Kolkata’s manufacturer-exporters believe that foreign demand may revive only in the 2010 winter season
The global recession may be showing signs of receding, but Kolkata’s leather manufacturers and exporters are still waiting to see the silver lining in the clouds. Many believe that this could happen in the ‘August winter season’ in 2010 as bulk orders in 2009 have seen no real change compared to the last year-and-a-half of the downturn.
“Orders have dried up completely. As far as the leather market is concerned, the United States market — our major export client for many years — has tanked in the past two years. Things are still tough and we have witnessed a drop in orders of almost 45-60 per cent during the slowdown,” said Tahir Hussein, proprietor, Rainbow Exporters, a leather manufacturing and exporting company based in Kolkata.
The fall in export demand has meant that an entire workforce, mostly comprising children, has been put out of work. But since the industry consists largely of an unorganised segment, data about the numbers laid off is not readily available.
There are those who have relied on the demand generated by the domestic market, but as far as leather is concerned, domestic demand cannot compare with export orders. Of the orders that are still trickling in, the majority is small orders. High-end and premium products are no longer in demand.
Satyabrata Mukherjee, managing director of Rene Exports, said that “at best” an improvement can be expected from June-July next year, since that is when purchases for the August winter season will start.
“Till then we are relying on domestic demand which, even in a best-case scenario, will not meet the export trade benefits. The only positive thing is that we have not really seen a drop in local demand. The puja season in Kolkata saw the usual surge in sales and with Diwali following, soon we hope to do some brisk business.”
There is also the problem with the Calcutta Leather Complex (CLC) unit at Bantala, about 14 km from Kolkata. With the onset of recession and a reduction in export demand, manufacturers no longer have money to buy land at the unit.
When contacted, Abhishek Dalmiya, director, M L Dalmiya & Company Ltd, BOT developer, CLC, said, “There was a visible halt in work at CLC due to the recession.” However, he sees some hope of conditions getting better in the near future.
“Things seem to have started improving of late, given the fact that after almost a year of no activity whatsoever, construction has started at CLC again. Almost 30 units have recently started construction work on the land they had purchased. This should be a sign of better things to come,” said Dalmiya.
There are two aspects of the leather trade that operates out of Kolkata — tanneries and exporters. The trade has been in the limelight after the Supreme Court in 2002 ordered a shutdown of tanneries that functioned from the Tangra-Topsia-Tiljala area of the city, citing threats to environment and health as the primary reason.
Since then the trade has witnessed a process of oscillation between big promises for the Calcutta Leather Complex at Bantala, and the infrastructure and management problems of the complex.
Despite the Supreme Court order and the presence of CLC, about 250 tanneries continue to function in Kolkata.
