PROSPECTS AND CHALLENGES FACED BY LEATHER

PRODUCT EXPORTERS OF AMBUR WITH SPECIFIC

REFERENCE TO YORK SHOES PVT LTD AS AN
ILLUSTRATIVE CASE

A Project Report Submitted to Bangalore University in Partial Fulfilment of the
academic requirements for award of
MASTER OF INTERNATIONAL BUSINESS

BY
MADHAN KUMAR D R
Reg.No - 124BMIB003

Under the Guidance of
PROF.SUNIL RAO



International Academy of Management & Entrepreneurship
Bangalore
Academic Year 2013- 2014



PROSPECTS AND CHALLENGES FACED BY LEATHER
PRODUCT EXPORTERS OF AMBUR WITH SPECIFIC
REFERENCE TO YORK SHOES PVT LTD AS AN
ILLUSTRATIVE CASE

A Project Report Submitted to Bangalore University in Partial Fulfilment of the
academic requirements for award of
MASTER OF INTERNATIONAL BUSINESS

BY
MADHAN KUMAR D R
Reg.No - 124BMIB003

Under the Guidance of
PROF.SUNIL RAO




International Academy of Management & Entrepreneurship
Bangalore
Academic Year 2013- 2014


CERTIFICATE

This is certify that Mr Madhan Kumar D R pursuing MIB under Bangalore University
(124BMI B003) has completed a Project during IV Semester and has made a report titled
PROSPECTS AND CHALLENGES FACED BY LEATHER PRODUCT EXPORTERS
OF AMBUR WITH SPECIFIC REFERENCE TO YORK SHOES PVT LTD AS AN
ILLUSTRATIVE CASE in Partial Fulfilment of the requirements for award of the degree
of MASTER OF INTERNATIONAL BUSINESS.
This is to further certify that this report is an original work of Mr Madhan Kumar D R.
and that this report has not been submitted for any other degree / diploma offered by
Bangalore University .




Guide Executive Director


Date:




































































DECLARATION


This report titled PROSPECTS AND CHALLENGES FACED BY LEATHER
PRODUCT EXPORTERS OF AMBUR WITH SPECIFIC REFERENCE TO YORK
SHOES PVT LTD AS AN ILLUSTRATIVE CASE is being submitted in Partial
Fulfilment of the requirements for award of the degree of MASTER OF
INTERNATIONAL BUSINESS by Bangalore University, as mandatory for the IV
Semester studies.

I hereby declare that the Project is my original work and that this report has not
been submitted and / or is not planned to be submitted for any other degree /
diploma offered by Bangalore University.



MADHAN KUMAR D R
Reg. No: 124BMIB003
Place :
Date :
ACKNOWLEDGEMENT


The purpose, initiative and best result of this project would be incomplete
without the guidance and encouragement of the below mentioned people. I believe that
this project is going through the level ahead of my understanding and the success would
have never been possible without my guiding people. I script on this page my sincerest
thanks to each one of them.

I take great privilege and great pleasure to express my sincere and heart full thanks to
Dr. B K Murty, Dean of International Academy of Management & Entrepreneurship,
Bangalore, for providing me the facilities in the institution to complete my project
successfully. I sincerely thank Mr. Bilu M V, Executive Director of International
Academy of Management & Entrepreneurship, Bangalore. My heart full thanks to
Prof. Sunil Rao, Principal of the institution for his full support throughout the project
duration.

I express my heart full thanks to Mr. N.Balasubramaniam, Managing director
of YORK SHOES PVT LTD, AMBUR for all his support and help to do my project
effectively and also to all members of the company for their warm attitude throughout my
project period.



MADHAN KUMAR D R





TABLE OF CONTENTS
CHAPTER
NO
PARTICULARS PAGE
NO.
1
INTRODUCTION 1-3
2
COMPANY PROFILE 4-8

2.1 DEVELOPMENT & TESTING 6

2.2 CRAFTMANSHIP 7
3 RESEARCH DESIGN 9-11
3.1 AIM 9
3.2 OBJECTIVES 9
3.3 PURPOSE OF THE STUDY 9
3.4 RESEARCH QUESTIONS 10
3.5 RESEARCH DESIGN 10
3.6 SAMPLING PLAN 10
3.7 METHODOLOGY 11
3.8 TOOLS FOR DATA COLLECTION 11
3.9 LIMITATIONS 11
4
LITERATURE SURVEY
12-34
4.1 ISSUES 13-15
4.1.1 THE INDUSTRYS GLOBAL
PERSPECTIVE
13
4.1.2 HIDES AND SKIN PRODUCTION
AND TRADE
14
4.1.3 ENVIRONMENTAL IMPACT OF
LEATHER INDUSTRY
14
4.1.4 MARKET EXTERNALITIES 15
4.2 CHALLENGES 15-17
4.2.1 TECHNICAL BARRIERS 15
4.2.2 SMALL AND MEDIUM
ENTERPRISES
15
4.2.3 ECONOMIC BARRIERS 15-16
4.2.4 INADEQUATE LEGISLATION AND
LACK OF MONITORING FACILITIES
16
4.2.5 SOCIAL BARRIERS 16
4.2.6 TECHNICAL ASSISTANCE
LABORATORIES
16-17
4.3 LEATHER MANUFACTURING PROCESS: 17-21
4.3.1 CURING: 17
4.3.2 SOAKING: 17
4.3.3 DE-HAIRING: 17
4.3.4 FLESHING: 18
4.3.5 DE-LIMING 18
4.3.6 PICKLING 18
4.3.7 LEATHER TANNING 18
4.3.8 WRINGING 20
4.3.9 SPLITTING 20
4.3.10 SHAVING 20
4.3.11 RE-LEATHER TANNING 20


4.3.12 COLORING 20
4.3.13 FATLIQUORING 20
4.3.14 SETTING OUT 20
4.3.15 TOGGLING 20
4.3.16 STAKING 20
4.3.17 DRY MILLING 21
4.3.18 BUFFING 21
4.3.19 FINISHING 21
4.3.20 PLATING 21
4.4 GOVERNMENT REGULATION AND
SUPPORT
21-23
4.5 METHODOLOGY 24
4.6 COVERAGE 24-26
4.6.1 LEATHER INDUSTRIES 24
4.6.2 WORKERS 25
4.6.3 PAN WALA 25
4.6.4 VILLAGERS 25-26
4.6.5 WASTEWATER TREATMENT PLANT 26
4.7 ANALYSIS OF PRIMARY AND
SECONDARY INFORMATION
27-29
4.7.1 GOVERNMENT 27
4.7.2 CETP 28
4.7.3 INDUSTRIALIST 28
4.7.4 COMMON MAN (FARMERS) 29
4.7.4.1 ECONOMICAL 29
4.7.4.2 HEALTH 29
4.8 SUGGESTIONS AND CONCLUSIONS 29-33
4.8.1 GOVERNMENT REGULATIONS 30
4.8.2 EFFECTIVE MONITORING
30
4.8.3 INTER LEATHER INDUSTRY
MONITORING
31
4.8.4 ECO LABELLING 31
4.8.5 FINANCIAL SUPPORT 31
4.8.6 QUALITATIVE BOOST 32
4.8.7 HUMAN RESOURCE DEVELOPMENT 32
4.8.8 DEVELOPMENT OF COMMERCIAL
PLANTS
32-33
4.8.9 OTHERS 33
4.9 SWOT ANALYSIS 34
5 ANALYSIS, INTERPRETATION AND
FINDINGS
35-87
5.1 DATA ANALYSIS OF THE COMPANY 36-41
5.1.1 KEY DRIVERS 42
5.1.2 CORE VALUES 42
5.1.3 LEATHER DEVELOPMENT 42
5.1.4 INFORMATION TECHNOLOGY 42
5.1.5 COMPANY STRUCTURE 43
5.2 LEATHER INDUSTRY ANALYSIS IN
DETAILS
43-87
5.2.1 FINISHED LEATHER 43-52
5.2.2 FOOTWEAR INDUSTRY 52-62
5.2.3 LEATHER GARMENTS 62-69
5.2.4 LEATHER GOODS, ACCESSORIES
& GLOVES
70-81
5.2.5 SADDLERY & HARNESS 81-87
6
CONSLUSION &
RECOMMENDATION
88

BIBILIOGRAPHY


ANNEXURE





























S.No LIST OF TABLES Page number
Table 1 Indias Leather industry export data 35
Table 2 Finished leather import and export 44
Table 3
Major importing countries of
finished leather
45
Table 4
Exporting countries of finished
leather
46
Table 5 Live stock production 48
Table 6 Indias export of finished leather 48
Table 7
Indias export markets for finished
leather
49
Table 8
Quality wise export of finished
leather
50
Table 9
Region wise export of finished
leather
51
Table 10
Major importing countries of
Footwear
56
Table 11
Major exporting countries of
footwear
56
Table 12
Global import and indias export of
footwear
58
Table 13 Indias export of footwear 60
Table 14 Global scenario of Leather garments 62
Table 15
Major importing countries of leather
garments
63
Table 16
Major exporting countries of leather
garments
64
Table 17 Indias export on leather garments 66
Table 18
Indias Major export market of
leather garments
67
Table 19
Region wise export of leather
garments
68
Table 20
Quality wise export of leather
garments
69
Table 21
Region wise export of leather
garments in pieces
70
Table 22
Global scenario on leather goods,
accessories and gloves
71
Table 23
Major importing countries of
Leather goods & accs
72
Table 24
Top exporting countries of leather
goods and accs
73
Table 25 Global scenario on leather gloves 74
Table 26
Major importing countries of leather
gloves
75
Table 27
Major exporting countries of leather
gloves
75
Table 28
Indias export of leather goods, accs
& gloves
77
Table 29 Indias export of leather gloves 77
Table 30
Country wise indias leather goods
& accs export
78
Table 31 Quality wise export of leather goods 79
Table 32
Quality wise export of leather
gloves in pieces
80
Table 33 Region wise export of leathergoods 81
Table 34 Region wise export of leather gloves 81
Table 35
Global scenario on saddlery &
harness
82
Table 36
Major exporting countries of
saddlery & harness
83
Table 37
Top exporting countries of saddler
& harness
84
Table 38 Indias export of saddler & harness 85
Table 39
Major market for indias saddlery &
harness
87
Table 40
Quality wise export of harness &
saddlery
88
Table 41
Region wise export of harness and
saddlery
89


S.No LIST OF FIGURES Page number
Figure 1
General flow diagram for leather
tanning and finishing process
19
Figure 2
General leather industry business
structure
36
Figure 3 Pollution control norms 36
Figure 4 Friendly environment 37
Figure 5
Major role in growth of indian
economy
37
Figure 6 Major source of work 38
Figure 7 Income for cost of living 38
Figure 8 Demand for product 39
Figure 9 Major source of income 39
Figure 10 Employment retension rate 40
Figure 11 Government subsidies 40
Figure 12 Support of local people 41
Figure 13 Problem of contaminated water 41
Figure 14 Structure of leather industry 43
Figure 15
Work import vs Indias export of
finished leather
44
Figure 16 Finished leather exporting countries 46
Figure 17 Finished leather exporting countries 47
Figure 18 Indias finished leather export 50
Figure 19
Quality wise export of finished
leather
51
Figure 20 Region wise export of finished leather 52
Figure 21
Major importing countries of
Footwear
57
Figure 22 Major exporting countries of footwear 58
Figure 23 Indias footwear export growth 59
Figure 24 Indias Footwear export 61
Figure 25
World import and indias export on
leather garments
63
Figure 26
Major Leather garments importing
countries
64
Figure 27 Major exporting countries of leather 65
garments
Figure 28 Indias export of leather garments 66
Figure 29
Indias Major export market of leather
garments
68
Figure 30
Quality wise export of leather
garments
70
Figure 31
Global scenario on leather goods,
gloves & accessories
71
Figure 32
Major importing countries of leather
goods and accs
72
Figure 33
Top exporting countries of leather
goods & accs
74
Figure 34 Indias export of leather gloves 78
Figure 35
Country wise indias leather goods &
accs export
78
Figure 36 Quality wise export of leather goods 80
Figure 37
Global scenario on saddlery &
harness
83
Figure 38 Indias saddlery & harness export 86
Figure 39
Major market for indias saddlery &
harness
88
Figure 40
Quality wise export of harness &
saddlery
89
Figure 41
Positive trend in exports: share of
leather and leather products
89








1 | P a g e

CHAPTER-1
INTRODUCTION
Leather entrepreneurs are one of the largest foreign exchange earners of our
country, who unfailingly give a boost to the national economy and per capita income.
Leather industry provides more employment opportunities to the backward communities.
Even so, the industry is facing innumerable problems in the functional areas due to the
banning of slaughtering of animals in the name of sacrifice, and safeguarding the poor
that has resulted in the closure of many units in Tamil Nadu especially in Erode District.
The goat skins available in Erode are considered to be of the best quality in the world.
There are 62 tannery units in Erode, out of which only 42 units are functional, and the rest
are closed by the pollution board due to some environmental problems. Besides, leather
entrepreneurs are facing a lot of problems in the areas of production, processing,
marketing, finance and personnel. This study attempted to identify the common problems
faced by the leather entrepreneurs. For this purpose, data were collected through
questionnaires and analyzed using Henry Garret Technique. This study identifies the most
important problems in each functional area such as inadequate funds to construct water
effluent treatment plants, delay in payment by the buyers, slow process in sanctioning
funds by bankers, unauthorized labour absenteeism, poor quality of equipments and
government restrictions.
Though the industry has expanded rapidly in different parts of the country, most of the
units are in a state of decline. In any organization efficient management is inevitable. If
there is a slight disorder, the whole system collapses gradually. It becomes difficult to
rebuild it. The leather entrepreneurs are facing a number of problems both internally and
externally. The new policies framed by the Government of India directly affect the
functional areas of leather industry. In the name of holiness, some powers are trying to
implement ban on slaughtering of animals totally and stringent pollution norms are being
adopted by the State and Central Governments, which are directly affecting the growth
and progress of leather industry. This reflects in the closure of some units and creating
unemployment problems especially for semiliterate, illiterate and downtrodden
communities.

