet blue and crust, but also fully
finished leather.

  

Pakistan's leather industry is one of the major foreign exchange earners for the country. About 90% of its
Products are exported in finished form. During 1996-97, the production of leather was about 14.3 million
m2 and export earnings amounted to US$ 642 million. There are some 600 tanneries in the formal sector
and an equally large number of tanneries in the informal sector. These are concentrated in a few clusters
of which Kasur (180 tanneries), Karachi (170), and Sialkot (135) are the most important.
Animal skins²which are the basis of the leather industry²are obtained from the provinces of the Punjab
and Sindh. Limited quantities of imported hides are also used. The season of peak activity begins around
Eid-ul-Azha and extends for between two to three months. During this period, production levels can reach
twice the normal level.

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There are many leather products, the major ones are the following: Belts, Gloves, Garments, Footwear
,Straps, Bags, Ladies Bags, wallets, Briefcases, Watch stripes, Key chains, Tea mats, Pen holders,
Musical instruments, Sports Goods, jackets, etc.


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Pakistan is a major player in terms of quantity and quality and is ranked third in exporting leather
garments.cMajor buyers of Pakistani leather and leather products are Italy, Spain, Portugal, South Korea,
Germany, France, UK, USA and the United Arab Emirates (UAE).
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Tannery is the first step in which animal hides are treated for leather manufacturing.

 

Hides are treated with the barks of trees that contain the naturally occurring element Tannin, from which
the term ³tanning´ originates. The skins are stretched onto frames and immersed into a series of
vats containing higher and higher concentrations of tannin, until the tanning material penetrates to the
center of the hide. Vegetable tanned leather is stiff yet pliable and is used for leather shoes, belts, bags,
and luggage.

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The Mineral Tanning process makes use of chemicals, most notably chromium sulfate, and is sometimes
referred to as chrome tanning. Pickled hides with a pH of 3 are immersed in a bath to which the chrome
tanning materials are introduced to raise the pH.

Chrome tanned leather is soft and pliable, and is the most used method for treating the skins of cattle,
pigs, goat and lamb. It produces a flexible, stretchable leather that is suitable for garments, and of course,
leather motorcycle apparel.

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Wet-Blue Process
Purchase of Selection in
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Process of Dying in
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Tannery (2-3 days)c
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c Process of
Finishing in Sale
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Issuance of Leather/ Cutting Stitching
Purchase of Leatherc (1-day)c (1-2 days)c
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Repairing/Re works Checking
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c Pressing/Ironingc

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(1-day)c



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The leather used to make the garments is of below average quality, this is due to the pre
slaughtering damages caused to labor, power outages spoil the leather in process, lack of proper
storage facilities, due to the rough handling by the untrained and inexperienced labor and the
injuries caused to animals as well as damage to their skins caused by different diseases prevalent
in animals arising from our unhygienic environment

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Cost of production in Pakistan is very high, our labor is inefficient and more laborers are required
to do a little amount of work resulting in salary expenditures doubling up for the industry owners.
Then we have the government imposing taxes on industries instead of giving them concessions in
this age of high cost of production. The inflation is ever rising today and becoming unbearable for
the exporters whose expenditures are going up leaving their prices incompetent in the
international markets where we have competitors like India and Bangladesh

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This is the biggest problem all the industries of Pakistan are facing today, the petroleum and gas
prices are rising and since we use the them as means of generating power for the country
including the industries it becomes doubly difficult to match the costs of energy incurred by the
competitors. There is no proper maintenance of steam pipes, steam traps and insulation and this
causes wastage of energy as well.

The Sui northern gas despite many reassurances is reluctant to restore the supply of gas to tanning
units. The members of Pakistan tanner's association have been demanding for the gas supply to be
restored as now they have been gripped by so many problems in the leather industry that it is not
feasible for the members of PTA to carry out their export ordersc

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Leather tanneries produce wastes in the form of solid wastes, waste water and air emissions.
There is no proper system for discharging the waste and without any treatment the wastewater is
discharged into the local environment. The ammonia emissions can also have a negative impact
on the health of the workers who are already working in an unhealthy working environment.
Some solid wastes have uses in glue manufacturing units and as poultry feed, since the presence
of chromium is there to great amounts in solid wastes, it poses a threat to the health of poultry.

