LEATHER INDUSTRY

PRESENTED BY: ABUL REHMAN MASOOD SYED YASIR RAZA NAQVI

AGENDA
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Introduction. Manufacturing. Problems. Tanneries running in Pakistan. Raw Materials. Tanning process. Exports. Export figures. Export market Export potential.

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Major products . Contribution in global market. Imports . Cost of Production. Productions. Environmental Effects. Taxes. Role of Government. WTO scenario. 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…
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This sector provide employment to 200,000 peoples. The fine quality of leather which produce in Pakistan recognized worldwide.

MANUFACTURING

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

TANNERIES RUNNING IN PAKISTAN
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More then 2500 tanneries and footwear manufacturing units running in Pakistan which are located in Karachi Hyderabad Lahore Sialkot Kasur

RAW MATETIALS

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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
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The leather industry of Pakistan has been export oriented for several years. Pakistan export the following : Raw hides Skins Crust leather

EXPORT FIGURES
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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
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Italy Germany Spain Portugal China Korea Denmark Japan Russian states.

EXPORT POTENTIAL
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Leather industry is basically an export oriented sector . The demand of Pakistani leather and leather garments are increases

EXPORT POTENTIAL cont..
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Major buyers: Italy South Korea UK USA UAE

MAJOR PRODUCTS
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Footwear Leather garments Leather gloves Wallets Purses Hand bags

CONTRIBUTION IN GLOBAL MARKET
COUNTRY China India Turkey Italy Pakistan Other countries %AGE SHARE 40% 10% 8% 8% 3% 31% EXPORT VALUE (US $) $ 8 billion $ 2 billion $ 1.6 billion $ 1.6 billion $ 0.7 billion $ 7.2 billion

IMPORTS


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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
1999-00 2000-01 2001-02 2002-03 2003-04

Million Sq.meter 43.6 44.8 45.7 47.2 48.4

Value million US $ 9.77 14.1 20.37 N/A N/A

ENVIROMENTAL EFFECTS

Leather tanneries in Pakistan discharge three types of wastes: Water waste. solid waste. Air emissions.

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ENVIROMENTAL EFFECTS cont..
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Lung cancer through cancer Skin diseases

TAXES
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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
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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

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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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