BUSINESS COMMUNICATION

PROJECT ON
LEATHER INDUSTRY

SUBMITTED BY GROUP 1

NAME ROLL NO
Abhishek Jain 201822049

Chitranshi Khandelwal 201822057

Garima Singhal 201822059

Himanshu Gupta 201822061

Keval Gala 201822067

Leather goods and products have always been considered as a symbol of luxury, protection,
comfort, utility, fashion and warmth. The first evidence of leather appears in the Hindu holy
scriptures of the Vedas. The Rigveda has documented the use of leather ‘Mashaks’ or sacks
as early 3000 B.C as well as bottles. Straps, bags and bands were manufactured with leather.
Marco-polo is among the first explorer in the leather industry in the 1800s. Gujarat was known
for manufacture of leather. Every year many ships went to Arabia Laden with the skin of goat,
buffalos and other animals. The leather was used for sandals and sleeping mats. The leather
making activities were mainly carried by villagers. International export was started after 1880.
During 1900-1914, the export was dominated by Calcutta and Madras. The World War II gave
boost to the development of leather industry. In 1913-14, there were only 25 units in the
country which increased to 114 units by 1941.
In today’s time leather industry holds a very prominent place in the Indian economy. It
provides employment to about 2.5 million people in the country. The raw material for leather
is easily available and investors enjoy easy and abundant supply of skilled manpower and
world class technology.
Leather industry in India is a mixture of both the organised and the unorganised sector. About
75% of the leather output in India is generated by small, cottage sectors. The main reason
behind the transformation is several policies initiative taken by the government of the
country. India produces about 700 million pairs of leather footwear every year and accounts
for 18% share of total Indian leather export.
The major leading international leather
goods manufacturing brand names such as
Hugo Boss, Tommy Hilfiger, Versace,
Guess and DKNY have invested in
India and are engaged in sourcing
leather goods from India.
Leather making is an art that is timeless
and is woven into the fabric of our great
country. Through the ages, kingdoms have
come and gone, warriors have been
fought and independence has been achieved and the leather industry along with the legacy
of leather making has survived all along.
Strength
 Existence of more than enough productive capacity in training
 Easy availability of low cost labour
 Exposure to export markets
 Managements with business background become quality and environment conscious
 Presence of Qualified leather technologists in the field
 Comfortable availability of raw materials and other inputs
 Massive institutional support for technical services, designing, manpower
development and marketing
 Exporter friendly government policies
 Tax incentives on machinery by government
 Well established linkages with buyers in EU and USA

Weaknesses
 Low level of modernization and upgradation of technology, and the integration of
developed technology is very slow.
 Low level of labour productivity due to inadequate formal training / unskilled labour
 Horizontal growth of workplace
 Less number of organized product manufacturers
 Lack of modern finishing facilities for leather
 Unawareness of international standards by many players as maximum number of
leather industries are SME’s
 Difficulties in accessing to testing, designing and technical services
 Environmental problems
Opportunities
 Abundant scope to supply finished leather to multinationals setting up shop in India
 Growing Fashion Consciousness globally.
 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
 Growing international and domestic markets

Threats
 Entry of multinationals in domestic market
 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.
 Non-Tariff barriers. Developing countries are resorting to more and more non-tariff
barriers indirectly
 Improving Quality to adapt the stricter international standards
 Fast changing fashion trends are difficult to adapt for the Indian leather industries
 Limited Scope for mobilizing funds through private placements and public issues, as
many businesses are family-owned
Calfskin industry is on the limit of another way. Since a long time ago criticized as a standout
amongst the most dirtying, it might before long observe a picture makeover with appropriation
of new innovations and procedures created by the Central Leather Research Institute (CLRI)
at Chennai.
In regular tanning forms, just around 60 percent of the material utilized is consumed by calfskin
and the balance depletes away as emanating making genuine harm condition. With the new
advances and procedures, researchers assert, gushing releases would be diminished generously.
Addressing India Science Wire, CLRI Director Dr. B. Chandrasekaran said new advances and
procedures would help strike a harmony between the need to advance tanning industry and in
the meantime ensure the earth. The new framework would be essentially waterless as in water
required for tanning would be gotten from dampness inside the shroud itself rather than an
outside source. Further, the new procedure requires just around 20 for each penny of acids and
salts that was required in the customary procedure. Protected added substances are blended
rather than lime and water in the ordinary drum-tanning technique.
Chrome is utilized widely during the time spent tanning and it had been one of the real reasons
for natural worry for the business. The new 'Waterless Chrome Tanning Technology' (WLCT)
created by CLRI requires considerably less amount of water and in addition chrome. "With
much diminished chrome and aggregate broke up strong load the gushing are much cleaner
than the regular procedure and the nature of calfskin accordingly created is likewise observed
to be superior to anything cowhide delivered utilizing customary framework," said Dr
Chandrasekaran.

Effect of GST
The calfskin business with a fare turnover of $5.6 billion would require an extra capital
prerequisite of "over Rs 3,000 crore" following execution of the Goods and Service Tax, an
industry official said today.

"Due to GST, there will be an extra working capital necessity of over Rs 3,000 crore and since
80 for every penny of organizations in this industry are little scale, they are discovering it
difficult..," Council for Leather Exports Chairman Mukhtarul Amin told correspondents.
Effect of ban on sale of cattle for slaughter

Exporters are scrambling to guarantee worldwide customers like Zara and Giorgio Armani that
their shipments would be dispatched in spite of an administration crackdown on steers butcher
which debilitates the lucrative calfskin industry.

The middle pronounced an across the country prohibition on the offer of cows for butcher,
startling real design names who purchase billions of dollars worth of calfskin from India
consistently to make top of the line shoes, satchels and coats.

The dubious administering viably interferes with India's supply of hamburger and calfskin, and
industry gatherings and a few states where dairy animals butcher has beforehand been allowed
including Kerala have promised to battle the declaration.