2 | P a g e


Leather exports from India could touch $8.25 billion by 2013-14, more than double the $
3.40 billion it exported in 2009-10. India's leather exports are likely to grow 20 per cent at
$6 billion by the end of the current fiscal, and may even touch $14-billion mark by the
end of the 12th Five Year Plan, the Council for Leather Exports said. Leather exports are
expected to rise by 20 per cent to $6 billion by end of the current fiscal, and the industry
has a target to achieve $14 billion by 2016-17
The leather industry employs about 2.5 million people and has annual turn over of
Rs.25,000 crores. The industry is also one with strong links with the social structure
throughcaste and community.

The leather and leather products industry is one of Indias oldest manufacturing industries
that catered to the international market right from the middle of the nineteenth century,
the demand for its products being both domestic as well as international right from the
beginning. About 46 per cent of the production in the sector is exported and it ranks
eighth in the list of Indias top export earning industries and contributes roughly Rs.
10,000 crores per annum, i.e., about 4 per cent to export earnings.

The sector accounts for 2.5 per cent of the global leather-related trade of Rs. 387,200
crores. An estimated 15 per cent of total purchase of leading global brands in footwear,
garments, leather goods & accessories, in Europe, and 10 percent of global supply is
outsourced from India.

To be more specific, the major production centers of leather and leather products are
located at Chennai, Ambur, Ranipet, Vaniyambadi, Trichy, Dindigul in Tamil Nadu,
Kolkata in West Bengal, Ambur and Agra in U.P., Jallandhar in Punjab, Delhi,
Hyderabad in Andhra Pradesh, Bangalore in Karnataka and Mumbai in Maharashtra.
Tamil Nadu is the biggest leather exporter (40%) of the country and its share in Indias
output on leather products is 70%.

Leather industry in Tamil Nadu is considered to be very ancient and some say it is of
more than two centuries old. The art of tanning of hides and skins is prevalent here since
time immemorial. Once it was done in primitive tanning methods and passed on with
some improvements from generation to generation.
3 | P a g e

Ambur houses hundreds of leather tanning and manufacturing facilities. It is a leading
cluster for export of finished leather, shoe uppers, full shoes and is a major contributor to
India's leather and leather-related products. Factories here manufacture shoes for world's
leading footwear brand names like Effegi, Florsheim Shoe, Lumberjack, Cole Haan,
Gabor, Primigi, Caterpillar, Clarks, Sioux, Fretzmen, Hi-Line, Hugo Boss, Marc,
NunnBush NXT and many more. Some of the prominent names that have set up
manufacturing units here are Farida Group, Safura Group,SSC Group, Bonaventure
Shoes, NMZ Group of Industries, TAW Group, KAR Group, NMH & Co., Florence,
Irbaz Shoes, Mohib Shoes, ESAAR Group, Harmain Leather Exports, etc., and now FDIs
(Foreign Direct Investments) have become very common, to name a few establishments
ITARES (Italy Renzi Shoes) of Italy, Allen Solly of Switzerland etc. These companies
provide a major chunk of employment to the local population which is skilled. Traders
who supply shoe materials, chemicals to these companies have huge business
opportunities over here.

Ambur has been recognized as 'Town of Export Excellence' for leather products
by Government of India. "Ambur Trade Centre" has been constructed with financial
contribution from Indian government and the leather industry which provides a platform
for holding international exhibitions, conferences, workshops, and Leather Testing
Services TUV has their Sample Collection office at this premises.

One of the problems that Ambur faces is polluted ground water which is not potable due
to the chemicals released by the leather tanneries directly into the most-of-the-time-
dry Palar River traversing across Ambur before the Common Effluent Treatment
Plants that use Reverse Osmosis process were installed. However, with strict measures
taken by the State Government in the interest of public and to preserve the water table
pollution-free, most of the companies have now installed effluent treatment plants to treat
the water from harsh chemicals such as hexavalent chromium, trivalent chromium, etc.




4 | P a g e

CHAPTER-2
COMPANY PROFILE - YORK SHOES PVT LTD:

York Shoes Private Limited is a Private Company incorporated on 12 December 2007. It
is classified as Indian Non-Government Company and is registered at Registrar of
Companies, Chennai. Its authorized share capital is Rs. 73,000,000 and its paid up capital
is Rs. 72,573,104.

York Shoes Private Limited's Annual General Meeting (AGM) was last held on 30
September 2013 and as per records from Ministry of Corporate Affairs (MCA), its
balance sheet was last filed on 31 March 2013.

India's first proposal for 100 percent FDI in single-brand retail got FIPB nod. The
proposal is by luxury shoe-maker Pavers England. York shoes manufactures Shoes for
Pavers England and they export it to UK.

With Mauritius-based Pavers Foresight Smart Ventures investing in a footwear design
facility, the difficulty of leather firms in developing newer designs in conformity with the
latest trends and international standards may be addressed.

Pavers Foresight has set up a world-class footwear design development studio, supported
by a shoe-making unit under a wholly-owned subsidiary called York Shoes at Ambur in
Tamil Nadu, one of India's prominent leather belts, at an investment of $3 million. The
design studio and the shoe-making unit, which have come up on a three-acre area,
commenced operations recently.

The studio is the first of its kind in India and will help companies develop European
comfort footwear customised to the needs of Indian consumers. "York shoes pvt ltds
objective is to get western design and development for the Indian market. European
designs will be transferred here through our new studio, which will work with product
development and design teams in Europe, China and Brazil, with manufacturing support.

5 | P a g e

York Shoes is in discussion with a few top international brands for design tie-ups and
hopes to conclude some agreements shortly.

The manufacturing unit of York Shoes at Ambur will initially have a capacity of 2.5 lakh
pairs a year and it will be scaled up based on the demand. They have also forged
agreements for component sourcing from China. The Ambur operations are expected to
generate 300 job opportunities.

At present, the leather industry lacks design capabilities. Most exporters, be it in footwear
or other products, supply to private labels, retail stores and major brands. None of the
Indian leather exporters owns a reputed, multi-market and well-known brand of their own
due to difficulty in making latest designs. Indian exporters most of the time reproduce the
designs developed by the brand owners and are not in a position to demand a price for
their product, according to a representative of leather industry association.

Pavers Foresight Smart Ventures Ltd, an equal joint venture between London-based $450
million Foresight Group and $150 million Pavers Ltd, footwear retail major in UK, has a
$60 million war-chest to invest in India in a few sectors, including leather.

www.pavers.co.uk





6 | P a g e


2.1 DEVELOPMENT & TESTING:

A dedicated R&D lab at York shoes pvt ltd constantly researches for the latest trends and
colors in leather. Marketing teams frequently visit important fashion destinations in
Europe and USA to bring back feedback on the latest trends and fashion. Based on this
new articles are developed continuously and presented to valued customers. The tannery
also engages the services of designers from Europe and USA to create the latest color
palettes which are incorporated in all its articles. The R&D lab has an independent team
of workers, technicians and equipment to develop new leathers, work on standardisation
of process and churn out samples on a daily basis for customers.

York Shoes is a producer of fashion comfort shoes with in-house design and development
facilities. With a capacity to make 3000 pairs/day, York shoes produces high quality
mens shoes and ladies boots. York shoes specialises in corner stitch shoes, strobel,
cements and moccasins.

R&D cell of the Company.
7 | P a g e



2.2 CRAFTMANSHIP:

With over 20 years of experience in shoe making, York shoes has a team of highly skilled
& dedicated workers and technicians who bring out the best in quality during production.
The team is highly skilled in doing precision operations like stitching or lasting in various
constructions including cement, strobel, moccasin or lady boots. The factory caters to the
demands of top brands across the globe and has gained excellent expertise over time.



Craftmanship
8 | P a g e




9 | P a g e

CHAPTER-3
RESEARCH DESIGN
3.1 AIM:
This project aims to study the challenges faced by leather manufactures in and around
ambur and the strategies they are taking to overcome the same.

3.2 OBJECTIVES:
1. To assess the problems being faced by the leather product manufacturing units.
2. To assess the survival strategies of the leather product manufacturing units.
3. To assess and analyse the impact of globalization on indian leather product
manufacturing units.
4. To examine the impact of government measures to support leather product
manufacturing units.

3.3 PURPOSE OF THE STUDY:
Ambur is known for its leather industry and many leather exporters in india have their
manufacturing units in and around the place.
But due to environmental concerns such as pollutions by the leather tanneries smaller players felt
their business became unviable and larger players felt that their business was being tested across
levels for their very survival.
The purpose of the study is to address these concerns and obtain first hand data from many of the
manufactures of the leather goods and showcase YORK SHOES PVT LTD as an illustrative case
and how they are able to survive in an industry with restrictive external atmosphere.
This case studies in-depth the problems faced by the industry and is chosen for an illustrative
purposes with the notion that it is one of the small time companies which exports most of its
products.


10 | P a g e

3.4 RESEARCH QUESTIONS:
1. What are the problems faced by the different functional areas by the management
in the leather industry?
2. What are the key strategies adopted by the companies in the leather industry to
remain competitive?
3. The effect of quotas with the leather manufacturing industry.
4. Measures adopted by the government to help the industry.


3.5 RESEARCH DESIGN
The survey method is used to study the various market and industry variables related to
the stated problem. For this a standardised questionnaire is used and administered to
various key managerial personnel across functions in the chosen company also a
questionnaire is administered to different companies in the region to get a generalised
response to the common industry problems.
Since the study is limited to Ambur, only companies of similar size are chosen randomly
to get a first hand response which they all collectively face in the industry as a whole.
Purposive sampling is used to collect primary data this is supported by secondary data
from company, industry and trade journals.


3.6 SAMPLING PLAN
Sampling Method Purposive Sampling
Sampling Size And Unit 20 Companies In And Around Ambur

11 | P a g e

3.7 METHODOLOGY
Both descriptive and inferential methods are used to study the various variables of the
project in line with the objectives. The study may include frequency analysis,
descriptive analysis, cross tabulation, modelling, correlation analysis, regression
analysis and /or hypothesis testing if needed. Both univariate and multivariate
methods may be used depending upon the nature and quality of the data. Before the
actual analysis is carried out the questionnaire itself is tested for its reliability as an
instrument and internal consistency of responses.


3.8 TOOLS FOR DATA COLLECTION:
As stated above a standardized questionnaire is used to collect primary data and to study
the variables related to industry, company and environment

3.9 LIMITATIONS
Since the project attempts to study sensitive information which have to be obtained from
companies across the chosen area its limited in terms of sample size but compensated by
the depth of the study. The project researcher is bound by an NDA (Non-disclosure
agreement) and hence some of the data though relevant and crucial may not be taken or
disclosed for obvious reasons.
Hence only a peripheral study is done whereas an in-depth study could be attempted for
policy research for those wishing to pursue higher research studies.



12 | P a g e

CHAPTER-4
LITERATURE SURVEY:

The Leather industry is known to be very polluting especially through effluents high
in organic and inorganic dissolved and suspended solids content accompanied by
propensities for high oxygen demand and containing potentially toxic metal salt residues.
Disagreeable odour emanating from the decomposition of protein solid waste, presence
of hydrogen sulphide, ammonia and volatile organic compounds are normally associated
with leather tanning activities.

A significant part of the chemical used in the leather processing is not actually absorbed
in the process but is discharged into the environment.

Liquid effluent from light leather processing contains organic matter, chromium,
sulphide, and solid waste includes fleshing, wet blue splits, trimmings and shavings,
buffing dust etc. The substantial relocation of leather production from the industrialized
countries to the developing countries which occurred between the 1960s and the 1980s
(known as "The Big Shift") in effect moved the most highly polluting part of the process
away from the OECD countries.This occured under the pressure of increasing cost of
labour and cost of effluent treatment installations and operations. This process was
accelerated by a combination of restrictions in exports of raw hides and skins and various
incentives for higher processing levels provided in developing countries.

Since over 80 per cent of the organic pollution load in terms of BOD comes from early
wet processing, this is the primary target of most pollution control measures. Low waste
technologies, generally speaking, require better skilled personnel and closer technical
control than conventional processing. Thus, the lack of properly trained staff at different
levels remains one of the crucial constraints. The main barriers to the adoption of more
environmentally acceptable methods of leather processing and effluent treatment are the
additional costs as follows: specialty chemicals required in reducing or eliminating the
use of the main polluting chemicals; the cost of purchase and installation of water
conservation devices, wastewater collection and reuse equipment; effluent treatment
chemicals and process and effluent monitoring equipment; extra personnel and training
13 | P a g e

to maintain technical control of low waste technologies and effluent treatment. Another
factor is the traditional conservatism derived from hesitation over process alterations
especially when satisfactory leather is being currently produced. This is particularly the
case in small to medium scale semi-mechanized family owned units. Another barrier is
the frequent remoteness of government-backed R & D facilities from everyday
practicalities of leather- making, together with reluctance on the part of traditional tanner
groups where resistance to change is compounded by political influence.

The beam-house (un-hairing) and the tan-yard require cleaner technologies in leather
processing. Also utilization of chrome-free solids as by-products and disposal of chrome
containing sludge are possibly the main issues that need particular attention. However,
legislation enforcement agencies lack skilled personnel to monitor performance of
installed treatment plants. The cost of introducing a cleaner processing method may be
prohibitive and beyond reach of a small scale tanner. The price of a special drum for hair
save unhairing with the necessary auxiliary equipment may be as much as twice the
conventional drum. Enzyme unhairing needs very accurate control and consistency of all
parameters (pH, temperature, float, etc) which is possible to achieve only in rather
sophisticated Leather industries and it is associated with higher production costs (partly
off-set by lower wastewater treatment expenses). High chrome exhaustion leather
tanning requires very expensive specialty chemicals, normally proprietary products.
Effluent treatment costs depend on specific site conditions, and vary within a very wide
range.
4.1 ISSUES
4.1.1 THE INDUSTRYS GLOBAL PERSPECTIVE
The leather and its related downstream industries can claim to be the world's largest
industrial sector based upon a by-product. In the case of leather, the raw material is a by-
product of the meat industry. Hides and skins and their downstream products are vital
earners of foreign exchange and they compare very well with the other agricultural
commodities and, in fact, with any internationally traded commodities. This industry
helps convertible a putrescible material into a stable and marketable product.


