Two shows, one city

Harking back to the first ACLE in 1998, APLF director Michael Duck recalled that the snow during the opening ceremony in Beijing was regarded as an auspicious omen, heralding good crops. “Plus, snow is good for the leather business since people buy more leather in winter,” he said. “Thankfully, it’s still a key show on the calendar.”

Few would disagree on those two points, but at this year’s show, success was a relative term as far as individual businesses and sectors, as well as the overall market, were concerned.

The third World Leather Congress (WLC) took place at the Pullman Shanghai South across town the day before ACLE kicked off. The theme revolved around the leather revolution and how the industry would respond, and 750 delegates attended, which was more than twice as many as had been expected. While this was a great result for the speakers and co-sponsors the Taiwanese International Leather Association (TILA) and the China Leather Industry Association (CLIA), the unexpected glut created some minor logistical problems. Nonetheless, the show ran smoothly and the consensus was that it surpassed expectations.

Among the dynamic panel discussions throughout the day, other highlights included talks from Li Yuzhong, chairman of CLIA, about what we could expect from China in the near future; Stephen Jeske, senior VP of global sales and marketing, GST Auto Leather and the argument for automotive leather; Jon Clark, CEO, PrimeAsia on the necessary characteristics of the modern tannery; and Fernando Bellese, marketing and sustainability manager, JBS, about future trends in raw materials.

The influence of ecommerce on consumer behaviour was another key topic, as well as the importance of properly labelling leather, and the many imitation materials that are deceiving and confusing consumers. Transparency throughout the supply chain was an overriding theme, and was presented as essential to leather manufacturing’s future.

On with ACLE

Once the ceremonial ribbons were cut the following day at the Shanghai New International Expo Centre (SNIEC), ACLE was under way. Many of the same themes from the WLC resonated from the start, especially during the Smit & zoon-sponsored Hidenet/ APLF leather conference on the first afternoon.

Themed around mapping a course for leather in China, discussions covered broad swathes of influence for the Chinese leather industry, including those from US Hide, Skin and Leather Association (USHSLA) president Steve Sothmann, who spoke about recovering herds in the US, where projected numbers are expected to reach 94.5 million head in 2018, increasing slaughter and bumping hide availability up by 6% by the end of the year.

He also explained how diminishing drought in the central US will contribute to these increases, as well as how the uncertainty surrounding Decree 159 might affect trade relations between the US and China.

Gustavo Gonzalez-Quijano, secretary general of Cotance, also discussed supply concerns in Europe, and what they’ll mean for China’s tanners and leather buyers. Smit & zoon CEO Hans van Haarst, meanwhile, shed light on the importance of CSR and organisational transparency, which were integral to the chemical company’s development of its ‘Product Passport’.

Mixed feelings

Perceptions on the floor of the show were mixed. The first morning was buzzing overall, but some stands thrived while others were quiet. Many companies were very satisfied with meetings, however, as the fair progressed. Also, sections of the halls were blocked off, which hadn’t been the case last year, and there were a couple of late cancellations of big stands, most notably from BASF, following its acquisition by Stahl.

These factors, combined with avenues “as wide as the Champs-Élysées”, as Pakistan Tanners Association executive member Agha Saiddain put it, made foot traffic appear sparse. The total number of exhibitors was up on the 2016 show, however, and included countries that weren’t represented last year, such as Argentina, Uganda and Vietnam.

“There are 21 group pavilions in 2017 versus 19 in 2016, thanks to pavilions from Ethiopia and Thailand,” said Duck. “Also, we have taken more square meters in venue space, but have had a few last-minute reductions, mainly due to economic problems with some exhibitors.”

Despite a slight drop in visitors from mainland China, the total number was comparable with last year, with more buyers from ASEAN countries including Taiwan, Indonesia, Vietnam, Japan and Korea.

A 25–30% decline in leather prices since APLF in March contributed to a sense of ‘bargain hunting’, but CLIA chairman Li Yuzhong gave some overview data to show optimism as in the first half of 2017, Chinese leather, footwear and leather goods industries maintained steady growth whereby sales revenues achieved an increase of 6.6% to $103.5 billion, or an increase of 2.1% compared with the same period last year.

Despite a decrease of 8.2%, exports in the first half of 2017 totalled $38.4 billion, while imports reached $4.7 billion. Concurring with that optimism, Nick Winters, MD at Nick Winters Group, said that while there might have been fewer visitors in attendance, the biggest players were there. “It seems the hide market has found a bottom for the moment,” he said, before adding that the underlying feeling was one of “quiet optimism”.

Chemical companies seemed to exude the most energy, especially in the Chinese domestic halls, but Lanxess, Smit & zoon, Stahl, TFL and Trumpler were all bustling with people eager to see demonstrations of new products.

“Overall, ACLE was a success,” said Sothmann. “The organisers continue to do a good job in bringing together the key sectors of the industry and delivering top-notch service. For suppliers, though, the market continues to be tricky to navigate.”

ACLE in numbers

• 1,081 exhibitors from 39 countries
• 92,000m2 floor space at SNIEC
• 21 national pavilions
• 20-member Vietnamese delegation
• 23,500 visitors
• 679 Chinese companies exhibiting
• 48 Italian exhibitors
• One Indonesian exhibitor

A Brazilian perspective

ACLE is always important in terms of the relationships between Brazilian tanneries and their Chinese customers. The three days provides a platform for business start-ups, market assessments, progress in previous negotiations, and reinforcement of Brazilian leather’s image in China. The participation of 18 Brazilian business groups at this year’s show was supported by the Brazilian leather project—an initiative of the Centre for the Brazilian Tanning Industry (CICB) and the Brazilian Trade and Investment Promotion Agency (Apex-Brasil) for the expansion of Brazilian leather in the international market.

Curtume Coming’s commercial manager, Rafael Mariño, pointed out that this year’s event took place during a time of market adjustment, in which buyers and sellers could observe industry trends. For Emerson Fuga, director at Curtume Luiz Fuga, ACLE reiterated the presence of Brazil in the international scenario. “It consolidates the image of Brazilian leather, especially finished leathers, and establishes a long-term vision of the country’s industry,” he said.

Gilmar Harth, director of the Grupo Bom Retiro, considered the fair to be positive, consolidating its relationship with customers and helping to stabilise the market. For Adriano Busa of the Pampa Peles Industry, prices and demand set the tone of ACLE.

Gabriel Doria of the Gobba Leather tannery, pointed out that there were some great deals made, which could help the market to expand and develop, while Eduardo Fuga, director of Fuga Couros, believed that ACLE enabled valuable meetings with several clients at the same time. “This enables us to reach out to a larger group of customers in less time than if we had to visit them individually,” he said.