The state leather industry, which accounts for 40-45 per cent of the total leather exports from India, may see subdued growth in the ensuing season, which would commence in February 2009.
The export-dependent industry believes that the current economic turmoil in the US and Europe has created an “uncertainty” on the orders that are likely to flow in in the new season. Companies, therefore, are putting their expansion plans on hold since they are not sure about the orders.
During 2007-08, India’s leather exports stood at $3.47 billion, up 13.67 per cent over the previous year.
The traditional leather belt of Ambur, Ranipet and Vellore in Tamil Nadu witnessed a 15 per cent year-on-year increase and reported a good two seasons — hard time winter (September to February) and spring summer (March to September). The new season, called big season orders, will being from February though companies start getting enquiries by this time.
All India Skin and Hide Tanners and Merchants Association president M Rafeeque Ahmed, and CMD of Farida Group, says the current turmoil has resulted in job loss and, in turn, led to reduction in purchasing power in US and Europe, which are the largest markets for the industry in this belt with a 78 per cent share.
Though both the earlier seasons witnessed satisfactory orders from European and US markets for which shipment has just started, the industry is yet to get orders for the spring season.
Smaller units, which depend on bigger units, are the worst hit and finding it difficult to survive. A Srinivasan, who takes outsourcing works from big units in Ranipet, says his company was operating in three shifts but now this has come down to 2 and if there are no orders, he may have to reduce it further. His unit employs over 40 people in each shift.