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The leather industry faces a shortage of basic raw material. There is a shortage of wet blue grains
and wet blue split as well as shortages of hides and skins due to the smuggling of live animals to
Iran and Afghanistan. Export of wet blue grains and split is due to the high demand of Pakistani
wet blue in international markets. The Pakistan tanner's association has demanded that the
government should either impose a ban on such exports or increase duty from 20% to 50%. There
is deception involved where exporters use misdeclarations and under invoicing strategies to
export more quantities of raw materials. The recent floods have taken the lives of approximately
200,000 animals in Punjab and Sindh. This comes as a major blow to the industry as there is now
a big drop in the supply of livestock.

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All the potential we feel the leather garments industry possesses is not seen on practical accounts.
Pakistan, a local website on agricultural research and agriculture-based activities in Pakistan,
cited the Minister for Livestock and Dairy Development as saying that more than 300,000
animals have been exported to various countries under the commercial export of live animals
through an open policy since May 2009. The legal export of animals to other countries is proving
to be in the barrier in the progression of our leather industry as you lose thousands of hides
through the export of animalsc

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@ur products stand out in the international markets for being low quality products and we need to
differentiate our leather products making strong brand names. The Pakistani manufacturers
mostly replicate other brands and are sold at lower prices and the products are known for being
copies of the popular products which further scars the image of the country¶s exportsc

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Mainly our leather industry is focused on garments; there exists some diversification; however
that is limited to a certain extent only which does not meet the demands of the market. The future
lies in the footwear and such should be the direction of our leather industry, they need to expand
their product range and offer new categories like shoes, bags, furniture, etc.

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While we are struggling with our domestic problems, energy crisis, inflation, etc, the competition
is making it tougher by having better products that have high profit margins for the manufacturers
as they are enjoying lower costs of production. The competition¶s leather portfolio is vast; they
take benefits from the duty drawback and are more popular with the international markets.

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China¶s high inflationary rates at the moment have given the local exporters some relief however
to some extent.



  
Till a few years ago, Pakistan's leather industry used to be a leader in Asia. It is facing difficult times
today. The sharp decline in Pakistan's second top foreign exchange earner after textiles that employs some
500,000 workers is a matter of serious concern, calling for immediate steps to stem the tide. India, Turkey
and Bangladesh are the nearest competitors of Pakistan and authorities should look into the ground
reality. China, India and Bangladesh are doing a lot to save their leather industries and the leather industry
of Pakistan has great potential to grow if provided with a level playing field with China, India and
Bangladesh. The export of leather is already on the decline and facing serious financial and liquidity
crunch, shortage of raw material and the coming year will be even more difficult for the leather exporters.

The industry is at the verge of collapse as our exports are encroaching upon by our nearest competitors
due to higher cost of production. In case of imposition of GST regime on the leather industry, export will
face around 30 percent further loss due to heavy taxation on inputs and production cost. The country
earned only $867 million on export head of leather and leather products during July-June 2010 and it will
further lose around $160 million on export orders if GST regime is imposed.

Chairman, Pakistan Tanners Association (PTA), has criticized over the discrimination attitude of
government of Pakistan with the 2nd biggest export oriented Industry of Leather and said that industry
was facing serious crisis due to frequent gas suspension in leather units in Punjab especially in Lahore
and severe interruption of electricity, which is the basic obstacles confronting by the leather industry of
Pakistan apart from others. Pakistan's leather industry may face an acute shortage of raw material as
recent floods have swept away thousands of animals, Pakistan Tanners Association (PTA) said on
Wednesday.

According to PTA, Pakistan's leather exports from last few years are continuously decreasing. In 2008-09
the sector faced a sharp decline of 28 percent in leather goods export, while on the other hand Indian
exports of the same commodity witnessed a 26 percent increase in the first six months of 2009. During
fiscal year 2007-08, the country's export of leather goods stood at $1.15 billion, during 2008-09 at $943
million and during 2009-10 Pakistan's leather goods exports witnessed a further decline to $860 million.
The declining trend in the exports of leather products is alarming. As per Federal Bureau of Statistics
report, Pakistan's second biggest export-earning segment, leather and leather goods, witnessed an 18
percent fall during July-June 2009-10, as against the same period last year. During 2009-10 the country's
leather exports went down by about 7.57 percent, leather garments exports declined by 12.53 percent,
exports of leather gloves fell by 37 percent and exports of other leather-based goods slumped by about
31.60 percent.

