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LEATHER INDUSTRY

PRESENTED BY:
ABUL REHMAN MASOOD
SYED YASIR RAZA NAQVI
AGENDA
 Introduction.  Major products .
 Manufacturing.  Contribution in global
 Problems. market.
 Tanneries running in  Imports .
Pakistan.  Cost of Production.
 Raw Materials.  Productions.
 Tanning process.  Environmental Effects.
 Exports.  Taxes.
 Export figures.  Role of Government.
 Export market  WTO scenario.
 Export potential.  General suggestions.
INTRODUCTION
Leather industry plays an important role
in the economy of Pakistan .
It is the 2nd largest export earning sector
after textiles.
Leather industry contributes 5% of the
GDP.
Leather exports increase at an average
rate of 11% per year.
INTRODUCTION CONT…
 This sector provide employment to
200,000 peoples.
 The fine quality of leather which produce
in Pakistan recognized worldwide.
MANUFACTURING
 Pakistan is well known in the global market for
the manufacturing of high quality and wide
range of leather and lather products like:
• Shoes
• Purses & Hand bags
• Key chains
• Belts
• Jackets
• Suit cases etc…
PROBLEMS
 Lack of local engineering capability .
 Foreign investments.
 Lack of literate labor.
 Power breakdown.
TANNERIES RUNNING IN
PAKISTAN
 More then 2500 tanneries and footwear
manufacturing units running in Pakistan
which are located in
• Karachi
• Hyderabad
• Lahore
• Sialkot
• Kasur
RAW MATETIALS
 Pakistani leather industries obtained the
raw material for the production of leather
from the following animals:
• Cow
• Buffalo
• Goat
• Sheep
TANNING PROCESS
 . we use only the
best raw materials
obtainable. Hides
from cows, buffalos,
goat and sheep. The
hides are packed in
slat when they arrive
from companies
specializing in
processing raw hides.
STEP 1
 First, the hides must be
stripped. This is done
by liming, which is one
of the most important
processes in leather
manufacturing. This
stage determines
whether the product is
to be soft and supple
upholstery leather or
stiff strap leather.
Liming takes two days
and is carried out in
rotating drums
STEP 2
 The limed hide is then
taken through the
fleshing machine, which
removes all traces of
fiber. The hide is now
almost transparent, but
it is still possible to see
that it came from a
black and white animal.
At the same time skilled
craftsmen trim the hid.
STEP 3
 The splitting machine
is a marvel of
precision. It splits the
hide in two layers.
The grain side, which
will become first class
Transco leather, has
the exact same
thickness throughout.
The other layer (the
split side) has a suede
surface on both sides.
STEP 4
 After the liming the hides
are very alkaline. Then the
tanning process itself
begins and it is finished in
a few days in our efficient
tanning mills. The
combination of tanning
agents has been
developed through
innumerable experiments
by our highly qualified
chemists. Each type of
leather has its unique mix.
STEP 5
 Then the hide is shaved
down to its desired
thickness another high
precision machine.
Liming and tanning has
removed all natural fat
from the hide and this
has to be replaced.
Various methods are used
according to the type of
leather. Some leathers
are treated with fat in a
heated fatting mill, while
others are aniline dyed
and then fatted with
water-soluble fats.
STEP 6
 The settings out
machine press the
water out and
flatten the hide.
STEP 7
 The leather is now
dried in different ways.
Some types are dried
with hot air, while
others are stretched
on frames in order to
be completely smooth.
Upholstery leathers
are then processed in
a rotating mill by
tumbling against each
other in order to
achieve the desired
softness.
STEP 8
 Experienced
sorters examine
the leather and
trim the hides.
STEP 9
 The finish of the
leather enhances
the tolerance and
improves the
texture.
STEP 10
 The leather is
measured with an
optic measuring
devise. The
measurement used
is Sq.Ft
STEP 11
 After measuring
the hide is ready to
use.
STEP 12
 Using various
tanning techniques,
we create many
types of leather
differing in
thickness, pliability,
smoothness and
structure.
EXPORTS
 The leather industry of Pakistan has been
export oriented for several years.
 Pakistan export the following :
• Raw hides
• Skins
• Crust leather
EXPORT FIGURES
 Finished leather and leather products
became major export spinners in 1980s.
 In 1978 the export figures have increased
from $77 million.
 In 2001-02 the export increase to $671
million.
EXPORT MARKET
 Italy
 Germany
 Spain
 Portugal
 China
 Korea
 Denmark
 Japan
 Russian states.
EXPORT POTENTIAL
 Leather industry is basically an export
oriented sector .
 The demand of Pakistani leather and
leather garments are increases
EXPORT POTENTIAL cont..
 Major buyers:
• Italy
• South Korea
• UK
• USA
• UAE
MAJOR PRODUCTS
 Footwear
 Leather garments
 Leather gloves
 Wallets
 Purses
 Hand bags
CONTRIBUTION IN GLOBAL
MARKET
COUNTRY %AGE EXPORT VALUE
SHARE (US $)
China 40% $ 8 billion
India 10% $ 2 billion
Turkey 8% $ 1.6 billion
Italy 8% $ 1.6 billion
Pakistan 3% $ 0.7 billion
Other 31% $ 7.2 billion
countries
IMPORTS
 The leather industry of Pakistan is meeting
its 75% need of raw material from local land
resources while remain 25% is met through
imports.
 Pakistan import leather from the following
countries:
• KSA
• China
• Iran
• Kenya
• Australia
• Sudan
• Italy
COST OF PRODUCTION
 Cost of production is very high in Pakistani
industry as compare to the other
competitors like India and China.
 The high cost of various inputs specially
utilities and taxes make our leather
products uncompetitive in international
market.
PRODUCTION AND
AVAILABILITY
LOCAL
PRODUCTION
Years Million Value million US $
Sq.meter
1999-00 43.6 9.77

2000-01 44.8 14.1

2001-02 45.7 20.37

2002-03 47.2 N/A

2003-04 48.4 N/A


ENVIROMENTAL EFFECTS
 Leather tanneries in Pakistan discharge
three types of wastes:

• Water waste.
• solid waste.
• Air emissions.
ENVIROMENTAL EFFECTS
cont..
 Lung cancer
 through cancer
 Skin diseases
TAXES
 Sales tax is reduced
 No quota on export
 Government deduct export tax on export
 The rate of tax on export is 6%
ROLE OF GOVERNMENT
 No subsidiary provided by government.
 NILT: National Institute of Leather
Technology
• The only institute in Karachi which offers
programs for the development of the
leather sector.
WTO SCENARIO
 Pakistan's leather industry would face the
problems after the implementations of the
regulations of World Trade Organization,
as major changes are expected in the
global market that will reduce the prices of
leather.
 European pay a better price of leather
sheets so Pakistani leather industry have
to reduce the cost of production in order to
enable to export to china
WTO cont…
 WTO also provide advantages for Pakistan
to identify new markets and capture them
by producing fine quality of leather
products at cheap rates with no trade
barriers.
GENERAL SUGGESTIONS
 Government have to modernize the live
stock farming in order to upgrade the
leather industry in Pakistan.
 Government should enforced ban on the
export of live animals to other countries.
 Government should embossed strict
checking for the control of smuggling of
cattle from the country.
GENERAL SUGGESTIONS
cont..
 Government should create awareness for the
butchers trough different media for careful
slaughtering of animals and skillful fleecing of hides
and skins ,by this way we got the good quality of
raw material for production.
 To reduce the cost of production of leather
products, reliance on imported chemicals and other
tanning materials for processing and finishing the
leather is needed to be reduce.
THANK YOU!
QUESTIONS?
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