Leather Industry of Pakistan

HISTORY OF LEATHER GARMENT INDUSTRY IN PAKISTAN
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.

OVERVIEW: 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. MAJOR LEATHER PRODUCTS: 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. LEATHER EXPORTS: Pakistan is a major player in terms of quantity and quality and is ranked third in exporting leather garments. Major buyers of Pakistani leather and leather products are Italy, Spain, Portugal, South Korea, Germany, France, UK, USA and the United Arab Emirates (UAE). LEATHER MANUFACTURING: Tannery is the first step in which animal hides are treated for leather manufacturing. Vegetable tannery: 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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and is the most used method for treating the skins of cattle. and of course. Chrome tanned leather is soft and pliable. Pickled hides with a pH of 3 are immersed in a bath to which the chrome tanning materials are introduced to raise the pH. stretchable leather that is suitable for garments. leather motorcycle apparel. 2 .Leather Industry of Pakistan Mineral tanning: The Mineral Tanning process makes use of chemicals. most notably chromium sulfate. and is sometimes referred to as chrome tanning. It produces a flexible. pigs. goat and lamb.

Leather Industry of Pakistan PROCESS OF MANUFACTURETING LEATHER Purchase of Skin/Hides Selection (1-day) Wet-Blue Process in Tannery (7-10 days) Process of Dying in Tannery (2-3 days) Sale out to other Tannery Process of Finishing in Sale out Tannery (3-5 days) Issuance of Leather/ Purchase of Leather Cutting (1-day) Stitching (1-2 days) Repairing/Re works (If required) (1-day) Checking (1-day) Pressing/Ironing Packing (1-day) 3 .

The Sui northern gas despite many reassurances is reluctant to restore the supply of gas to tanning units. 4 . 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. it poses a threat to the health of poultry. There is no proper system for discharging the waste and without any treatment the wastewater is discharged into the local environment. There is no proper maintenance of steam pipes. The ammonia emissions can also have a negative impact on the health of the workers who are already working in an unhealthy working environment. 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. 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 orders. lack of proper storage facilities. steam traps and insulation and this causes wastage of energy as well. this is due to the pre slaughtering damages caused to labor. 3.Leather Industry of Pakistan PROBLEMS FACED BY THE LEATHER GARMENT INDUSTRY 1. 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 2. COST OF PRODUCTION Cost of production in Pakistan is very high. ENVIRONMENTAL CHALLENGE Leather tanneries produce wastes in the form of solid wastes. Some solid wastes have uses in glue manufacturing units and as poultry feed. QUALITY The leather used to make the garments is of below average quality. waste water and air emissions. since the presence of chromium is there to great amounts in solid wastes. ENERGY CRISIS This is the biggest problem all the industries of Pakistan are facing today. power outages spoil the leather in process. 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. Then we have the government imposing taxes on industries instead of giving them concessions in this age of high cost of production. 4.

energy crisis. The recent floods have taken the lives of approximately 200. 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%. The competition¶s leather portfolio is vast. SHORTAGE OF RAW MATERIALS The leather industry faces a shortage of basic raw material. This comes as a major blow to the industry as there is now a big drop in the supply of livestock. 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. 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 animals. All the potential we feel the leather garments industry possesses is not seen on practical accounts. PRODUCT DIFFERENTIATION Our products stand out in the international markets for being low quality products and we need to differentiate our leather products making strong brand names. There is deception involved where exporters use misdeclarations and under invoicing strategies to export more quantities of raw materials.000 animals in Punjab and Sindh. a local website on agricultural research and agriculture-based activities in Pakistan. bags. 6. they take benefits from the duty drawback and are more popular with the international markets. cited the Minister for Livestock and Dairy Development as saying that more than 300. 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. there exists some diversification. furniture. inflation. 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 exports. The future lies in the footwear and such should be the direction of our leather industry. Pakistan. Export of wet blue grains and split is due to the high demand of Pakistani wet blue in international markets. etc. 5 . TOUGH COMPETITION FROM INDIA AND CHINA While we are struggling with our domestic problems.Leather Industry of Pakistan 5. PRODUCT DIVERSIFICATION Mainly our leather industry is focused on garments. 7. however that is limited to a certain extent only which does not meet the demands of the market. they need to expand their product range and offer new categories like shoes. 8. etc.000 animals have been exported to various countries under the commercial export of live animals through an open policy since May 2009.

