Continued decline in the German leather industry

Published: 10 September, 2004

Despite steady demand from the automotive sector, German leather production fell by approximately 5% to 16million sq m last year. The downward trend continued through the first half of 2004, with weaknesses in the domestic market and increased competition in export markets being attributed to the strength of the euro. 65% of finished leathers went to the automotive and furniture industries, 25% to the footwear industry and the remaining 10% to the leathergoods and garment sectors.

The 45 German leather companies, which employ a total of 3,000 people, saw overall turnover decrease by 9% to €600million in 2003. Export sales decreased by 13% to €270million and domestic sales were down by 5% to €330million. The first half of 2004 saw further company closures.

Major export markets by value are Poland (€131million, +6.5%), Hungary (€117million, +3.5%), Austria (€113million, +77.7%), Portugal (€47million, -9.7%), France (€37million, +29.2%), USA (€35million, -11.6%), Belgium/Luxembourg (€32million, +44.4%), Romania (€24million, +22.6%), Czech Republic (€24million, -16.7%), Hong Kong (€23million, -11.7%) and Italy (€22million, -34.7%). In terms of volume Poland and Hong Kong are the major destinations with 7.8 and 6.4 tonnes respectively in 2003, the majority of which was wet-blue.

Major sources of leather imports are Italy (€266milion, -7.4%, representing 43% of total imports), Poland, (€58million, +19.5%), Austria (€49million, -5.4%), Uruguay (€28million, +752.3%), India (€26million, -16.9%), Slovak Republic (€19million, -0.4%), Netherlands (€16 million, -24.4%) Pakistan (€15million, -26.1%), Spain (€14million, -30.9%), and Brazil (12 million, - 40.5%).

Some years ago Germany moved away from bulk leather production for mass markets and developed expertise in specialised high quality leathers for upper market segments such as luxury goods and automotive interiors.

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