Desi leather cos eye Kenya, Botswana for tanning units

CHENNAI: Leather product manufacturers in India are setting sight on countries like Kenya, Botswana and Brazil to set up in tanning units there.
Delegations from Kenya and Botswana came to India last week to invite Indian companies to invest in their countries, and Indian companies are keen on setting up shop there, Rafeeque Ahmed, chairman of the Council for Leather Exports said.
"There is a lot of raw hide available in countries like Kenya and Botswana. Indian companies can go there, set up tanning units to process the hide available, turn them into finished leather and bring them over to India where leather products can be made," Ahmed said. The members of the leather industry are working on a delegation that can visit the countries to work on this. "We have promised them that a delegation will go this year and look at this," Ahmed said.
With the product manufacturing segment of the leather industry growing well, the Indian industry is working to develop the raw material tanning segment and is considering setting up tanning units in other countries to process raw hides into finished leather. The tanning sector is lagging behind due to environment regulations, and this invitation from the African countries appears a welcome one for the industry.
"The industry has grown manifold over the last few years and production capacity has gone up. But tanning capacity has come down and we now need to concentrate on capacity, Ahmed had said recently. Tanning capacity in the country had fallen, primarily because of a 35% fall in capacities in Tamil Nadu, the country's largest leather tanning cluster. Tamil Nadu is the only place where environment regulations require leather tanning units to implement Zero Liquid Discharge, and meeting the stringent requirements drives up costs, resulting in a fall in tanning capacity. While the industry is working on ways to improve technology and this increase tanning capacity, an option to set up tanning units abroad would help.
The Indian leather industry exported finished goods worth about $7 billion, an increase of about 18% from $5.9 billion in 2013-14, and the industry is targeting exports of $27 billion in the next five years.