Raw hide to fashion20 June 2018
Dibyendu Bikash Datta, associate professor at the department of fashion management studies, and Sanjib Kumar Das, associate professor, department of fashion and lifestyle accessories, at the National Institute of Fashion Technology, Kolkata, India, consider sustainable leather development in West Bengal in a recently published report.
Manufacturing of leather and leather goods has moved from developed countries to developing countries, where lower labour and production costs are comparative benefits. Throughout the years, the Indian leather industry has experienced a radical change from being a mere raw materials exporter to a genuine leather product exporter.
India has made modest moves to establish itself as an important producer of leather and leather goods, but several important technological and ecological issues that have arisen are of concern. These require basic consideration on part of the government and industry if India is to depend on leather production as a major support for its sustainable development. The concerns include the availability of quality raw hides and skins, modernising existing plants, intensification of leather and leather goods research, and development and managing pollution caused by the manufacture and tanning of leather. This article looks at the issues and provides recommendations for how these technological and environmental concerns can be incorporated into an overall policy of sustainable leather production.
The leather industry has a place of prominence in the Indian economy in view of its massive potential for employment, growth and exports. The Indian leather industry consisted of around 42,000 small-scale industry units – accounting for more than three quarters of total manufacturers – employing over 2.5 million workers, of which 30% are women, and 60–65% of the production is in the small/micro sector. This shows that how many lives are dependent on this sector in terms of earnings.
Leather and production of leather products is mainly centred in southern, northern and eastern India, and the biggest leather exporter in the country is the state of Tamil Nadu, which accounts for 43% of the national share.
In the past few years, the industry has recorded an approximate average growth of 6% over the past 12 years with leather, and of 4.6% over the past ten years in leather products. Growth is almost negligible in terms of inflation; among Indian leather exports, products made from goat contributed to 60%; those from cow accoumnted for 20%; buffalo, 15%; and from sheep, 3%; while ‘others’ were responsible for 2%. Bovine hide production has, over several decades, expanded in the developing countries while it contracted in developed countries. Generally, 50% of bovine hides, and approximately 40% of sheep and goatskins are processed into footwear, while the remainder is used for the production of garments, furniture, and travel goods.
The consumption of leather products primarily depends on price, income and consumer preferences, and India is endowed with nearly 13% of the world’s leather production of hides and skins. It also ranks second in terms of footwear and leather garments production in the world, and accounts for just under one tenth of the world’s footwear production.
India’s leather industry has grown drastically, transforming from a mere raw material supplier to a value-added product exporter. There has been increasing emphasis on its planned development, aimed at optimum use of available raw materials for maximising the returns, particularly from exports. Total leather and leather goods exports from India stood at Rs9.46 billion during April–June 2017 as against Rs9.53 billion in the corresponding quarter of last year.
West Bengal is one of the country’s leading states for exports of finished leather goods and accounts for almost 25% of the country’s leather exports. There are 538 manufacturing industries in the state producing leather goods. Throughout the state, the industry generates almost one million jobs. According to the Council for Leather Exports (CLE), the turnover of the leather industry in the state is around $1.9 billion and the quantum of exports of leather and allied products is about $820 million. As much as 15% of India’s total leather export is from Bengal.
The Government of West Bengal has set up a state-of-the-art integrated leather complex on the eastern fringe of Kolkata spreading over 1,100 acres, where a large number of tanneries located earlier within the city precincts have shifted and new investment interest has been generated. The leading players in the sector include Bata India, one of the leading and most popular shoe brands in the country, selling around 60 million shoes and exports around three million footwear each year.
Khadim Group is another prominent player in the footwear industry in West Bengal and has 183 franchised outlets across the country. The eastern region leather sector hopes to make a major contribution to the target of Rs1,000 billion set for 2020, thereby fulfilling national and state priorities and increasing its share as a major foreign exchange-earning sector. Indian leather is one of the most unnoticed sectors and very few researchers have been in this area until now. Because of the heterogeneity existing in this sector and also due to the fact that sustainability has become an unavoidable factor for any industry these days, it becomes essential to analyse the several issues and factors regarding sustainability that can facilitate as well as slow up the attainment of sustainability in the Indian leather industry.
Resent research analyses the sustainability strategies of West Bengal to gain insights into efforts and progress in generating economic, social and environmental values.
The three major external factors to consider are environmental regulations, quality standards and foreign competitions, which are substantially influencing the export prospects. The leather industry has significant economic influence, but it suffers from the negative impact due to environmental pollution caused by tannery wastes produced during processing.
The better the quality of raw hide, chemicals and machinery, the better the quality of the finished leather and only in the higher-quality product segment is there potential to get a better price for ‘environmentally friendly’ leather.
The problem with high-quality products is that they require high expenditures in all parts of the process.