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4.1.2 HIDES AND SKINS PRODUCTION AND TRADE
Dependence on the market for meat:
Availability of hides and skins is governed mainly by the demand for red meat. A
governing feature of the leather industry is in the elastic nature of its raw material supply.
The bulk of bovine hides and ovine and caprine skins in industrialized countries are
marketed to the leather industry and thus the number of heads slaughtered is roughly
equivalent to the number of hides and skins available. A significant part of hides and
skins is lost to Leather industry people mainly in least developed countries in Africa
owing to lack of marketing infrastructure, monopolies of various kinds or diversion into
other uses such as food, tents, ropes, etc. Bovine hide is by far the most important raw
material for the leather industry. Off-take ratio (i.e. weight per hide and skin) is very high
in developed countries as compared to the developing countries which contribute about
70% of world bovine hide.
Change in global pattern of demand for hides and skins:

The leather industry has expanded substantially in the developing countries. A
consequence of production expansion in some developing countries is that Leather
industry input demands have outstripped locally available supplies and imports from the
developed countries have become essential.
4.1.3 ENVIRONMENTAL IMPACT OF LEATHER INDUSTRY
The leather sector is well known for its effluent problems. The polluting nature of
Leather industries is evident from the notorious odour that characterizes Leather
industries and Leather industry zones. While local populations are daily aware of the air
pollution, local authorities are equally, if not more concerned about Leather industries'
liquid effluents which tend to be high in organic and inorganic suspended solids content
accompanied by propensities for high oxygen demand and containing potentially toxic
metal salt residues. Treatment technologies in effect reduce pollutants in the liquid form
and convert them into semi-solid or solid forms. Threat is being transferred from
receiving waters to receiving land. Because sludge can affect the quality of soil and
groundwater, it is understandable that local authorities and governments should be
concerned that the disposal of sludge to soils and dry wastes to landfill should not
adversely affect the fertility of soil, nor that metal salt residues, such as chromium,
should inhibit crop growth in any way.
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4.1.4 MARKET EXTERNALITIES
Economic, political and technological developments in several industries impinge
upon the future characteristics of the leather industry, covering all contingent industries
from livestock agriculture to finished goods industries and the markets that they serve.
With the growth in the purchasing power of people, there is always an increased demand
for inexpensive leather.
4.2 CHALLENGES
4.2.1 TECHNICAL BARRIERS
By nature, Leather industry people are very conservative. This is not simply obstinacy
against change; it is because the quality and character of leather is prone to change when
the parameters of processing are altered. Changes in the length of processes, process
temperatures, float volumes, uptake of chemicals etc. influence the ultimate character of
the leather. Leather being produced from a complex, non-uniform natural protein material
still requires considerable craft in its manufacture. The adoption of low waste technology
often requires a radical alteration of most Leather industry processes while, at the same
time, ensuring that the ultimate product retains its marketable properties. Therefore if a
tanner is producing consistent quality of leather which satisfies his customers using a
process which may be wasteful in water, energy and chemical utilization, he may resist
altering his operations to comply with environmental demands.
4.2.2 SMALL AND MEDIUM ENTERPRISES
In most developing countries leather tanning operations is a family business, carried
out in small to medium scale semi-mechanized units, very frequently grouped tightly in
clusters which used to be outside residential areas. Leather industry people in such units
have no formal education and have little or no understanding of the complexities of the
leather processing, their skills acquired from their elders with hardly any perception of
environmental protection Low waste technologies, generally speaking, require better
skilled personnel and closer technical control than conventional processing. Thus, lack of
properly trained staff at different levels remains one of the crucial constraints.
4.2.3 ECONOMIC BARRIERS
In developing countries, leather industry suffers from economic constraints. They
suffer the often inordinately high cost of capital or inflation rates. Amount of capital tied
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up in work in-progress has increased along with the necessity to keep higher inventories
of chemicals, machinery spares, etc. Because of problems with poor infrastructure in
many developing countries, the Leather industries have always kept higher stocks of
chemicals than their counterparts in developed countries, against the contingency of
delays in delivery from ports. Another disadvantage is the imposition of import duties on
chemicals and machinery. Few specialty chemicals for leather tanning are produced in
developing countries, although basic chemicals such as salt, lime, sulphuric acid, sodium
sulphate or sodium carbonate may be available indigenously. Most leather tanning
materials, dyes, fat liquors, special auxiliaries and finishes need to be imported.
4.2.4 INADEQUATE LEGISLATION AND LACK OF MONITORING
FACILITIES
Pollutant discharge standards in most developing countries are by nature rigid and
have a disregard for specific site conditions. Instead of a gradual approach as called for
which would phase installation of treatment facilities (for example the physico-chemical
first followed by the biological treatment and appropriate sludge handling) a tanner is
under pressure to put up a complete treatment system and meet all discharge limitations
at once which is beyond his financial and technical means. However, very few Leather
industry people have the necessary process and effluent treatment control facilities and
legislation enforcement agencies usually lack skilled personnel to monitor performance
of the installed treatment plants.
4.2.5 SOCIAL BARRIERS
Governments often feel inhibited from dealing with problems related to modernising
of the Leather industries because of the social and even political upheaval that would
occur. The problem is further exacerbated where Leather industry people are traditionally
regarded as socially inferior because of the nature of their work. These groups, because
of traditional discrimination, have amassed considerable political privileges.
Consequently there are difficulties in altering the structure of artisan industry.
4.2.6 TECHNICAL ASSISTANCE LABORATORIES
Most of the major leather and footwear producing developed and developing
countries have research and development laboratories and technological teaching
facilities. It is usual that either the R & D laboratories or the teaching establishments, or
both, have pilot Leather industries in which technological developments are taken a stage
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further towards commercial leather production by industry. Some of these have pilot
effluent treatment facilities which are of benefit in helping the local industry adopt
relevant methods of emission limitation and treatment. Nevertheless there remains a
problem in transferring technology from laboratory and pilot plant of an R & D to
practical everyday use in the industry.

The objective of this study is to analyze the leather industries in Ambur, T.N.,located on
the southern bank of the river Palar to study the technology adopted by Leather industries
in production of leather from hides and disposal of solid and liquid waste. The
motivation towards this work is to investigate the role played by government in
promoting social, economical and environmental concerns related to leather industry.
The focus has been towards describing how different issues and interests result into
conflicts and how does it affect the socio-economic environment.

4.3 LEATHER MANUFACTURING PROCESS:
The processing of hides and skins into leather is a complex procedure that requires a
precise combination of many chemical and mechanical operations. A step-by-step
diagram of these processing operations is shown in Figure 3.1.
4.3.1 CURING: Deterioration begins immediately when a cow is killed. After the hides
are removed from the carcass, they are salted through and through at the slaughterhouses
to prevent decay. After they are salted, 55% of the water in the hide is removed, and they
are dried for 3 to 6 days. The rawhides are then sold to Leather industries.
4.3.2 SOAKING: In order for the leather tanning process to work properly, the dry
salted hides must be washed free of the salt. This is done by soaking the hides in water to
which chemical wetting agents (similar to household detergents) and disinfectants are
usually added for 8 to 20 hours, depending on the thickness of the hides. This soaking
procedure rehydrates the hides to their original flaccid condition and removes the dirt.
4.3.3 DE-HAIRING: The hair must now be removed from the hides. This is done by
soaking the hides in chemicals, or depilatory agents, which destroy the hair by attacking
the hair root so it will release freely from the hides, loosen the epidermis, and remove
certain soluble skin proteins that lie within the hide substance without destroying the
desirable collagen of the hides.

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4.3.4 FLESHING: Excess flesh, fat and muscle must now be removed from the hides.
This is done with a fleshing machine.
4.3.5 DE-LIMING: All the depilatory chemicals must now be removed from the hides.
This is done by washing the hides in ammonium sulfate or ammonium chloride and then
clear water in big drums. These chemicals not only clean the depilatory chemicals from
the hides, they also adjust the acid-alkaline conditions (pH) to the proper point for
receiving the bate, which are enzymes similar to those found in the digestive system of
animals. When the bates are applied, they attack and destroy most of the remaining
undesirable constituents of the hide.
4.3.6 PICKLING: The hides must be placed in an acid environment (low pH) so they
will be ready to accept the leather tanning materials, because chrome leather tanning
agents are not soluble under alkaline conditions. This is accomplished by adding salt and
acid to the hides. This is a preserving process in itself, and hides can be kept in this state
for extended periods of time without any deterioration.
4.3.7 LEATHER TANNING: The raw collagen fibers of the hides must be converted
into a stable product which is no longer susceptible to rotting. This is done by adding
chrome leather tanning agents to the hides in a revolving drum. These leather tanning
agents also significantly improve the hide's dimensional stability, abrasion resistance,
resistance to chemicals and to heat, the ability to flex innumerable times without
breaking, and the ability to endure repeated cycles of wetting and drying.

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General flow diagram for leather tanning and finishing process

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4.3.8 WRINGING: The excess moisture must be removed from the hides. This is done
by placing each hide through two large rollers similar to those on a clothes wringer.
4.3.9 SPLITTING: The hides must now be split into the desired thickness. Unsplit hides
average to be 5mm thick. The thickness for upholstery leathers range from .9mm to
2.0mm. The hides are put through a splitting machine that is set to split the hides to the
desired thickness. It cuts the top grain off first. Another layer, and sometimes two, is cut.
These layers are called splits.
4.3.10 SHAVING: The thickness of the hides must be made uniform all over the hide.
This is done with a shaving machine through which the hides are run. The helical shaped
cutting blades level the overall thickness to exact specifications and open the fiber
structure to better receive subsequent chemical processing.
4.3.11 RE-LEATHER TANNING: This process is done to impart special end-use
properties with other leather tanning chemicals. The substances used add solidity and
body to chrome leather and help minimize variations in the character of the leather that
may still exist between different parts of the hide.
4.3.12 COLORING: As soon as the releather tanning process is completed, aniline dyes,
derived primarily from petroleum and added to very hot water, are added to rotating
drums to penetrate the hides for desired color.
4.3.13 FATLIQUORING: This is the last of the wet chemical operations to which the
leather will be subjected. Fatliquoring has the most pronounced effect on how soft leather
will be and it contributes greatly to its tensile strength. The more fatliquors that are
added, the softer the hides will be.
4.3.14 SETTING OUT: This operation smoothes and stretches the hide, while
compressing and squeezing out the excess moisture. This puts the hides in the proper
condition for drying.
4.3.15 TOGGLING: The hides are stretched across a perforated frame and held in place
with clips called toggles. One hide is clipped to each side of the frame. The frames are
then slid into channels in drying ovens.
4.3.16 STAKING: Leather is staked to make it pliable. In combination with the correct
fatliquoring treatment, staking governs the final firmness or softness of the leather.

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4.3.17 DRY MILLING: The hides are placed in a large dry drum and tumbled until the
desired softness is obtained.

4.3.18 BUFFING: This process improves the final appearance of the hides by lightly
sanding the surface to remove some of the natural imperfections such as scratches, healed
scars, etc. It provides the hide with better cutting yield.

4.3.19 FINISHING: This process applies film-forming materials on the surface of the
hide. Here is where layers of pigments are added if required. This process also adds the
protective sealant to the surface.
4.3.20 PLATING: This is the final step in the leather process. During this process, heat
presses a chosen grain into the surface of the hides.
4.4 GOVERNMENT REGULATION AND SUPPORT
Since pollution is considered an externality, i.e. a cost of production that is not
included in a products market price, it is also considered a market inefficiency that the
government could (or should) regulate to correct. Environmental regulation is the single
most important factor to influence firms to consider environmental issues. But do
regulations automatically result in implementation? Or what needs to be in place for the
firms to take the regulations into action? A firms decision to comply with regulation is
connected to the cost of non compliance, meaning that the regulations need to be
enforced by some controlling authority capable of presenting real negative threats (such
as a fine or a penalty) for the industry in question for firms. The decision of how to
respond to environmental regulations is based on a consideration of the potential
economic benefits or disadvantages of complying and not complying. Firms that are
more restricted financially (often smaller firms) are less likely to formulate an
environmental plan than firms that are better of. Hence, less profitable firms are more
likely to have a lower environmental performance. In addition, the regulators must have
the administrative capacity to enforce the regulations.
For the leather tanning industry, there are no international regulations, only domestic.
However, the want to increase exports may induce governments and firms to let
regulation other than the domestic influence production activities. The Government of
India has announced various initiatives to make the leather industry more competitive.

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Key policy initiatives include:
1. De-licensing of integrated Leather industries that convert raw hides and skins into
finished leather. Several leather goods have been de-reserved from the Small Scale
sector.
2. Free import of raw hides & skins, semi-finished and finished leather.
3. Concessional duty on imported machinery and chemicals.
4. Free export of raw hides & skins, semi-finished and finished leather and leather
products.
5. Policies to facilitate modernisation / upgradation: In June 2005 the government
initiated a US$ 64 million modernising scheme called the Integrated Leather
Development Programme, whereby all leather leather tanning and product units
would be eligible for modernisation assistance. The assistance would be to the extent
of 30 per cent of project cost for SSI units and 20 per cent for non-SSI units,
subjected to a ceiling of US$ 110 thousand per unit.
6. Setting up of leather parks: An outlay of US$ 24.5 million for setting up five leather
parks two in Chennai and one each in Nellore, Agra and Kolkata. 12 The Council
for Leather Exports has estimated that this scheme would generate a total investment
of US$ 267 million in about three years.
7. Establishment of design centres at individual manufacturing units, to facilitate
improvement in design capabilities: Under this scheme, 25 per cent of the project
cost was provided to the units under the market access initiative scheme of the
Ministry of Commerce and Industry. Several individual units have come forward to
establish their own design centres.

