Read between the lines - inside Palestinian tanneries

15 July 2015

To say that issues between Palestine and Israel were contentious would be a huge understatement; nevertheless, Sam Setter looks into the tumultuous world of Palestinian tanneries and how they should proceed.

When you read the newspapers or watch the news channels, all of which focus on what is wrong in the world, they give you the impression that when you get off the plane in Pakistan, you are practically at the mercy of the Taliban, or when you arrive in the Palestinian Territories that Fatah and the Israeli army are running gun battles right when you descend the aircraft steps.

Sure, there are issues - very serious issues that cannot be resolved from one day to the other, as they have been on the table for many decades. Yet, the newspapers and news channels exercise a very limited view. Say, if a major US news network reports that there is a gun battle in Hebron and they report from right there in the town, it is more than likely that you won't see a soldier nor hear a single shot being fired.

Nevertheless, the truth is that Palestinians face enormous problems in a territory that they, and the major part of the international community with them, believe is theirs, whereas the Israeli Government exercises total and exclusive power over what happens. Palestine as a state is therefore a hybrid that is capable, but unable, to rule within its own borders that are, according to them, violated by intruding settlements, which multiply without them being able to stop the tide. On the other hand, the Palestinians cannot build where the Israelis don't want them to build. All essential services depend on Israel, which can flick the switch or close the tap any time it wants.

"Hebron has, at the moment, approximately 230 small, family-owned-and-run shoe factories and 12 tanneries, none of which are having an easy time.

So that is what this Limeblast is all about: Palestine and its leather industry, which is mainly situated in Hebron. Hebron has, at the moment, approximately 230 small, family-owned-and-run shoe factories and 12 tanneries, none of which are having an easy time for one reason or another, on top of the overall challenging situation.

Where to begin

Let us start with the tanneries owned by the Al-Zatari family, which also branched out to shoe factories and sector association. The tanneries are quite small; they run three to four creaking and leaking drums, and are equipped with old but functional machines, but they operate with an awareness of modern chemistry that they try to apply as much as possible.

Some of the tanners are trained in Europe. The quality of the finished leather is reasonably good because of imported chemicals from Europe and Turkey. One immediately understands from the bad smell when approaching the cluster of tanneries that they probably have almost no effluent treatment. Since local environmental regulations demand that chrome is not discharged, these tanneries have a chrome-recovery plant; however, this is useless because Palestine is a territory in conflict and the Israeli authorities prohibit the commercialisation of H2SO4 because sulphuric acid, which is needed for the chrome recovery, can be used for the production of explosives.

One may find similar conditions for other territories; for example, in several parts of Africa. Therefore, the Hebron tanners find themselves between a rock and a hard place. For some reason, until now, nobody has come up with the idea of using vegetable tanning agents for Palestinian leather production, alhough a short while ago a Stahl consultant visited the area and proposed its new chrome-free tanning agent.

Other chrome-free solutions are also being taken into consideration. Effluent is not the only problem faced by the tanneries. Nobody knows exactly how many raw hides and skins are available in the West Bank, but an educated guess would be probably 10,000-15,000 cattle hides a month and 20,000-25,000 pieces each for goat and sheep. In other words, not enough for an economically viable production and certainly not for 12 tanneries, even if they are small. The import of raw hides and skins is prohibited, a huge handicap, whereas before the second Intifada Gaza was the main supplier. Today, there is no trade between Gaza and the West Bank.

Problematic conditions

Due to a lack of availability of raw materials, the local leather production of goat, sheep and bovine leathers is rather limited, and shoe factories have to revert to outside markets for the purchase of their leathers. A few are importing their leather directly from Brazil, Italy or Turkey, whereas most purchase their leather in small lots from Israeli importers/merchants, who themselves import from the aforementioned countries.

Accessories and tools follow the same pattern, because the Israeli traders are prepared to give the Palestinians credit. Furthermore, Israel is the main export market for shoes. Therefore, beyond anybody's expectations, there is an important trade at least in the leather industry between Israel and Palestine, where both sides speak the other side's language.

"The future of the Palestinian shoe factories should not be to compete with China or other Far East mass producers, but to create a new niche in the market for themselves and move towards hand-made luxury shoes.

Travelling is another matter because Palestinians are not easily allowed to travel to Israel, whereas for the Israelis access to Palestine is easy. A Palestinian who needs to travel to Europe must travel to Jordan by road and fly out via Amman.

In the 1990s, the Palestinian shoe factories produced 13 million pairs of shoes and employed 10,000 workers, whereas today production stands at a mere four million pairs and employment at only 2,500 people. Israel imports approximately 84% of Palestinian-made footwear, Egypt 11%, Saudi Arabia and Jordan 2%, and the Gulf states 1%. The Palestinian shoe factories are also in difficulty in the local market because of cheap Chinese imports, which are considered more fashionable, even if the quality is relatively poor.

Local shoe factories are real artisans with excellent technical skills, which have been passed from generation to generation. Considering the great technical skills and the lack of production lines, the Palestinian shoe factories should focus on the luxury market where hand-made shoes are in demand, but in reality the market segment that they serve is the lower end, allowing only for limited margins.

The future of the Palestinian shoe factories should not be to compete with China or other Far East mass producers, but to create a new niche in the market for themselves and move towards hand-made luxury shoes. In order to achieve this, they need a new mindset inspired by innovative fashion or classic designs that do not aim for big production numbers, but instead on relatively small quantities with a high sales price per unit.

In order to achieve this, the Palestinian industry will need to look for partners and collaborations to acquire modern design and production techniques.

Today, the producers defend the lack of consistency by saying that the shoes are all handmade, which is true, but that does not necessarily mean that non-consistency should be accepted. The European market demands that quality certificates like REACH compliance and transparent supply chain sustainability in terms of labour safety and worker's rights guarantee their imported products. The Palestinian industry will need to conform to these demands, especially if it enters the luxury market where brands have very high benchmarks.

Palestinian manufacturers are looking for new opportunities and their first point of focus was GDS in Düsseldorf, which they visited last January. Nothing was achieved, however; Germany is a medium/high-quality market but also requires quantity. In June, an official Palestinian delegation of seven small enterprises visited ExpoRivaSchuh in Garda looking for contacts, partners, designs and buyers. Results were reported to be rather disappointing as the SMEs appeared to have few business skills. Nevertheless, this is an interesting market.

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