Surveying the business horizon - APLF’s Materials, Manufacturing and Technology (MM&T)

Since the 31st edition of Materials, Manufacturing and Technology (MM&T) ended on 1 April 2015, the demand for leather on all levels and its price slid from around $100 to a July low of just over $60, which equalled a 40% price decline.

Prices were in the stratosphere in mid-September 2014. Leather had succeeded in pricing itself out of the market as well as the manufacturers' demand portfolio with the exception of the booming automotive sector.

The slowdown was indeed reflected at MM&T 2015, but at that point prices had not hit the steepest part of the slippery slope that succeeded in knocking confidence out of the sector. Cheaper synthetics invaded the price-sensitive footwear segment on the back of plunging oil prices, hence enabling these petrochemical, non-biodegradable and environmentally unfriendly leather substitutes to grab market share from leather that has not yet been recovered.

Pointers to this recovery could well be gleaned during the world's leading leather trade fair, APLF-MM&T in Hong Kong at the end of March 2016.

Leather: back in the spotlight

Supply and demand, the economy and even the money move in cycles, and with huge supplies of low-cost splits and lower grade leather populating warehouses worldwide, it is a question of time before footwear manufacturers turn their attention back to leather. Making an extra 5% margin on each pair of shoes manufactured is a powerful motivator for any COO or production manager.

The golden rule in any market - whether the stock or commodity market - is to buy low and sell high. Well, in the case of leather, buyers bought high and have not yet girded themselves with enough courage to buy low (now) when prices are on the floor and packers need to sell if only for cash-flow reasons.

As the industry leads up to the 32nd edition of MM&T in Hong Kong at the end of March, now is the time to survey the business horizon and realise that leather has not lost its appeal to the average consumer, or to the designer whose ideas and vision drive the demand for leather as well as other raw materials.

With prices for all grades except the top ones being much lower than a year ago, it is expected for buyers to come in their droves to MM&T, where the world's major suppliers can be seen, under one roof, in a professional business atmosphere and in the context of 'the meeting place of the global leather industry'.

Features to look forward to at MM&T 2016

MM&T consists of around 1,200 exhibitors accompanied by 20,000 visitors who come to Hong Kong not only to buy but also to look for information, seek colour trends, visualise the latest fashion for upcoming seasons, talk with their peers about the market, and listen to all the rumours that tend to float around on the stands and in the aisles of the mega trade fair. At the same time, it is an ideal opportunity to combine the visit to MM&T with visits to major Asian clients in the region.

For the 2016 event, countries such as Brazil, Italy and Spain have increased their group pavilion sizes by as much as 25% - acknowledging the key role MM&T plays in their annual international marketing and sales efforts.

The 2016 focus country will be Turkey, showcasing its signature project 'Meet the Turkish Effect'. A wide range of leathers will be on show from this major European country that forms part of the global leather industry.

The organisers of MM&T have transformed the trade fair over the years into an integral event that makes it more than just a trade exhibit.

For example, for the 2016 event, the newly inspired MM&T FabLab will be launched. This section of the fair is where buyers can find performance materials that are used in the manufacture of ready-to-wear sports fashion as well as a whole range of footwear components.

Being aware of the busy needs of international visitors to MM&T, the organisers introduced a concierge service last year. This free-of-charge service is designed to maximise buyers' time at the fair so that they can locate the exhibitors that have the specific products they are sourcing for upholstery, garments, leather goods and footwear.

The UK BLC will be organising a conference on sustainability together with APLF where the latest advances in this critical field can be heard from renowned experts.

In addition, APLF's professional trend consultants will present the 'Material Trends Space' once again where materials for upcoming fashion seasons can be seen. This is of great interest to designers looking for inspiration as they can select their materials and then visit the companies that manufacture them at the trade fair, under the same roof.

The fair is also active online with ongoing preshow events that started in December such as the Leather Forum Webinar 'Working together for a Sustainable Leather Supply Chain'. The first and second sessions were presented by IKEA and PrimeAsia respectively.

The bigger picture

MM&T is a key component in the global leather industry and prides itself in promoting and supporting it in good times and bad by actually being part of it as the industry's premier business platform. This aspect will be extended and become even more important as the TPP gets underway and ASEAN develops and expands its intra-FTA trade.

Hong Kong is the right place to be for the leather industry from 30 March to 1 April 2016 for MM&T, which offers the prime opportunity to survey the business horizon now that the 'shakeout' in the leather market has finally taken place and its impact on Fashion Access, MM&T's sister event that takes place concurrently at the same venue. This shakeout has led to lower prices in the supply chain and will attract exhibitors from Fashion Access.

This synergy between the two collocated APLF trade fairs serves to strengthen the total event, and brings customers and suppliers together under one roof where they can interact with and, at the same time, attend to the many thousands of buyers that visit both fairs during their three-
day duration.

2016 focus country: Turkey

As the 2016 focus country, the Turkish Leather Council will present a new showcase called the Prism, which involves a 3D display of selected leather products. Apart from the display of leather art, a wide range of leathers will also be on show from this major European country that is integral to the global leather industry.

New national pavilion from Africa at MM&T 2016

MM&T 2016 organisers have announced a new national pavilion from Zimbabwe, which will include five companies to exhibit their leathers:

• Global Tanners
• Tambudze Tanning
• Uonamidezigns
• Belmon Leather
• Wetblue Industries.

The decision to exhibit on the international stage this year at MM&T has its roots in the United Nations (UN). The International Trade Centre, a UN agency, conducted a development project called Trade and Private Sector Development Program (TPSDP) funded by the European Union in Zimbabwe during 2013 and 2014, and one of the various beneficiary industries was the leather industry.

The main purpose was the improvement of Zimbabwean hide quality, particularly focused on skinning and conservation techniques. The ITC
developed in collaboration with the Zimbabwe Leather Development Council (ZLDC), which is the focal point of the Zimbabwean leather industry SMEs, and two training booklets were distributed throughout the country to butcheries, abattoirs and traders.

Plus, the ITC held training workshops in rural areas and donated 200 professional flaying knives purchased in South Africa from Jarvis, distributed by the ZLDC to rural butcheries, who provide for the majority of hides in the country. The whole project was coordinated directly with private enterprises without government intervention, making it as efficient as possible. And the first results are now emerging with a Chinese buyer recently visiting Zimbabwe.