For the leather tanning industry in India, the main focus of the regulations has been on
water pollution rather than problems related to air pollution and solid waste. In Ambur,
water pollution issues came into focus with the Palar Action Plan, established by the
Central and the UP governments in 1985. The GAP required that the water quality should
be monitored and primary treatment of effluents should be undertaken. Under the GAP,
another project, aided by the Dutch development agency, operated from 1987 to 1994
with the mission to prevent pollution of the river Ganges and improve living conditions
of people in Ambur. Among other things, this project included the construction of the
CETP to treat Leather industry effluent. The regulations that the Leather industries have
to meet today are all related to water pollution, and the regulations have remained

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unchanged during the 1990s. There are certain standards for pH, total suspended solids,
sulfides and chrome that the Leather industry effluent shall not exceed. Hence, all
Leather industries are required to treat their effluent before letting it out either to the
sewer system or to a river. Different standards apply according to whether the Leather
industries are connected to a CETP or not. For Leather industries that are connected to a
conveyance system that goes to the CETP, in Ambur, it suffices to have a primary
treatment plant (PTP) where sludge in the effluent can settle and where the pH is
adjusted14. This means that the water they let out of their plant should contain no more
than 600 mg per liter of suspended solids, 45 mg per liter of chrome and the pH should
be in the range of 6.5 to 9.0. The purpose of this cleaning is mostly to avoid clogging of
the conveyance system before the effluent reaches the CETP where most of the treatment
is supposed to take place. The Leather industries that are not connected to a CETP have
to meet the more stringent standards equal to those that apply to the CETPs. For them,
pH should be in range 6.5 to 9.0, COD should be less than 250 mg/l, suspended solids
100 mg/l, sulphide 2 mg/l, and chromium 1 mg/l. To achieve this, they need to have their
own individual effluent treatment plants (IETP) that takes care of both primary and
secondary treatment, it is not enough to only have a primary treatment plant to settle and
take out the sludge.

To enforce these regulations, the state pollution control board (SPCB, in this case the
UPPCB) is the authority. They have the right to go for inspections in all Leather
industries, at any time and without warning, to check that they have a PTP and that it is
being run properly. They may also take water samples from the water that is let out from
the PTP. If the values of the test results exceed the standards, the Leather industry is
given a warning, but no fine, and if they do not comply properly with the regulations, the
SPCB can shut the Leather industry down. The regulations are backed by the Supreme
Court (SC), and if closed down, the Leather industry will have to wait for a long time
before their case can be processed by the court. The SPCB is also supposed to monitor
the operation of the CETP, but since the SPCB is the government, and the CETP is run
by the government, the control function is less than towards the Leather industries which
are private sector.



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4.5 METHODOLOGY
The survey was aimed at gathering information from different sources that play role in
leather manufacturing and are affected by the after effects of the production. In order to
assess the level of technology used in leather production and waste disposal technology,
Leather industries located in Ambur were selected since most of the small scale and large
scale Leather industries are concentrated in this area. Some 380 odd leather units are
located in Ambur area, right on the bank of river Palar. These units, which use many
toxic chemicals, are the single largest contributor to the pollution of the surface as well as
groundwater of Ambur area.

After this in order to determine social impact of leather production on the nearby society
and workers, labor working at the waste disposal site and the villagers of the nearby
village were interviewed. And finally, an officer incharge of WasteWater Treatment Plant
was consulted to assess the effluent treatment technology used in cleaning the effluent
coming from Leather industries.
4.6 COVERAGE
Most of the Leather industries are located in Ambur, an area south-east of the city and
on the southern bank of the river Palar. This location was optimal in the early days,
because the leather tanning activity was kept outside of the city area (so that stench and
waste would not be a problem for the city dwellers). Also, to have access to water was
important because the leather tanning industry has a high consumption of water. Today,
the area of Ambur is crowded, not only with Leather industries, but also with the houses
of the people living there. Ambur is no longer separate from the city, and most of the
people living there are workers in the Leather industries. Many of the Leather industry
owners also live there, even though Ambur is considered a very poor area. The area has
narrow dirt roads with no drainage and no light, and litter and waste from the Leather
industries are everywhere
4.6.1 LEATHER INDUSTRIES
No Leather industry allowed us to enter into their building. Several excuses like the
chief not being available, Leather industry not working (although the chimney was
emitting black smoke) were given.

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4.6.2 WORKERS
Three labourers were working in collecting slush, the watery mud and spreading out
in open to be heated and dried by sun. The dried mud consisted of leather waste and
remains of hides. These hides are boiled to produce adhesives, organic manure and
chicken feed. The fumes emanated from these factories pollute air and discharge foul
smell much to the dislike and annoyance of the residents of the area. But despite these
effects, when the workers were asked about the consequences and their willingness to do
such kind of work they replied that there are no after effects of this work, they do not
sustain any kind of skin or breathing disease, there is no wastage from Leather industries,
everything that Leather industries release are disposed in one or another way, there is no
damage to soil by the effluent rather it contains elements that make land more fertile.
4.6.3 PAN WALA
A Pan Wala, resident of a nearby village was interviewed and gave information
regarding the kind of pollution that Leather industries of the area cause to the
neighborhood. He told that agricultural fields are destroyed because the water which is
used for irrigation is highly toxic. A lot of air pollution is caused by the bhattis (illegal
glue factories) which burn leather. He complained that the open channels that drain into
river Palar contain black water and stink heavily. He talked about problems faced by
villagers and lack of appropriate measures by government to tackle their problems.
4.6.4 VILLAGERS
Residents of village named Thuthiput were interviewed to state their problems with
the pollution caused by Leather industries. They told that people suffer from diarrhoea,
cholera, skin diseases and spontaneous abortions. They showed swollen spots on chest
and damaged nails. They gave instances when cattle kept jerking their neck, lied down
and then died. They also said that sick animals gave lesser milk. They found isolated
from the rest of the world and felt that there polluted surroundings has harmed their
relationships with people from other villages. They told that people are reluctant when it
comes to marrying a person from this village. When asked about the efforts they have
made to raise their voice against this problem, they told that they have send mails to
district magistrate, but no support has come to their rescue. They said that on the letter
addressed to the President of India explaining the situation faced by the people, High
Court ordered for the closure of the bhattis but these became operational again and now
operated in night instead of the day time. This worsened their problems and made it

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extremely difficult to sleep in night. They blamed the politicians who themselves are
owners of Leather industries and said that these people bribe policemen and condemned
system for taking bribes.
4.6.5 WASTEWATER TREATMENT PLANT
A senior officer managing the operation of wastewater treatment plant was
interviewed regarding the kind of technology being used in the plant, quality of effluent
released for irrigation and disposal of waste. He explained us the entire process of
Leather industries and domestic wastewater treatment. He told that main component of
contamination is organic loading which is represented in terms of Biochemical Oxygen
Demand (BOD) and inorganic load as Total Dissolved Solids (TSS). When asked about
the efficiency of the plant, he told that the plant is working undercapacity at an efficiency
of around 65%. This he said is due to lack of funds available for operational and
management costs. He told that the wastewater is highly corrosive and damage iron bolts
and pipes. He even showed us pipes colored green that were made of special kind of fibre
which was resisting corrosion since the time when the plant was established even
showing signs of corrosion. He told that as per the directive of Supreme Court, the
Leather industry people are supposed to share the operation and management costs of the
plant on 50:50 bases. Both have diverted from their commitments. When asked to
comment on the presence of high traces of toxic elements like chromium in the effluent
discharged from the plant, he said that it is the responsibility of Leather industry people
to remove chromium from their effluent. He told that Leather industry people producing
more than 50 leather hides per day, big Leather industry people, are installed with
chrome removing facility but they do not abide by the law and do not care for the
environmental degradation. He told that it is favourable to remove chrome at the source
because it is easier and beneficial from the tanners point of view since he can convert
the hexavalent chrome to trivalent chrome and recover it to save his cost on raw material.
But their ignorance has not only elevated problems for them but also created problems
for the environment. For Leather industry people producing less than 50 leather hides per
day, small or medium Leather industry people, effluent is brought through tankers and
treated





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4.7 ANALYSIS OF PRIMARY AND SECONDARY INFORMATION:

Indias leather industry occupies a prominent role in international trade, generating
foreign exchange and providing employment. The industry employs more than 2.5
million people. Much of the economic benefits derived from leather production and trade,
however, have typically come at considerable cost to the environment and human health.
The case study has presented important findings and analyses, leading to an enhanced
understanding and appreciation of the multiplicity of barriers and opportunities for the
further development of the Indian leather sector. The problems faced by leather industry
in India shows the very nature of the Indian economy. It shows how democratic structure
shatters when every individual defends his failures with others shortcomings. As for the
common man, this ignorance has led to financial, social and health related problems and
they feel desolated on their own land. The following section gives the analysis of role
played by different players:
4.7.1 GOVERNMENT
The leather industry in Ambur used to flow unabated into Palar through
drains. A conveyance system was built under GAP-I in which Intermediate Pumping
Stations (IPS) were used to collect and carry Leather industry effluent to the CETP.
Untreated Leather industry effluent is still discharged into Palar, owing to malfunctioning
of the IPS. Thus, despite four intermediate pumping stations along the Palar intercepting
and diverting the waste to the main pumping station, over 60 per cent of Amburs 360
million litres per day (MLD) sewage and 9 MLD effluents are dumped into the river.
Some Leather industries have even bored holes in their premises, and dump the waste
directly into the citys aquifers.
Also, the waste that reaches the treatment plants from the main pumping station is ill
managed. The plants rarely function due to power failure. Lack of electricity has
rendered dysfunctional the infrastructure set up under GAPs first phase. This has
resulted in discharge of sewage and effluents rich in hexavalent chromium, a known
carcinogen, supplied for irrigation. Such occasional functioning also means the
chromium-rich sludge is dumped carelessly. Lack of proper controls, corruption in
bureaucracy and insufficient fund transfer to CETP reveals the true attitude of
government towards handling the problems.

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4.7.2 CETP
The Common Effluent Treatment Plant (CETP) is not equipped to deal with
chromium. The plant works under capacity due to insufficient money supply from
Leather industry people and government. This result in increase in concentrations of
chemical constituents beyond their standard levels laid down by government. The
chromium released by the Leather industries goes untreated to join river Palar or
agricultural land for irrigation.
4.7.3 INDUSTRIALIST
The most important explanations of firms non-compliance with environmental
regulations are that the enforcement of the regulations is poor and fraudulent, that many
of the Leather industry people believe their activity does no harm to the environment,
that there is no customer or market demand for cleaner production. There is a difference
between cleaning and cleaner technology. The firm using cleaner technology will only
have an advantage in International markets where they would be competing firms from
other countries having stringent environmental norms and would have a first mover
advantage in the sense that the native firm would take time in reaching that level of
technology. But this first mover thing is not valid in India because most of the countries
India export to have already implemented equally or more stringent environmental
norms. So this concept wont apply for a developing nation exporting to developed
nation. Also, there are again bureaucratic obstacles to the paying for the CETPs
operation. Since the politicians are also Leather industry owner, the antipollution drive is
often of no use as there are many ways to circumvent laws if lawmakers themselves are
involved in the process. They dont install chromium recovery plants and argue saying
that they have done their part by contributing 17.5 per cent cost of the CETP.

Since the CETP in Ambur is a joint Leather industry waste and city sewer treatment
facility, many of the Leather industry-owners are critical to the fact that the leather
tanning industry is the only industry that has to pay. They claim that many other
industries are letting their waste into the general city sewer, and therefore should also
pay. Only the Leather industries should not pay because so many other industries are also
discharging their effluent into the same city sewer channel. Also, on top of these attitude
problems, there are misunderstandings on part of the Leather industry people either

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because of lack of information or because policies change with time, and makes it hard to
know what one is supposed to be doing. Also the operational price paid is not dependent
upon how much quantity water one use or discharge. Customer demand and government
pressure are the most important factors leading the firm to implement environmental
practices. Most of the Leather industries have a very short-time perspective for their
business, for some the survival is from year to year, for even smaller Leather industries
the operations is on and off on a monthly basis. With these short time frames, no one is
thinking of spending time and effort to develop a 5 or 10-year strategy on any issue.

4.7.4 COMMON MAN (FARMERS)
Chromium enters in food chain. These irregularities have had a disastrous
economical, social and health impacts.
4.7.4.1 ECONOMICAL: The yield of wheat, paddy and barseem (a local animal feed
plant) has reduced 50 per cent due to the use of contaminated irrigation water. Earlier
floriculture, mainly rose farming, sustained the economy of these villages. But these
roses stink. The size was also very small. The flower yield has dipped by 60 per cent.
Vegetables grown in these villages couldnt be sold in the city even at very low rates.
This decrease in output strips the basic earning of farmers.

4.7.4.2 HEALTH: Glue-making units that use the waste (flesh) and other by-products
of Leather industries on the outskirts of most villages have aggravated the trouble.
Besides, the affected villages do not have primary health centres.

4.8 SUGGESTIONS AND CONCLUSIONS:
However negative these findings may be, there are opportunities to improve this
situation. A comprehensive, well synchronized action by respective governments,
industry, R&D and establishments, environmental authorities, international
organizations, etc. to address the main constraints mentioned earlier is a prerequisite to
achieving sustainable development in the leather tanning industry.