The sharp decline in Pakistan's second top foreign exchange earner after textiles that employs some 500. According to PTA. shortage of raw material and the coming year will be even more difficult for the leather exporters. India and other competitor countries that otherwise could fetch 3-4 times more value if manufactured domestically. 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. Pakistan's second biggest export-earning segment. In 2008-09 the sector faced a sharp decline of 28 percent in leather goods export.60 percent. the country's export of leather goods stood at $1.15 billion. Turkey and Bangladesh are the nearest competitors of Pakistan and authorities should look into the ground reality. Pakistan's leather industry may face an acute shortage of raw material as recent floods have swept away thousands of animals. export will face around 30 percent further loss due to heavy taxation on inputs and production cost. Moreover. 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. calling for immediate steps to stem the tide. The industry is at the verge of collapse as our exports are encroaching upon by our nearest competitors due to higher cost of production. The declining trend in the exports of leather products is alarming.57 percent. As per Federal Bureau of Statistics report. India. while on the other hand Indian exports of the same commodity witnessed a 26 percent increase in the first six months of 2009. Pakistan Tanners Association (PTA). Pakistan's leather industry used to be a leader in Asia. which is the basic obstacles confronting by the leather industry of Pakistan apart from others. witnessed an 18 percent fall during July-June 2009-10. semi-processed leather. PRESENT SCENERIO Till a few years ago. leather and leather goods. 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. China. In case of imposition of GST regime on the leather industry. The quality raw material.Leather Industry of Pakistan China¶s high inflationary rates at the moment have given the local exporters some relief however to some extent. is being exported to China. India and Bangladesh. Chairman. It is facing difficult times today. During 2009-10 the country's leather exports went down by about 7. The export of leather is already on the decline and facing serious financial and liquidity crunch. Pakistan Tanners Association (PTA) said on Wednesday. during 2008-09 at $943 million and during 2009-10 Pakistan's leather goods exports witnessed a further decline to $860 million. Giving the reasons behind declining trend in the export of leather products.53 percent. 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. leather garments exports declined by 12. as against the same period last year. exports of leather gloves fell by 37 percent and exports of other leather-based goods slumped by about 31.000 workers is a matter of serious concern. animals are also being sent to Middle East by boats. Currently. this sector is contributing around $800 million to $1 billion a year but has the potential to 6 . During fiscal year 2007-08. Pakistan's leather exports from last few years are continuously decreasing.

Leather Industry of Pakistan multiply volume of exports with the improvement of quality and diversification in different range of products. The future of the leather industry in the country is linked to the development of shoe and value-added leather goods.Pakistan stands 15th in the world in leather production. rashes. like skin-cuts. injuries. the country¶s export of leather stood at $1. 7 . PROMOTING AND INTRODUCING BRAND NAMES As the people are getting more aware of fashion and brand all over the world. 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. We don't have enough skilled labor while our industry is also less interested in taking new initiatives. 2. Renowned Pakistani firms need to register trade marks with respect to the leather products they manufacture. as well as hides and skins extension workers on flaying and preservation techniques to minimize the wastage. It should launch awareness campaign and training of butchers. officials added. second in leather gloves. flayers. RECOMMENDATIONS 1. etc.14 percent buffaloes and 7. Pakistan stands at number four in leather garments production. 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. Having 11 percent of the world's livestock -. According to sources. so there is a need to introduce a Pakistan born brand of leather.5 percent goats -. around 80 percent of leather production is exported. There are many problems in the industry as well. especially garments and footwear. It is estimated that around 15-20 percent of the hides and skins are affected by pre-slaughtering damages.20 billion. diseases. CREATING SLAUGHTER FACILITIES AND TRAINING OF BUTCHERS 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. 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. He said during the same period 2008-09. while around 10 percent more are damaged due to power and gas load shedding at the main tanneries.

ANIMAL HUSBANDRY Government should promote commercialization of livestock rearing and develop programs on livestock feeds and upgrading of pasture quality. This is despite the fact that the entire stuff and skill they use belong to Pakistan. Moreover. 4. having a strong industrial base. 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. 5. Improvement in drainage system is needed to avoid the formation of hydrogen Sulphide in the tannery and chemical recycling should be practiced. 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. REDUCTION OF DUTIES ON MACHINERY The duties on the import of tanneries related machinery need to be further reduced. Proper arrangement must be made to stop use of tanneries solid waste to make poultry feed. Foreign franchised companies have become household names in Pakistan. Moreover diseases in the livestock in Pakistan can prove hurdle in the manufacturing and exports of finished products of leather. TREATING ENVIRONMENTAL HAZARDS Several remedial measures are suggested to lessen the environmental impact of tanneries. Staff should be trained for occupational health and safety. 6. the largest segment of the leather industry around the world has been surprisingly neglected in Pakistan. 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. Also there is a need to create awareness on the importance and value of hides and skins amongst pastoral communities. One of the options to enter the field of footwear sector is to seek partnership with international brand producers by offering them attractive incentives. Pakistan's leather industry looks treading without shoes. In large and medium sized tanneries environmental management system must be developed. PROMOTING FOOTWEAR SECTOR AND BAGS Footwear. Gaseous masks must be provided for workers in order to prevent inhalation of fumes. 8 .Leather Industry of Pakistan 3.

iin. http://www. http://www.php?newsid=1018 2.Leather Industry of Pakistan BIBLIOGRAPHY 1.info/news/index.E139. http://www.com/news/supplements/1171221:leather-industry-rake-up-the-potential.com.brecorder.html 3.pakistaneconomist.pk.com/pagesearch/Search-Engine2003/S.aspx?Id=2263&operationId=39& 4. http://www.asp 9 .pk/SectionCategories.all-biz.

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