Staying alive in an alien world

Thomas Schneider went to work in China for the first joint venture established after the Tianamen Square disaster in June 1989. There he worked at a finishing plant for a shoe factory and there were nine workers. When he left three years later, there were 280 workers and the company were producing 1.2 million sq ft per month. Schneider then established ISA Tan Tec in 1995 alongside his Taiwanse wife Kris and they became one of the first companies to be set up in China without a Chinese partner. They took the decision to avoid the complications of a joint venture with Chinese partners and take the difficult route of remaining 100% foreign owned. Originally, the company started with only two workers and focused on producing leather for top international shoe manufacturers. In 1996, they entered into a 50:50 joint venture with Irving in the USA. In March 2001, they were joined by the Schweizer leather group and changed their name to Irving Schweizer Asia. The involvement of Schweizer gave them the know-how to produce upholstery leather and they also now produce 800-1,000 hides a day to international technical specifications for the automotive industry. In addition, the company are currently producing 1.5 million sq ft of shoe upper leather per month. Earlier this year, Irving were bought out of the venture leaving ISA Tan Tec as a 100% German company situated in Wanggang village, Xinshi Town, Guangzhou. According to Schneider, they are the only foreign-owned tannery producing automotive leather, from raw to finished, in Asia. There are now 500 employees, with total monthly production at around 3.5 million sq ft. The tannery is not yet working at full capacity and leather production is up on this time last year. 'China is developing and expanding tremendously', explains Schneider. 'The past ten years have already seen huge changes and China is likely to become the market with the most potential in the world. Many original equipment manufacturers (OEMs) have already moved their headquarters/factories to China.' 'In general, business in China keeps on increasing, although the companies which are supported/protected by the government are the exception. But no doubt, the Chinese market will continue growing, perhaps at an even faster rate than before.' External resources The company import 98% of their raw materials and skins from abroad, and they import a similar percentage of their machinery and chemicals, although occasionally the company use the services of some of the chemical giants who have their own production facilities in China. Around 50% of the leather produced at the tannery is for shoe uppers, compared with 45% which is destined for the automotive industry. The remaining 5% is upholstery leather. ISA Tan Tec export around 98% of their finished leathers to their customers who include big names such as Adidas, Nike and Timberland. However, the company are hoping that sales of finished leather to local customers in China will begin soon. 'There are several things we can offer domestic customers that other Chinese tanners cannot. We are highly mechanised and our technology is more advanced because it is either imported or transferred from Germany. We focus on top-quality products and aim to be democratic and open. 'We are always looking to improve the products we offer, and one of our future goals is to produce chrome-free leather at the tannery. We will also set up a cutting and sewing section, and we will increase our focus on providing top-quality leathers to OEMs in the automotive sector. 'Currently, we may not be the leaders in the Chinese leather industry but this is what we are trying to achieve - to become the industrial leader!' Dynasec stretching machine The tannery has had a Dynasec machine installed which has been working successfully for the past two years. This is a stretching machine which employs a membrane and a plate. It was developed by Thomas Albert, Albert Maschinenhandel, who was at school with Thomas Schneider. Albert worked for Dynavac and when the company closed he started his own company and developed the Dynasec. 'Having the Dynasec stretching machine in the tannery has meant that we have a competitive edge above our customers', explains Schneider. 'The machine lends the leather more strength and a greater yield, and we intend to keep the machine in the tannery for as long as possible.' (A full report on the Dynasec machine will appear in a future issue.)