30 | P a g e

4.8.1 GOVERNMENT REGULATIONS
First, there is an immediate need to stop the corruption that is making it possible
for the Leather industry people to get away with not cleaning their effluents as the
regulations abide them to. Second, there should be an increased reciprocity between
the Leather industry people and the CETP in Ambur so that the Leather industry
people would feel more responsible for the effluent let out by them to the CETP. The
focus on corruption is extremely important because it gives the Leather industry people
not only an opportunity to escape from cleaning their effluents as they should, but an
actual encouragement to not do so, because non-compliance with regulations is the
only way of having only one cost (for corruption) rather than two (for corruption and
cleaning). Hence there are not only no incentives to clean, but the corruption is an
actual impediment to clean. No matter how well the Leather industry people do in
cleaning, they still have to pay bribes. The need to end this corruption is therefore
urgent. It is also important to make sure that the PCB officers that are responsible for
the control of the Leather industries have enough skills to do the control properly, and
that they have the knowledge to teach the Leather industry people how to achieve the
standards if they are not meeting the norms at the moment of control.
4.8.2 EFFECTIVE MONITORING
Charge each tanner for the cleaning on the basis of how much effluent the Leather
industry emits. This would be possible by establishing a measuring unit at the end of
each tanners pipe, measuring the amount of effluent it creates before it goes in to the
common conveyance system. This would force the Leather industry people to be more
careful about their water consumption, and reduced water use could reduce the quantity
of chemicals used. An even better option would be to have measuring equipment that
could monitor the quantity of chrome and other chemicals contained in the effluent,
and that each tanner would pay according to these measures. This would further
encourage the Leather industry people to reduce their use of chemicals as well as it
would be another incentive to install recycling options such as chrome recovery plants.
One obstacle is that the installment of these measuring equipments could be expensive.
Instead, one could invent a system of discounts for Leather industries that had for
example chrome recovery plants, so that they would pay some percentages less for
their effluent treatment at the CETP than other Leather industries sending heavier
pollution loads to the CETP. The way in which the CETPs function today (based on

31 | P a g e

quantity of hides or water consumption), they are anti-cleaner technology

4.8.3 INTER LEATHER INDUSTRY MONITORING
A less technical alternative is to improve the environmental performance of the
Ambur Leather industry people by so-called noisy monitoring. This means that the
Leather industries should monitor and report on each other. This is possible because
already today the Leather industry people in Ambur are closely related and well
informed about each others activities. One would have to find a way to ensure
reporting and avoid brotherhood tendencies between the different Leather industry
people. Any reported defaulter should be highly penalised in addition to warning of
permenant closing down in case of any furthur disobeyence.

4.8.4 ECO-LABELLING
For the leather industry, there have already been suggestions to market vegetable
tanned leather as environmental friendly or give the leather an eco-label. This is
problematic both because it is not so certain that the vegetable tanned leather is any
more environmentally sound than the chrome tanned leather and anyway, there is not
a demand for such clean leather among the customers. It is hard to find good
standards that take into consideration both the product itself as well as the production
process, that suit all countries. Even though there are many challenges to the
development of such labeling, the efforts should be continued. Only by market
response would Leather industry people be forced to improve their environmental
performance.
4.8.5 FINANCIAL SUPPORT
Changes in the financial and in the insurance markets could be effective tools to
improve the environmental performance of the leather tanning industry. If better
interest rates on loans were given to Leather industries with a good performance, or
maybe a discount in the insurance premium, Leather industry people would strive to
achieve environmental standards. Special financial schemes can be floated for small
and medium scale enterprises.

32 | P a g e

4.8.6 QUALITATIVE BOOST
Despite the economic importance of the leather industries for the economies of
developing countries there is a discriminating attitude towards them because of the
high pollution level. The younger generation at colleges and technical institutions do
not find the leather tanning industry very attractive and are likely to select other
industrial options. Developing countries should work towards a qualitative up-
grading of the leather tanning industries. New industrial complexes should be
designed, on a modern basis, incorporating all possible equipment safeguards and
intrinsic safety features, to house new Leather industry units and relocate those
currently beset with serious pollution problems.
4.8.7 HUMAN RESOURCE DEVELOPMENT
Most of the developing countries are facing acute shortage of technically
qualified personnel for the operation, monitoring and maintenance of effluent
treatment plants for Leather industry wastes. Appropriate training and education
programmes are needed to cater for the needs of technical personnel at various levels
(operating, supervisory, managerial and design). There is an urgent need to prepare a
working paper which precisely identifies a training curriculum, type of faculty and
infrastructural facilities required for this purpose. The existing expertise and facilities
available in some of the developing countries should be taken into consideration and
if necessary they should be strengthened and made more broadbased to cater for the
regional needs.
4.8.8 DEVELOPMENT OF COMMERCIAL PLANTS
Pollution control technologies have to be techno-economically viable with
attractive financial returns for adoption in the traditional leather sector. The
technology packages should consist of in-plant control, end of the pipe treatment and
waste management components. There is a great need to set up demonstration plants
for common effluent treatment, in-plant process controls and Leather industry waste
utilization in the midst of Leather industries in selected developing countries in order
to enable them to see the performance of the new systems under field conditions. The
demonstration plants should also be utilized for training of technical personnel from
the developing countries. Adequate attention should be paid to the management of

33 | P a g e

the demonstration plants. Sharing of managerial responsibilities by the existing
Leather industries will promote the cause of smooth technology transfer and generate
a multiplier effect.

4.8.9 OTHERS

1. Good Housekeeping - water conservation at all stages of wet processing.
2. Savings in chemicals by introducing reuse-recovery-recycle systems can pay
for the simple equipment needed to run them, such as collection pits, pipes
and pumps.
3. Maximization of returns on Leather industry by-products, residues from
sludge and solid wastes (production of gelatine, protein powders and collagen
for sausage casings and medical and surgical films, glue, animal feed protein
and fertilizers, leatherboard, filter media, non-wovens, etc).
It is believed that by combining strict process control, good housekeeping measures
and cleanliness, introduction of recycling of some floats, predominantly aqueous
finishing together with simple treatment of wastes it would be possible to eliminate
nearly 50 per cent of the total pollution load discharged into the environment with
only marginal investment.











34 | P a g e

4.9 SWOT ANALYSIS OF THE LEATHER INDUSTRY

Strengths
High Growth
Ready availability of highly skilled and
cheap manpower
Large raw material base
Policy initiatives taken by the
Government
Capability to assimilate new
technologies and handle large projects
Continuous emphasis on product
development and design up-gradation
Weaknesses
Lack of warehousing support from the
government
International price fluctuation
Huge labour force resulting in high
labour charges
Lack of strong presence in the global
fashion market
Unawareness of international standards
by many players
Opportunities
Rising potential in the domestic market
Growing fashion consciousness
globally
Use of information technology and
decision support software to help
eliminate the length of the production
cycle for different products
Use of e-commerce in direct marketing
Threats
Major part of the industry is
unorganised
Limited scope for mobilising funds
through private placements and public
issues (many businesses are family-
owned)
Difficulty in obtaining bank loans
resulting in high cost of private
borrowing
Stricter international standards
High competition from East European
countries and other Asian countries
Lack of communication facilities and
skills

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CHAPTER-5
ANALYSIS, INTERPRETATION AND FINDINGS
The Indian leather Industrys Export data.
India Leather Industry Statistics Data
Pairs of leather shoes the Indian leather industry can
produce annually
960 million pairs
Annual revenue generated from the Indian leather
footwear industry
$300,000,000
Pairs of leather shoes produced in India each year 700 million
Indias share of the global leather trade market 3%
Number of people employed by the Indian leather
industry
2.5 million
Footwear share of Indian leather exports 10%
Top Ten Indian Leather Exporters
Share of India Leather
Industry
Tata International Ltd 12.40%
Florind Shoes Ltd 9.50%
Punihani International 7.20%
Farida Shoes Ltd 6.40%
Mirza Tanners Ltd 6.30%
T Abdul Wahid & Company 6%
Hindustan Lever Ltd 5.80%
Super House Leather Ltd 5.70%
RSL Industries Ltd 4.60%
Presidency Kid Leather Ltd 4%

36 | P a g e


General Leather companies business structure

5.1 DATA ANALYSIS OF YORK SHOES PVT LTD:

1. Percentage of companies who follow pollution control norms.

No of Companies Percentage
YES 16 80%
NO 14 20%
Total 20 100%



YES
80%
NO
20%
Percentage of companies who follow
pollution control norms

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2. Percentage wise distribution of companies following eco-friendly environment

No of Companies Percentage
YES 14 70%
NO 6 30%
Total 20 100%






3. Percentage wise distribution of number of Companies contribution of growth of indian
economy.
No of Companies Percentage
YES 13 65%
NO 7 35%
Total 20 100%

YES, 70%
NO, 30%
Percentage wise distribution of companies
following eco-friendly environment

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4. Percentage distribution of source of labour for the leather industry.

Source of labour No of companies Percentage
Local (Ambur) 19 95%
Outside 1 5%
Total 20 100%



YES
65%
NO
35%
Percentage wise distribution of number
of Companies contribution of growth of
indian economy
Ambur
95%
Outside
5%
Percentage distribution of source of
labour for the leather industry

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5. Is the income sufficient to handle the cost of living in ambur?


6. Is the demand for products increasing in the recent past?



7. What is your major source of income?
55%
45%
0%
10%
20%
30%
40%
50%
60%
YES NO
Is the income sufficient to handle the cost
of living at AMBUR?
0%
10%
20%
30%
40%
50%
60%
YES NO
40%
60%
Is the demand for products increasing in the
recent past?

40 | P a g e




8. What is the employment retention rate in your company?



9. Does the government subsidies favour the business?
Export
Local sales
100%
0%
What is your major source of income?
0%
10%
20%
30%
40%
50%
60%
70%
80%
80%
The Employee retention rate in the
company
Employee retention rate

41 | P a g e




10. Do you have the support of local people?



100%
0%
20%
40%
60%
80%
100%
120%
Does the government subsidies favour
the business?
YES
YES
60%
NO
40%
Do you have the support of local people?

42 | P a g e

11. Do you face any problem because of the contaminated ground water?



5.1.1 KEY DRIVERS:

Rapid response to development
Dedicated R&D centre for customer team
Dedicated conveyor with state-of-art machinery
ISO 9001:2008 controlled process
Professional work culture
Robust financial ability

5.1.2 CORE VALUES:

People-Rich combined experience of over 150 years
Professional team and approach to business
Strong R&D support
85%
15%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
YES NO
Do you face any problem with contaminated
ground water?
YES
NO

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5.1.3 LEATHER DEVELOPMENT:

Leather development in association with Alpha spa, Italy
Robust Crust from Argentina
Dedicated leather development & supply resources for quality Sheep, Cow &
Goat.

5.1.4 INFORMATION TECHNOLOGY:

User friendly IT environment
End to end ERP system implementation
CCTV monitored with remote surveillance

5.1.5 COMPANY STRUCTURE:

Product focus is High quality Gents and ladies Shoes.
3,00,000 pairs of shoe uppers and full shoes annually.
Ample scope for expansion with the availability of own land.
Private limited company incorporated in India.
100% FDI(Foreign Direct Investment)
Robust financial ability to support business & growth from internal resources.

5.2 LEATHER INDUSTRY ANALYSIS IN DETAIL


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Structure of Leather industry

5.2.1 FINISHED LEATHER

Global Scenario:

The Global import of Finished Leather declined from US$ 23120.97 million in 2007 to
US$ 22151.29 million in 2011. India accounts for a share of 4.63% in the global finished
leather imports
A Statement showing global import of finished leather viz-a-vis Indias export and share
during 2007 to 2011 is given below:
(Value in Million US$)
2007 2008 2009 2010 2011
WORLD IMPORT 23120.97 21347.76 14907.56 19742.52 22151.29
INDIA'S EXPORT 807.19 673.37 627.95 841.13 1024.69
% SHARE OF INDIA 3.49% 3.15% 4.21% 4.26% 4.63%




45 | P a g e



Major importing countries of Finished Leather:
(Value in Million US$)
Country 2007 2011
China 4344.26 4061.32
Hong Kong 3342.86 3114.25
Italy 3039.53 2936.82
Germany 855.49 971.10
Romania 843.52 729.19
Spain 677.37 709.67
Mexico 591.00 600.42
0
5000
10000
15000
20000
25000
2007 2008 2009 2010 2011
23120.97
21347.76
14907.56
19742.52
22151.29
807.19
673.37 627.95
841.13
1024.69
World import vs India's Export of Finished
Leather
WORLD IMPORT
INDIA'S EXPORT

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USA 791.71 584.12
France 458.95 563.97
Poland 586.47 526.33
Portugal 426.78 511.80
Korea Rep 500.07 464.78
Thailand 368.63 414.77

These 13 countries together accounts for a share of 73.08% in global finished leather
import trade.
Top Exporting countries of Finished Leather
(Value in Million US$)
Country 2007 2011
Italy 5176.50 5043.55
Hong Kong 2772.82 2348.18
Brazil 2192.27 2044.63
USA 1144.04 1024.15
Germany 951.51 928.66
Argentina 963.68 916.89
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Finished leather importing countries
2007
2011

47 | P a g e

Korea Rep 853.93 856.92
Nigeria 330.26 779.48


Indian Scenario:
India has amongst the largest livestock population in the world, providing a strong raw
material base in goat, buffalo, cow and sheep leather. In terms of raw material availability
in pieces, India is endowed with 12.55% of Bovine hides & skins, 12.29% of goat and kid
skins, and 3.48% of Sheep and Lamb skins in the world.
The range of finished leathers include classic finishes (polish, glazed, aniline, patent),
matt surfaces (suedes, nubuck), nappa, burnished & oily leathers, crackled & distressed
finishes etc
Amongst the major producers of finished leather in the world, the Indian Leather Industry
has a long tradition of supplying high quality leather for the global market. Indian tanning
industry produces over 2 billion square feet of leather per annum. The Industry has the
tanning capacity to fulfill 10% of global leather requirements. Major tanning clusters in
the country are Chennai, Ambur, Ranipet, Kolkata, Ambur, Jalandhar etc. There are
approximately 2091 tanneries in the country 45% in Tamil Nadu, 26% in West Bengal,
18% in Uttar Pradesh.
0
1000
2000
3000
4000
5000
6000
Finished leather exporting countries
2007
2011