India’s ability to produce and export environmentally friendly leather goods depends on cost and availability of environmentally friendly technology and production methods, availability of resources to adopt the technology and competency of the institutions responsible for monitoring and enforcing environmental standards.
The fact that many of them cannot afford to use the higher-quality chemicals and the newer machines forces many Indian tanneries into the low-quality trap for standardised products where price competition is stiff.
The leather industry has been identified closely with the generation of air, liquid and solid waste pollution. This has created a negative public image, and tanneries are expected to invest in effluent treatment plants as well as in other forms of waste disposal.
In advanced countries, in order to meet the regulations set for pollution control, the industry is forced to invest heavily in pollution abatement.
Socio-economical specificity and environmental impact of various leather processing activities are of considerable interest in supporting the sector towards sustainable development. Based on this observation and having it as an objective, learning sustainable development of the Indian leather industry is critical.
The term ‘sustainable development’ first appeared in an official document signed by 33 African countries in 1969, under the auspices of the International Union for Conservation of Nature (IUCN). In the same year, the Environmental Protection Agency was set up in the US; its guidelines have had a huge impact on developing theories and practice in global environmental policies.
These two aspects are what characterised the ‘Brundtland Report’, which was produced by a commission led by Dr Gro Harlem Brundtland, and published in 1987. This document was also referred to as ‘Our Common Future’, elaborated by several countries for the United Nations in order to warn about the negative environmental consequences of economic development and globalisation, which tried to find possible solutions to the problems caused by industrialisation and population growth.
The report defines sustainable development as meeting “the needs of the present without compromising the ability of future generations to meet their own needs”.
Today, sustainability tries to secure present needs without compromising the future generations. It is an integration of three essential pillars:
- Environmental value forms: at the environmental level, sustainability prevents nature from being used as an inexhaustible source of resources, and ensures its protection and rational use. Aspects such as environmental conservation, investment in renewable energies, saving water, supporting sustainable mobility, and innovation in sustainable construction and architecture, contribute to achieving this environmental sustainability on several fronts.
- Social value forms: at the social level, sustainability can foster the development of people, communities and cultures to help achieve a reasonable and fairly distributed quality of life, healthcare and education across the globe. The fight for gender equality, especially in developing countries, is another aspect that in coming years will form the basis of social sustainability.
- Economic value forms: sustainability focuses on equal economic growth that generates wealth for all, without harming the environment. Investment and an equal distribution of the economic resources will strengthen the other pillars of sustainability for a complete development.
Some of the key challenges faced by the Indian leather industry include poor ranking in the ease of doing business, quality adherence and delivery compliance, lack of innovation and technology focus on footwear components, absence of large-scale investments and environmental issues. The power problems faced by the companies due to the shortage of power supply from state utilities also adds to the challenge.
It is perhaps because of these reasons that India has failed to draw interest from foreign investors in the leather industry. Foreign direct investment (FDI) into the Indian leather sector was just $1.5 billion in 2000–2015. Foreign capital has played a key role in the Vietnamese industry comprising of footwear and leather products such as bags.
The State and Central Government in India need to introduce investor-friendly policies. Foreign capital will not only create job opportunities in the Indian leather sector, it will over time also bring in skills and technical know-how that can benefit the entire domestic industry. Foreign capital can step in as the engine of growth.
The inflow of foreign investment in the Indian leather industry, while aided by liberal FDI policies of the Government of India, also faces competition from small, low-cost countries in South East Asia. The quality of infrastructure available in the country, as well as innovative investment policies will help to differentiate India as a manufacturing location for investors. Some of the key measures required are:
- a special package for international companies to set up units in India, and help in developing new leather clusters
- a single-window clearance for land acquisition and all statutory compliance for all sectors, including leather
- various leather associations in India, along with the CLE and the government, should organise road shows in target markets
- engage actively with US-based organisations such as Footwear Distributors and Retailers of America (FDRA) and large corporations in order to include India as a strategic sourcing partner.
A World Bank’s Enterprise Survey of leather shows India has performed poorly in comparison to Vietnam and Pakistan, both of which have more companies with accreditations such as International Organization for Standardization (ISO).
Most of the companies across the globe, including India have limited knowledge and awareness of the quality standards that are to be followed to be competitive in the international markets. There are many quality standards being enforced by European markets like Regulation on Registration, Evaluation, Authorisation, and Restriction of Chemicals (REACH) for chemicals used in the tanning process, which need to be followed by companies in order to supply to these markets. The manufacturers have to successfully emphasise the environmental soundness of the product in the information to the buyers since major attention is being paid to the increasing role of the environmental regulations.