Giving the reasons behind declining trend in the export of leather products, shortage of raw material
(hides/ skins and wet blue) due to smuggling of at least 100 trucks loaded with livestock/cattle to
Afghanistan and Iran. Moreover, animals are also being sent to Middle East by boats.
The quality raw material, semi-processed leather, is being exported to China, India and other competitor
countries that otherwise could fetch 3-4 times more value if manufactured domestically.
Currently, this sector is contributing around $800 million to $1 billion a year but has the potential to

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multiply volume of exports with the improvement of quality and diversification in different range of
products, especially garments and footwear, officials added. It is estimated that around 15-20 percent of
the hides and skins are affected by pre-slaughtering damages, like skin-cuts, rashes, diseases, injuries, etc,
while around 10 percent more are damaged due to power and gas load shedding at the main tanneries.
There are many problems in the industry as well. We don't have enough skilled labor while our industry is
also less interested in taking new initiatives. The future of the leather industry in the country is linked to
the development of shoe and value-added leather goods. Having 11 percent of the world's livestock -- 14
percent buffaloes and 7.5 percent goats -- Pakistan stands 15th in the world in leather production.
According to sources, around 80 percent of leather production is exported. Pakistan stands at number four
in leather garments production, second in leather gloves, and 36th in leather footwear. "Even then
Pakistan's share (USD940 million) is less than one percent in the world leather trade of USD 98 billion
while its share in the world's leather exports is 1.29 percent.

The country faced 32 percent decline in leather goods export during July-June 2009-10, while India
witnessed 21 percent increase in the same period. He said during the same period 2008-09, the country¶s
export of leather stood at $1.20 billion.




  
 

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As the people are getting more aware of fashion and brand all over the world, so there is a need to
introduce a Pakistan born brand of leather. As there is huge demand of Pakistanis leather made
jackets all over the world but as we not able to bring change in designs of the jackets the demand
is getting lower. Renowned Pakistani firms need to register trade marks with respect to the leather
products they manufacture.

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Government should promote centralized slaughtering by enforcing existing legislation especially

in urban centers where kill is high and upgrade slaughter facilities including tools installation for
hide puller. It should launch awareness campaign and training of butchers, flayers, as well as
hides and skins extension workers on flaying and preservation techniques to minimize the
wastage.

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Footwear, the largest segment of the leather industry around the world has been surprisingly
neglected in Pakistan. Foreign franchised companies have become household names in Pakistan.
This is despite the fact that the entire stuff and skill they use belong to Pakistan.
Moreover, having a strong industrial base, Pakistan's leather industry looks treading without
shoes. This vacuum in leather industry calls for the attention of the industry leaders to bridge the
gap to give a comprehensive look to the leather and leather products industry in Pakistan. @ne of
the options to enter the field of footwear sector is to seek partnership with international brand
producers by offering them attractive incentives.




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Several remedial measures are suggested to lessen the environmental impact of tanneries. In large
andmedium sized tanneries environmental management system must be developed. Staff should
be trained for occupational health and safety. Gaseous masks must be provided for workers in
order to prevent inhalation of fumes. Proper arrangement must be made to stop use of tanneries
solid waste to make poultry feed. Improvement in drainage system is needed to avoid the
formation of hydrogen Sulphide in the tannery and chemical recycling should be practiced.

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Government should promote commercialization of livestock rearing and develop programs on
livestock feeds and upgrading of pasture quality. Also there is a need to create awareness on the
importance and value of hides and skins amongst pastoral communities. Moreover diseases in the
livestock in Pakistan can prove hurdle in the manufacturing and exports of finished products of
leather. Concrete measures need to be taken to overcome this threat to the livestock as a result the
live animals are suffering from different diseases that damage the quality of the leather and
tarnish the image of products at international level.

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The duties on the import of tanneries related machinery need to be further reduced. The
machinery made locally is technologically inferior which not only increases the cost of
production but restrains from developing at par with the international market.

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