48 | P a g e




Livestock and Production Details: - INDIA
2005 2006 2007 2008 2009 2010 2011
Number of Bovine animals
(million heads)
279.71 277.51 297.70 304.41 309.90 316.40 320.80
Number of Sheep and Lambs
(million heads)
62.85 63.55 64.27 64.99 65.72 66.59 66.40
Number of Goat and kids
(million heads)
124.90 125.18 125.45 125.73 126.01 127.68 127.39
Production of Bovine hides
and skins (mn pcs)
23.8 23.8 23.4 24.4 25.7 26.6 27.4
Production of sheepskins and
lambskins (million pcs)
31.5 31.9 32.2 32.6 32.5 32.9 33.5
Production of Goatskins and
Kidskins (million pcs)
72.0 72.0 72.2 72.3 72.0 73.0 74.3
Production of Light Leather
from Bovine animals (mn.
Sq.ft)
650.4 647.2 632.4 648.8 699.9 665.9
Production of Light Leather
from Sheep and Goats (million
sq.ft)
610.7 652.5 665.0 655.0 665.1 661.7
Source: FAO Statistics 2011
A Statement showing Indias export of finished leather
(Value in Million US$)
2006-07 2008-09 2009-10 2010-11 2011-12 2012-13
724.00 673.37 627.95 841.13 1024.69 1090.22
Source: DGCI& S

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Indias export of finished leather touched US$ 1090.22 million in 2012-13, holding a
share of 21.82% in Indias total export of US$ 4996.91 mn.
Indias Export of Finished Leather Major markets
The major markets for Indian Finished Leather are Hong Kong 37.84%, Italy 13.50%,
China 9.06%, Korea Rep 3.90%, Indonesia 2.30%, Spain 2.56% and Germany 2.53%.
(Value in Million US$)
Countries 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Germany 34.60 26.77 22.02 24.17 28.91 27.64
USA 9.20 7.64 7.70 8.86 14.01 13.74
UK 2.87 3.42 2.69 3.33 3.75 4.03
Italy 140.44 99.40 75.15 126.14 166.29 147.15
France 10.11 6.28 8.71 9.69 9.74 10.57
Hong Kong 268.84 219.80 236.28 303.20 327.89 412.56
Spain 28.22 23.46 18.75 24.33 34.43 27.91
Netherlands 8.43 8.82 11.56 14.30 18.09 15.35
South Africa 13.27 9.29 8.52 13.46 16.40 13.31
Portugal 12.85 12.34 9.71 8.51 11.11 11.30
China 51.77 45.79 45.97 69.02 98.05 98.82
Indonesia 14.54 12.75 9.68 19.00 24.66 25.13
Korea Rep 28.35 23.49 27.65 29.47 35.55 42.49
Russia 9.77 6.95 3.35 9.29 10.82 6.62
Source: DGCI& S

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Quantity-wise Export of finished Leather:
(In Sq.ft)
2011-12
Goat Leather 209,085,959
Buff Leather 268,321,760
Cow Leather 105,488,212
Sheep Leather 60,461,473
Buff Calf Leather 19,584,894
Cow Calf Leather 13,728,535
Upholstery Leather 53,489,016
Sole Leather 702,852
Others (Leather) 10,284,566
Industrial Leather 15,510
Total 741,162,777
0
50
100
150
200
250
300
350
400
450
Indian finished leather export
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13

51 | P a g e


CLE Membership Records

Region-wise Export of Finished Leather:
(In sq.ft)
2011-12
South 307,736,202
Central 328,610,785
West 25,609,998
East 44,299,793
North 34,905,998
Total 741,162,776
CLE Membership Records
0
100,000,000
200,000,000
300,000,000
400,000,000
500,000,000
600,000,000
700,000,000
800,000,000
Quality wise Export of Finished Leather
2011-12

52 | P a g e



Strong infrastructures are in place for the leather tanning in the country. Eco-sustainable
tanning processes are being followed in the tanning industry. The tanning industry is well
supported by the presence of chemicals and auxiliaries industry. In the MODEUROP
Congress, colours presented by the India are selected continuously, which reinforces the
quality of Indias leather processing techniques. Indian finished leather finds the pride of
place in the global fashion markets

5.2.2 FOOTWEAR INDUSTRY :
The footwear sector is a very significant segment of the leather industry in India; rather it
is the engine of growth for the entire Indian leather industry.
India is the second largest global producer of footwear after China, accounting for 13% of
global footwear production of 16 billion pairs. India produces 2065 million pairs of
different categories of footwear (leather footwear - 909 million pairs, leather shoe uppers
- 100 million pairs and non-leather footwear - 1056 million pairs). India exports about
115 million pairs. Thus, nearly 95% of its production goes to meet its own domestic
demand.

307,736,202
328,610,785
25,609,998
44,299,793
34,905,998
741,162,776
Region wise Export of Finished Leather
South
Central
West
East
North
Total

53 | P a g e

The major production centers in India are Chennai, Ranipet, Ambur in Tamil Nadu,
Mumbai in Maharastra, Ambur in U.P., Jalandhar in Punjab, Agra, Delhi, Karnal,
Ludhiana, Sonepat, Faridabad, Pune, Kolkata, Calicut and Ernakulam. About 1.10 million
are engaged in the footwear manufacturing industry.

Footwear exported from India are Dress Shoes, Casuals, Moccasins, Sport Shoes,
Horrachies, Sandals, Ballerinas, Boots, Sandals and Chappals made of rubber, plastic,
P.V.C. and other materials.
Brands sourced from India:
Footwear:
Acme,
Ann Taylor,
Pavers,
Bally,
Charter Club,
Clarks,
Coach,
Colehann,
Daniel Hector,
Deichmann,
DKNY,
Double H,
Ecco,
Elefanten,
Etienneaigner,
Florsheim,
Gabor,
Geoffrey Beene,
Guess,
Harrods,
Hasley,
Hush Puppies,
Kenneth Cole,
Liz Claiborne,

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Marks & Spencer,
Nautica,
Next,
Nike,
Cole Haan,
Nunn Bush,
Pierre Cardin,
Reebok,
Rockport,
Salamander,
Stacy Adams,
Tommy Hilfiger,
Tony Lama,
Versace,
Yves St. Laurent,
Zara,
Johnston & Murphy,
Docksteps,
Timberland,
Armani,
Geox,
Diesel,
Ted Baker,
Lacoste,
Kickers,
Calvin Klein,
Sioux,
Brasher,
Zegna,
Massimu Dutti,
Buggatti,
Lloyd,
Christian Dier,
Salamander,
Camper,

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Bata,
Espirit,
French Connection,
Legero,
Mercedez,
H & M and many more famous brands
Besides, major brands are sourced from India, MNC brands are sold in India and Indian
brands sold in India.
MNC brands sold in India Indian Brands sold in india
Aldo, Red Tape,
Bally, Bata,
Clarks, Liberty,
Ecco, Khadims,
Florshiem, Lakhani,
Ferragammo, Metro,
Hush Puppies, Action
Lee cooper,

Lloyd,
Marks & Spencer,

Nike,
Nine West,

New Balance,

Reebok,
Rockport,

Stacy Adams,

Tods, Geox ,

Louis Vuitton


56 | P a g e

US Retail giant Wal-Mart has also begun sourcing footwear from India since the last two
years.
The Footwear sector is now de-licensed and de-reserved, paving the way for expansion of
capacities on modern lines with state-of-the-art machinery. To further assist this process,
the Government has permitted 100% Foreign Direct Investment through the automatic
route for the footwear sector.
Conducive Investment climate towards attracting overseas investments and increasing
cost competitiveness.
The Government of India is setting up dedicated Footwear Complex and Footwear
Components Part where footwear clusters are located.
There has been active interest in collaborating with Indian Footwear companies from
European countries like Italy, Spain and Portugal.
Footwear Imports Global Trend:
Major Importing Countries of Footwear (Leather and Non-Leather)
(Value in Million US$)

2007 2011
Country
USA 20039.1 23245.1
Germany 5966.99 8527.62
France 5473.04 6538.01
UK 5281.55 5886.75
Italy 4529.77 5661.77
Japan 3750.04 5062.13
Hong Kong 4881.67 4850.3
Russia 2067.82 3935.95
Netherlands 2297.95 3716.65
Spain 2388.74 3114.08
Belgium 2543.04 2427.09
Canada 1677.05 2089.43
Source: ITC, Geneva

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Major Exporting Countries of Footwear (Leather and Non-Leather)
(Value in Mn $)
Source: ITC, Geneva

2007 2011
Country
China 24181.7 39374.2
Italy 9712.94 10376.2
Hong Kong 5639.64 5317.32
Germany 2999.19 4659.42
Belgium 3375.63 4155.85
Indonesia 1567.05 3227.01
Netherlands 1811.96 3225.1
Spain 2440.47 2823.39
France 1840.51 2420.04
Portugal 1695.88 2088.41
UK 1055.99 1469.57
Romania 1394.32 1393.71

0
5000
10000
15000
20000
25000
Major Importing countries of Footwear
2007
2011

58 | P a g e



Footwear Global Scenario and Indias share
The global import of Footwear (both leather footwear as well as non-leather footwear)
has increased from US$ 81.47 billion in 2007 to US$ 103.38 billion in 2011, growing at a
CAGR of 6.13%. During 2011, the Indias share in the global import is 1.92%.
(In Million US$)
2007 2008 2009 2010 2011
Global import of Footwear 81477.88 88822.80 78453.08 91614.94 103385.24
India's export of Footwear
& Uppers
1489.35 1534.32 1507.59 1758.67 2079.14
% Share of India 1.82% 1.72% 1.92% 1.91% 2.01%
Source: ITC, Geneva & DGCI &S, Kolkata
For comparison purpose, Global Footwear import includes leather & non-leather
footwear. Indias Footwear includes Leather, non-leather and leather uppers
Footwear is the engine of growth of the leather industry in India. Indias export of
Footwear touched US$ 2055.93 million in 2012-13, accounting for a share of 41.14% in
Indias total export from the leather sector of US$ 4996.91 mn.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Major exporting countries of Footwear
2011
2007

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Indias Footwear export (leather, uppers & non-leather) is growing at a CAGR of 7.59%
in the last five years ending 2012-13
Indias export of leather footwear had increased from US$ 1174.03 million in 2007-08
to US$ 1684.22 million in 2012-13.
Indias export of footwear components had declined from US$ 269.30 million in 2007-
08 to US$ 245.04 million in 2012-13
Indias export of non-leather footwear has increased from US$ 46.02 million in 2007-
08 to US$ 126.67 million in 2012-13

Indias Footwear Export Growth over the last Four Decades
Export of footwear from India increased manifold over the last four decades. During
2012-13, Indias footwear export is valued at US$ 2055.93, constituting 41.14% share in
total export of leather & leather products.

Footwear exports has increased from US$ 102.37 million in 1982-83 to US$ 2055.93
million in 2012-13

Major Markets:
The major markets for Indian Footwear are UK with a share of 19.06%, Germany
13.36%, USA 11.06%, Italy 7.96%, France 7.61%, Spain 4.93%, Netherlands 4.47%,
UAE 3.67% and Denmark 1.60%. Nearly 82% of Indias export of footwear goes to

60 | P a g e

European Countries and the USA with exports touching US$ 1456 mn to EU and US$
227.37 mn to the USA. Future growth of Indian footwear in India will continue to be
market driven. The European countries and the US are major consumers for the Indian
footwear.

A Statement showing Indias Export of Footwear (leather, non-leather and leather
shoe uppers) to different countries:
(Value in Million $)
Country 2005-
06
2006-
07
2007-08 2008-
09
2009-
10
2010-
11
2011-
12
2012-
13
% Share
Germany 170.97 217.23 246.84 229.65 224.3 286.7 353.71 274.63 13.36%
UK 195.78 208.2 241.37 247.06 296.45 339.65 360.52 391.95 19.06%
Italy 134.35 186.11 229.81 221.09 210 219.72 219.61 163.66 7.96%
USA 131.07 127.15 136.92 163.03 123.6 143.02 183.02 227.37 11.06%
France 74.48 99.81 116.03 119.2 144.56 154.95 159.49 156.53 7.61%
Spain 63.7 64.57 76.69 91.86 95.94 112.05 113.85 101.40 4.93%
Netherlands 32.96 48.57 72.91 76.2 65.13 6.19 101.72 91.82 4.47%
Portugal 22.15 35.03 37.34 28.21 22.63 25.69 28.76 21.40 1.04%
UAE 25.78 34.64 39.23 39.4 39.45 41.82 62.14 75.46 3.67%
Denmark 18.37 14.65 17.48 14.78 17.01 16.55 24.30 32.88 1.60%
Australia 11.58 10.11 12.52 13.34 15.5 12.82 15.59 22.41 1.09%
Sweden 6.77 7.99 12.04 12.64 12.2 12.07 14.08 11.98 0.58%
Canada 11.95 10.91 10.41 8.96 9.3 10.56 15.00 14.86 0.72%
SouthAfrica 8.26 12.11 8.52 8.49 9.87 11.33 14.75 13.49 0.66%
Japan 3.17 3.07 4.63 8.23 5.45 7.51 14.63 18.85 0.92%
Others 133.9 156.76 226.61 252.18 216.2 358.04 397.97 437.24 21.27%
Total 1045.24 1236.91 1489.35 1534.32 1507.59 1758.67 2079.14 2055.93 100.00%
Source: DGCI& S

61 | P a g e



Future Trends: - Keeping in view its past performance, current trends in global trade,
the industrys inherent strengths and growth prospects, the footwear industry aims to
augment production, thereby enhancing its exports from the current level of US$ 2.07
billion.
Indian footwear industry poised for growth
India has state-of-the-art manufacturing plants. The footwear sector has matured from the
level of the manual footwear manufacturing method to the automated footwear
manufacturing systems. Footwear production units are installed with world class
machines. Manned by skilled technicians, these machines help to turn any new
innovative idea into reality. Support systems created for the sector have indeed served the
footwear industry well. India has a well developed footwear component manufacturing
industry. The future growth of the footwear industry in India will continue to be market-
driven, and oriented towards EU and US markets. With technology and quality of the
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
India's Footwear Export
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
2005-06