At the same time, because the tanning industry needs natural resources, chemical products and energy, environmental sustainability becomes a fundamental aspect of leather production. Companies strongly committed to ecological principles should be a norm in the industry in order to ensure longterm economic, environmental and social sustainability. The tanneries’ commitment to environmental sustainability can be confirmed by some important international product certifications assumed on a voluntary basis.
The supply chain consists of breeders, slaughterhouses, tannery and manufacturers. They all have economic, environmental and social challenges providing employment to 300,000 people in the state’s leather industry. When the Supreme Court of India directed the tanneries of Kolkata to be located beyond the city limits so as to reduce pollution in the residential areas, the creation of the Calcutta Leather Complex (CLC)became imperative.
The Government of West Bengal conceived the CLC project in the early 1990s. It was planned as an integrated complex, housing all activities relating to the leather industry in a modern and environment-friendly manner. The CLC is a unique case of relocation of a polluting industry in India. The tanneries in the complex form a major section of activities.
A technical training and service centre recently built is ready for operations as well. The leather complex also has a solid waste and gas generation unit being piloted by the Central Leather Research Institute (CLRI). A new industrial cooperative representing 300 micro leather units has been formed for settlement in the complex as a micro, small and medium enterprises cluster.
The underground water availability for extraction had been assessed at 35 million litres a day. The Indian Leather Products Association (ILPA) has taken the initiative to set up a common sewerage treatment plant for leather goods manufacturing units. All processed and domestic wastewater from the tanneries are treated in a common effluent treatment plant (CETP), which not only helps the industries be in better control of pollution, but also acts as a step towards a cleaner environment.
The complex has four CETPs with a total capacity of 20 million litres a day. The chromium-bearing effluent is separately treated and chromium is recovered for reuse in the process. The government had proposed to create and develop more infrastructure under the mega-leather cluster of Indian Leather Development Programme.
The CLC promises to be the greatest example of synthesis in uniting the compelling needs of development on one hand, and creation of environment-friendly and pollution-free technologies, operation systems conducive to sustainable ecological dynamic balance on the other. Presently, the tanneries at the CLC can process 1,000t of raw hides per day. When it becomes fully functional, it is estimated that the CLC will generate approximately Rs73.18 billion worth of exports and create employment opportunities.
Sustainability is becoming increasingly important in the leather industry. Modern, future-oriented leather production must bring economic interests, ecological soundness, and consumer benefit into line. Achieving this balance and turning it into a valuable asset for the various stakeholders of the leather industry, the government along with the beneficiaries should plan for a sustainable leather management initiative. The initiative will tackle sustainable development systematically along the entire value chain. It will encompass the entire life cycle of the leather, with clearly defined development targets in the areas, including:
- developing new products and chemical systems the components of which are largely based on renewable raw materials and do not use any substances with critical toxicological properties
- improving processes by reducing energy and water requirements, making more efficient use of chemicals and finding new ways of using by-products
- enhancing leather properties in terms of sustainability during and after use: longer service life, low leather consumption and good recycling possibilities.
However, a number of steps have been initiated by the governmental authorities regarding improving the environment in the area and also for protecting of workers against health hazards. Thus, what is required in these areas is the development of sound industrial ecology that will provide a foundation for sustainable industrialisation. A corollary objective of industrial ecology is the repair of past environmental damage and restoration of ecosystems.
A sustainable footprint
To achieve a sustainable footprint in the leather industry, it is essential to take a close look at the role of ecology in the value chain of leather. There are four key elements in the production of leather that should be grouped together to provide a sustainable footprint concept. Carbon footprinting has appeared as a strong and popular indicator of the greenhouse gas intensity of any activity or organisation. It is estimated that alternative solutions in tanning could reduce carbon footprint by as much as 15%. The water footprint will continue to grow in importance in the coming years because the efficient use of water is one of the key challenges of this century. The pressure is on innovation for technology and chemicals in order to provide more water-efficient processes for the production of leather. The resource footprint covers many aspects as it touches on different resources employed in the leather production. The raw stock is the single most important and valuable resource in the production of leather. Every attempt to increase the value added by upgrading low-quality leather, eliminating waste in the cutting of patterns, reducing waste products, or lowering the costs of tanneries results in an immediate benefit. The resource footprint also covers the efficient use of chemicals based on regenerative raw materials and optimised production processes in tanneries, including, for example, lower energy consumption. The toxicological footprint addresses the use of harmful substances in the production of leather, the restricted substance list, the management and handling of harmful substances, legal requirements, the demands of specific industries/brands, as well as product and process safety. The aim of the toxicological footprint is to minimise the levels of harmful substances used in the production of leather and ideally to eliminate them. This includes the zero discharge of hazardous chemicals (ZDHC) campaign and the new volatile organic compounds (VOC) regulations.
Source: National Institute of Fashion Technology