62 | P a g e

footwear improving year after year, Indian Footwear industry is stamping its class and
expertise in the global footwear trade.
5.2.3 LEATHER GARMENTS

Global Scenario:
The global imports of leather garments had marginally declined from US$ 3986.73 mn in
2007 to US$ 3910.97 mn in 2011. A Statement showing global import of leather garments
viz-a-vis Indias export and share during 2007 to 2011 is given below:

(Value in Million US$)
2007 2008 2009 2010 2011
WORLD IMPORT 3986.73 4144.04 3376.02 3601.72 3910.97
INDIA'S EXPORT 345.34 426.17 428.62 425.04 572.45
% SHARE OF INDIA 8.66% 10.28% 12.69% 11.80% 14.64%


3986.73
4144.04
3376.02
3601.72
3910.97
345.34
426.17 428.62 425.04
572.45
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2007 2008 2009 2010 2011
World import vs India's Export in Leather
Garments
WORLD IMPORT
INDIA'S EXPORT

63 | P a g e

Major importing countries of Leather Garments:
Country 2007 2008 2009 2010 2011
Germany 469.61 523.19 449.97 471.1 561.21
USA 853.04 641.87 437.24 483.63 485.17
France 285.68 361.49 326.33 349.01 368.62
Italy 271.84 293.31 230.62 242.23 278.73
UK 226.95 224.2 184.6 179.54 195.92
Spain 225.25 238.11 205.87 178.9 191.36
Hong Kong 143.27 140.55 113.61 140.54 185.25
Netherlands 143.32 159.09 132.57 143.91 161.62
Japan 185.27 177.75 166.32 180.15 138.75
Russia 58 76.15 63.4 118.41 129.09
Switzerland 124.69 141.79 118.58 110.55 127.87
China 31.04 46.31 42.39 66.93 127.53
Austria 87.69 91.25 84.8 92.55 115.86

Source: ITC, Geneva


These 13 countries together accounts for a share of 78.41% in global leather
garments import

0
500
1000
1500
2000
2500
3000
Major Leather garments importing countries
2011
2010
2009
2008
2007

64 | P a g e

Major Exporting countries of Leather Garments
(Value in Mn$)
Country 2007 2008 2009 2010 2011
Italy 598.63 637.79 466.96 565.64 725.09
China 1307.77 1008.22 792.75 870.65 689.74
Pakistan 451.27 475.27 350.78 367.95 373.72
Germany 271.29 309.11 259.75 248.76 300.51
France 156.62 179.62 162.54 171.52 204.06
Hong Kong 185.14 175.85 151.87 156.90 186.34
Turkey 232.39 256.11 192.95 181.70 181.26
USA 226.90 216.36 170.38 153.77 154.77
Spain 88.25 114.20 122.94 95.49 118.01
Netherlands 73.03 85.94 78.04 81.97 110.92
Source: ITC, Geneva


0
200
400
600
800
1000
1200
1400
Major exporting countries of Leather
garments
2007
2008
2009
2010
2011

65 | P a g e

Indian Scenario:
Leather garments form a significant segment of the Leather Industry in India. Leather
garments production capacity is estimated to be 16 million pieces annually. India
produces different types of leather garments i.e., jackets, long coats, waist coats/shirts,
pant/shorts, motorbike jackets, industrial leather garments, leather aprons etc.
India is the second largest producer of leather garments, next only to China, which
produces 70 million pieces of the total global trade volume of about 120 million pieces.
It is a matter of great pride that Indian leather garments have been making giant strides in
the world of fashion. National Institute of Fashion Technology and National Institute of
Design lends design support to make continuous fashion statements. These Institutes
provides well trained personnel and imaginative designers. Indias acknowledged strength
is leather tanning and its ability to produce a wide variety of fashion leathers.
Indias Export of Leather Garments
(Value in Million US$)
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
345.34 426.17 428.62 425.04 572.45 563.48
Source: DGCI& S

345.34
426.17
428.62
425.04
572.45
563.48
India's Export of Leather Garments
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13

66 | P a g e

Indias export of Leather Garments increased from US$ 345.34 mn in 2007-08 to US$
563.48 million in 2012-13, growing at a CAGR of 10.28%
Indias export of leather garments accounts for a share of 11.28% in Indias total
leather trade of US$ 4996.91 million in 2012-13.
Indias position as the third largest global supplier of leather garments is only going to
strengthen given the availability of quality raw material coupled with skilled
craftsmanship.
Major brands like ARMANI, ZEGNA, ABERCROMBIE & FITCH, MARCO POLO,
MANGO, COLEHAAN, ANDREW MAARC, GUESS source Leather Garments from
India
Indias Export of Leather Garments Major markets

The major markets for Indian Leather Garments are Germany with a share of 23.18%,
France 13.55%, Spain 11.88%, Italy 10.99%, USA 7.49%, UK 6.16%, Netherlands
3.80%, Denmark 3.47% and Canada 2.31%.
(Value in Million US$)
Countries 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Germany 69.4 100.26 109.18 110.72 153.96 130.63
USA 27.76 22.2 17.04 21.96 31.92 42.19
UK 23.23 27.92 25.07 21.84 30.43 34.69
Italy 58.64 70.13 64.96 59.59 71.41 61.92
France 27.1 42.28 55.53 60.94 69.38 76.34
Spain 47.69 48.47 51.08 46.4 66.32 66.94
Netherlands 11.25 15.72 16.87 17.39 23.02 21.41
Australia 1.91 3.6 5.64 4.84 6.61 5.7
Denmark 12.35 23.86 19.74 19.09 18.82 19.55
Canada 8.94 7.86 8.64 6.96 10.51 13.02
Switzerland 2.41 3.92 4.08 3.33 5.1 4.57
Sweden 8.62 7.96 6.46 6.76 6.79 8.05
Austria 2.55 4.3 4.63 4.06 4.82 4.48
Belgium 5.13 7.45 8.46 8.52 9.42 7.96
Portugal 3.93 4.19 3.64 2.67 2.51 2.37
UAE 5.33 4.13 4.33 4.08 3.9 2.82
China 0.09 0.05 0.26 2.67 12.47 8.29
(Source: DGCI& S)

67 | P a g e


REGION-WISE EXPORT OF LEATHER GARMENTS
(Value in Million US$)
Details 2007-08 2008-09 2009-10 2010-11 2011-12
Indias Export 345.34 426.17 428.62 425.04 572.54
Export from
Southern Region
121.55 133.72 132.90 156.50 174.72
% Share of
Southern Region
35.19% 31.37% 31.00% 36.82% 30.51%

Source: DGCI& S




0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
G
e
r
m
a
n
y
U
S
A
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t
a
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India's Leather garments Export to Major
countries
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08

68 | P a g e

Quantity-wise Export of Leather Garments:
(In Pcs)
2011-12
Children Garments 87,281
Leather Jackets (Gents) 32,24,005
Leather Long Coats (Gents) 32,519
Leather Pant/Shorts (Gents) 4,86,283
Leather Waist Coats/Shirts (Gents) 70,772
Leather Jackets (Ladies) 27,93,094
Leather Long Coats (Ladies) 67,209
Leather Pant/Shorts (Ladies) 3,92,296
Leather Waist Coats/Shirts
(Ladies)
1,15,769
Other (Leather Garments) 18,12,247
Leather aprons 4,09,006
Industrial Leather Garments 3,49,336
Motorbike Jackets 3,218
Total 98,43,035


69 | P a g e


Region-wise Export of Leather Garments:
(In pcs)
Region 2011-12
(Qty In
Pcs)
Value in
Mn Rs.
% share
value-wise
South 1,965,914 8372.60 31.09%
Central 1,397,049 323.90 1.20%
West 125,585 495.20 1.84%
East 1,595,893 584.50 2.17%
North 4,758,594 17151.00 63.69%
Total 9,843,035 26927.10 100%
CLE Membership Records
87,281
3,224,005
32,519
486,283
70,772
2,793,094
67,209
392,296
115,769
1,812,247
409,006
349,336
3,218
9,843,035
Quality wise Export of Leather garments
Children Garments
Leather Jackets (Gents)
Leather Long Coats (Gents)
Leather Pant/Shorts (Gents)
Leather Waist Coats/Shirts
(Gents)
Leather Jackets (Ladies)
Leather Long Coats (Ladies)
Leather Pant/Shorts (Ladies)
Leather Waist Coats/Shirts
(Ladies)
Other (Leather Garments)
Leather aprons
Industrial Leather Garments
Motorbike Jackets
Total

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5.2.4 LEATHER GOODS & ACCESSORIES & GLOVES:
Global Scenario:
The global imports of leather goods & accs had increased from US$ 16388.49 mn in 2007
to US$ 22216.93 mn in 2011, growing at a cumulative annual growth rate of 7.90%. A
Statement showing global import of leather goods & accs viz-a-vis Indias export and
share during 2007 to 2011 is given below:
(Value in Million US$)

Leather Goods & Accs 2007 2008 2009 2010 2011
WORLD IMPORT 16388.49 18117.82 14376.65 17059.43 22216.93
INDIA'S EXPORT 800.46 873.44 757.02 855.78 1089.71
% SHARE OF INDIA 4.88% 4.82% 5.26% 5.01% 4.90%





0
5000
10000
15000
20000
25000
2007 2008 2009 2010 2011
Leather goods and accessories
INDIA'S EXPORT
WORLD IMPORT

71 | P a g e

Major Importing Countries of Leather Goods & Accs:
(Value in Million US$)
Country 2007 2011
USA 3442.41 3862.78
Hong Kong 1748.82 2934.81
Japan 1764.83 2016.83
France 1105.43 1558.11
Germany 855.10 1223.17
Italy 893.25 1112.29
UK 949.24 1055.44
China 234.65 863.67
Korea Rep 302.43 757.56
Singapore 276.47 604.38
Macao 44.71 473.66
Spain 377.22 437.38
Switzerland 379.03 417.09

0
500
1000
1500
2000
2500
3000
3500
4000
Major importing countries of Leather goods
& accessories
2007
2011

72 | P a g e

These 13 countries together accounts for a share of 77.95% in global leather goods
& accs. import.
Top Exporting countries of Leather Goods & Accs
(Value in Mn$)
Country 2007 2011
China 3407.65 4693.80
Italy 3358.86 4331.55
France 2585.48 3405.22
Hong Kong 2033.47 3348.99
Germany 500.41 701.76
USA 348.70 408.82
Singapore 121.89 401.23
UK 257.05 335.39
Netherlands 152.88 326.22
Switzerland 290.59 321.73


73 | P a g e



Leather Gloves:
The global imports of Leather Gloves had increased from US$ 2090.04 mn in 2007 to
US$ 2290.18 mn in 2011, growing at a CAGR of 2.31%. A Statement showing global
import of Leather Gloves viz-a-vis Indias export and share during 2007 to 2011 is given
below

(Value in Million US$)
2007 2008 2009 2010 2011
WORLD IMPORT 2090.04 2434.23 1763.74 1960.58 2290.18
INDIA'S EXPORT 183.26 232.05 121.22 165.63 238.62
% SHARE OF INDIA 8.76% 9.53% 6.87% 8.44% 10.41%


0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Top exporting countries of Leather goods &
accessories
2011
2007

74 | P a g e

Major importing Countries of Leather Gloves:
Country 2007 2011
USA 610.62 604.88
Germany 154.01 205.94
Japan 141.05 149.59
Canada 93.38 122.81
France 98.68 121.9
Hong Kong 165.66 110.92
UK 84.89 90.35
Italy 82.95 79.21
Sweden 52.6 75.48
Netherlands 40.2 59.23
Australia 41.11 52.09
Korea Rep 27.61 51.56
Belgium 46.74 45.3

These 13 countries together accounts for a share of 77.25% in global leather gloves
import.

Major Exporting Countries of Leather Gloves:
Country 2007 2011
China 840.74 1117.26
Pakistan 208.41 271.21
Hong Kong 237.23 164.96
Indonesia 79.16 101.46
Italy 69.24 70.75
Germany 42.49 67.82
Thailand 48.03 52.63
Netherlands 26.5 48.38
France 39.08 40.17

75 | P a g e

Indian Scenario
Leather Goods form an important segment of the leather industry in India. Leather goods
production capacity is estimated to be 63 million pieces annually.
The different types of Leather Goods and accessories are manufactured in India i.e.,
Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels, traveling
bags / luggage, Portfolio and similar such items, Hand Bags, shopping bags and similar
such items, Wallets, Purses, Pouches, Passport Holders, Credit Card Holders, Diary
covers and similar such items, Leather Belts, Caps etc. India also produces Leather
Upholstery Sofa Seat Covers, Car Seat Covers etc.
Most of the units manufacturing leather goods are located in Kolkata, Chennai, Mumbai,
Ambur, Bangalore and Puducherry. Industry is situated in few other clusters also.

India is the fifth largest exporter of leather goods and accessories (inclusive of Gloves)
in the world.
Leather Goods and accessories manufactured in India bear brand names like Coach,
Pierre Cardin, Yves St Laurent, Etienne Aigner, Geoffery Beene, Harrods, Marks &
Spencer, Liz Caliborne, Guess, Next, Tommy Hilfiger, Kieffer, Waldhausen, Biemen,
Nederinum, Zaldi, Kallquists, Shires, GFS, Millers, Eisers, Weco, Ukal and Decalthon.
Leather Gloves:
Leather gloves of all categories like fancy/fashion gloves, sports gloves, industrial gloves
and other leather gloves is a thrust product among the items of small leather goods being
manufactured and exported from India. India is the fourth largest exporter of Leather
Gloves to the world. India produces about 52 million pairs of industrial gloves
annually. India offers the world the largest technically trained manpower in leather craft
at the most competitive costs. Its association with respected product testing institutions
such as SATRA in the UK and PFI in Germany ensures the finest quality leather in the
manufacturing of gloves.




76 | P a g e

Indias Export of Leather Goods & Accessories including Gloves
(Value in Million US$)
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
800.46 873.44 757.02 855.78 1089.71 1178.96
Source: DGCI& S

Indias export of Leather Goods & Accessories including Gloves touched US$
1178.96 million in 2012-13, holding a share of 23.59% in Indias total export of US$
4996.91 mn

Indias Export of Leather Gloves:

(Value in Million US$)
2007-08 2008-09 2009-10 2010-11 2011-12
183.26 232.05 121.22 165.63 238.62

Source: DGCI& S

183.26
232.05
121.22
165.63
238.62
India's Export of Leather Gloves
2007-08
2008-09
2009-10
2010-11
2011-12

77 | P a g e

Major Markets
The major markets for Indian Leather Goods & Accessories are USA with a share of
19.12%, Germany 14.84%, UK 13.10%, France 5.69%, Italy 5.32%, Spain 5.77%,
Netherlands 4.57%, UAE 3.65%, Australia 3.08%, Denmark 2.85%,
Indias Export of Leather Goods & Accessories Country-wise
(Value in Million US$)
Countries 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
Germany 122.65 132.08 117.75 135.34 172.24 174.9
USA 123.86 155.02 137.97 162.9 196.83 225.47
UK 133.92 125.77 123.08 131.74 137.14 154.39
Italy 56.96 67.51 44.82 46.57 67.02 62.67
France 36.07 45.04 38.9 48.16 59.09 67.05
Hong Kong 3.37 4.22 5.77 8.71 11.49 9.77
Spain 59.93 52.33 51.47 62.82 79.12 67.98
Russia 1.02 1.01 0.57 0.97 2.45 2.74
Netherlands 36.51 41.91 38.12 40.86 49.39 53.9
Australia 28.48 32.72 26 26.27 34.17 36.3
New Zealand 2.25 2.02 1.56 2.35 3.34 3.32
Denmark 15.2 17.02 16.16 18.91 27.82 33.65
Belgium 13.94 14.88 12.34 14.83 18.94 17.51
UAE 26.16 34.97 21.63 21.76 35.1 43.05
Source: DGCI& S

78 | P a g e



Quantity-wise Export of Leather Goods:
(In Pcs)
2011-12
Ladies Handbags and other bags 1,43,82,032
Wallets 5,37,99,908
Leather Belts, Caps & Ties 99,10,639
Purses 69,04,629
Pouches 26,37,311
Passport holders / Credit card holders
etc
38,71,699
Travel / Luggage ware 6,39,908
Handcrafted leather items 23,42,290
Sofa / Chair/ Car seat covers
(upholstery)
1,07,678
Diary Covers / Cheque Book Covers 12,66,241
Pet Accessories 7,60,102
Portfolio / Briefcases 2,04,901
Desktop materials 4,34,451
Covers for Camera, Calculator etc 2,91,274
Leather Toys 78,754
Other Leather Goods 4,09,99,396
Total 13,86,31,213
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
India's export of Leather goods and
accessories
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08

79 | P a g e

CLE Membership Records




5%
19%
4%
2%
1%
1%
0%
1%
0%
0%
0%
0%
0%
0%
0%
15%
50%
Quantity wise export of Leather Goods
Ladies Handbags and other bags
Wallets
Leather Belts, Caps & Ties
Purses
Pouches
Passport holders / Credit card
holders etc
Travel / Luggage ware
Handcrafted leather items
Sofa / Chair/ Car seat covers
(upholstery)
Diary Covers / Cheque Book
Covers
Pet Accessories
Portfolio / Briefcases
Desktop materials
Covers for Camera, Calculator
etc
Leather Toys
Other Leather Goods
Total

80 | P a g e

Quantity-wise Export of Leather Gloves:
(In Pcs)
2011-12
Industrial Gloves 108,706,249
Fancy / Fashion Gloves 1,704,898
Sports Gloves 150,139
Other Leather Gloves 839,703
Total 111,400,989
CLE Membership Records
Region-wise Export of Leather Goods:
(In pcs)
2011-12
Central 17,866,725
East 60,591,235
North 31,189,464
South 25,713,413
West 3,270,376
Total 138,631,213
CLE Membership Records
Region-wise Export of Leather Gloves:
(In prs)
REGION 2011-12
East 10,81,35,469
North 1,06,421
South 31,51,599
West 7,500
Total 11,14,00,989

CLE Membership Records

81 | P a g e

With the availability of quality raw materials coupled with skilled craftsmanship, India is
now poised to make itself a major destination for global sourcing of leather goods and
accessories. State-of-the-art production units and in-house Design Studios will strengthen
the industry in producing products with exquisite design and quality.
The industrys accelerated development and growth is being aided by the ambitious
capacity expansion & modernization plans of private industry and the Indian
Governments encouraging policy measures.

5.2.5 SADDLERY & HARNESS
Global Scenario:
The global imports of saddlery & harness had increased from US$ 1100.50 mn in 2007 to
US$ 1224.85 mn in 2011, growing at a CAGR of 2.71%. A Statement showing global
import of saddlery & harness viz-a-vis Indias export and share during 2007 to 2011 is
given below
(Value in Million US$)
2007 2008 2009 2010 2011
WORLD IMPORT 1100.50 1141.57 990.99 1096.16 1224.85
INDIA'S EXPORT 106.18 92.15 83.39 87.92 107.54
% SHARE OF INDIA 9.65% 8.07% 8.41% 8.02% 8.78%

82 | P a g e


Major importing countries of Saddlery & Harness:
(Value in Million US$)
Country 2007 2011
USA 375.22 380.98
Germany 102.77 131.65
France 75.64 75.51
UK 77.86 75.14
Japan 43.9 58.57
Canada 46.95 55.98
Netherlands 28.94 45.58
Australia 30.39 38.29
Italy 34.85 37.49
Belgium 25.45 33.98
Sweden 38.6 31.69
Spain 24.84 26.39
Switzerland 22.74 26.24
These 13 countries together accounts for a share of 83.07% in global saddlery &
harness import.
1100.5
1141.57
990.99
1096.16
1224.85
106.18
92.15
83.39 87.92
107.54
0
200
400
600
800
1000
1200
1400
2007 2008 2009 2010 2011
World import vs India's export of Saddlery &
Harness
WORLD IMPORT
INDIA'S EXPORT

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Top Exporting countries of Saddlery & Harness
(Value in Mn$)
Country 2007 2011
China 231.63 353.45
Germany 131.05 147.14
USA 51.09 55.47
France 42.55 49.46
Italy 43.51 49.38
UK 49.57 44.1
Taiwan 35.63 41.78
Netherlands 14.16 31.58
Ireland 22.87 29.15
Hong Kong 25.24 28.41

Indian Scenario:

Harness & Saddlery goods are being manufactured in Ambur for more than last 100
years. The Saddlery manufacturing started in the 19th century at the British Indian
Corporation in its Copper Alan branch in Ambur and simultaneously the British
Government started the Ordinance Equipment Factory at Ambur to cater to the needs of
the Army. The craft of making saddlery was imparted to the local artisans by the master
saddlers brought from the UK, whose generations now formed the workforce of the
present industry.

By virtue of Amburs specialization in vegetable tanned buffalo hides, and due to the
presence of trained manpower, this has become the most important centre for
manufacture of saddlery goods in India. In fact, Ambur is the only centre in India which
produces the harness & saddlery goods. Almost all the units operating in Ambur are
100% export-oriented.
Indian Saddlery and Harness industry is now becoming globally competitive and brand
dominated, awash with designs. India is positioned as the third largest exporter of
Saddlery & Harness to the world, accounting for a share of 8.04% in the global saddlery
import of US$ 1093.82 million.

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Indian Saddlery and Harness products are gaining an ever-increasing recognition in the
highly competitive global saddlery & harness leather arena. Estimated production
capacity of the Saddlery & Harness industry in India is 12.50 million pieces per annum.
Technology, work craftsmanship, product quality are the hallmarks of the Indian Saddlery
& Harness industry.
The major production clusters for Saddlery & Harness are Ambur, Delhi etc
The different categories of Saddlery & Harness exported from India are Saddles / Bridles,
Harness and Other Saddlery items
A Statement showing Indias export of Saddlery & Harness
(Value in Million US$)
2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
82.33 106.18 92.15 83.39 87.92 107.54 108.32
Source: DGCI& S


During 2012-13, Indias export of Saddlery & Harness touched US$ 108.32 million,
82.33
106.18
92.15
83.39
87.92
107.54
108.32
0 20 40 60 80 100 120
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
India's Saddlery & Harness Export
India

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accounting for a share of 2.17% in Indias total export from leather sector (US$
4996.91mn).

Major Markets:
The major markets of Indian Saddlery & Harness are Germany with a share of 20.22%,
USA 15.28%, UK 11.55%, France 8.12%, Australia 7.04%, Netherlands 6.39%, Sweden
6.11%, Belgium 4.72%, Canada 3.31%, Denmark 2.82%, Spain 2.27%, Italy 2.71%.

(Value in Million US$)
Countries
2007-
08
2008-
09
2009-
10
2010-
11
2011-
12
2012-
13
Germany 19.87 19.67 18.02 18.45 22.18 21.9
USA 13.47 11.31 10.06 11.38 13.77 16.55
UK 16.25 9.08 9.31 8.64 11.15 12.51
Italy 4.91 3.43 3.62 3.73 4.01 2.93
France 9.22 8.54 7.58 6.31 6.16 8.8
Spain 3.54 3.07 1.88 2.4 2.34 2.46
Netherlands 5.64 6.12 5.42 5.65 6.48 6.92
Australia 5.3 4.48 5.37 5.88 9.12 7.62
Denmark 3.27 3.13 2.51 2.95 3.09 3.06
Canada 2.08 2.45 2.31 2.55 2.97 3.58
Sweden 6.37 5.93 5 5.65 5.98 6.62
Belgium 4.51 4.67 4.15 6.15 9.15 5.12
Finland 1.94 1.91 1.03 1.25 1.63 1.15
New
Zealand
1.5 1.05 1.23 1.12 1.34 1.45

Source: DGCI& S

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Quantity-wise export of Harness & Saddlery
(In pcs)
Category 2011-12
Non-Leather
Harness/saddlers/bridles
10,996,324
Saddlers / Bridles 2,941,884
Harness 4,459,858
Total 18,398,066

Source: CLE Membership Records
0
5
10
15
20
25
Major market of india's Saddlery & Harness
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13

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Region-wise export of Harness & Saddlery
(In pcs)
REGION 2011-12
Central 1,81,81,665
North 2,16,401
Total 1,83,98,066

Source: CLE Membership Records

10,996,324
2,941,884
4,459,858
18,398,066
Quantity wise export of Sadlery & Harness
Non-Leather
Harness/saddlers/bridles
Saddlers / Bridles
Harness
Total

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CHAPTER-6
CONCLUSION & RECOMMENDATIONS
Even though the Indian environmental regulations for the leather tanning industry
are equally stringent as the international regulations, the pollution load coming from the
Leather industries is still heavy, and it is a problem both for the people living nearby,
and for the river and ground water. There is a wide gap between the environmental
regulations for the leather tanning industry and the environmental performance among
the Leather industries in the Ambur area. Though few Leather industries have the
prescribed equipment to do primary treatment but most still fail to operate them properly
or at all. Many of the Leather industry people believe their activity is not harmful to the
environment, or they do not see the environment as something that needs to be protected
or treated properly. Much of the reason for this is the problem of corruption and the
bribery that the PCB officers demand. The poor financial position and the small size of
many Leather industries are also important factors. Even though the cost of doing
primary treatment is very low in India, the organization of the payment for secondary
treatment has led to a lot of confusion, mal-information and mistrust between the
Leather industry people and the state bureaucracy administrating the CETP in Ambur.
Many Leather industry people have failed to contribute their share of the cost. Also the
fact that most of the Leather industries in India are supplying the world market with low
quality products or intermediaries, limits the opportunities to benefit from technological
upgrading towards cleaner technology. Finally, demanding customers are too far away
to be able to influence the environmental performance of the Leather industries. All
these factors contribute to explain the Leather industry people environmental
performance. Finally, it is important to acknowledge that the opportunities for
technological upgrading that could trigger a better use of resources and hence reduce the
production of waste, are few and costly. Implementing costly technology or even
cleaning mechanisms is a problem particularly for the many small Leather industries
(around 80% of the total number) that are in a poor financial position.





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BIBILIOGRAPHY
1. www.leatherbiz.com
2. www.leathernet.com
3. www.dgciskol.nic.in
4. www.leatherindia.org
5. www.amburnet.com
6. www.iupindia.in
7. www.econbiz.de
8. www.statisticbrain.com
9. Jiwitesh Kumar Singh, International Trade And Business (2002) , Deep &
Deep Publications pvt ltd., Chapter 1 and 5.
10. D C Kapoor, Export Management (2003), Vikas Publishing house pvt ltd,.
11. Subas C. Kumar, Indian Leather Industry growth, productivity and export
performance (1997),. APH publishing corporation.













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QUESTIONNAIRE
1. Is It A Friendly Environment?
YES NO
2. Do You Think The Manufacturing Industry Is Still Playing A Major Role In The Growth Of
Indian Economy?
YES NO
3. Does The Company Follow The Pollution Control Norms?
YES NO
4. From Where Your Major Source Of Work Force Comes?
Ambur Outside
5. Is The Income Sufficient To Handle The Cost Of Living In Ambur?
YES NO
6. Is The Demand For Products Increasing In The Recent Past?
YES NO
7. What Is Your Major Source Of Income? (Export/Local)
Export Local
8. What Is The Employee Retention Rate In Your Company?
20 40 60 80 100



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9. Does The Government Subsidies Favour The Business?
YES NO
10. Do You Have The Support Of Local People?
YES NO
11. Do You Face Any Problems Because Of The Contaminated Ground Water?
YES NO