While studying psychology I was told that Charles Darwin’s assertion that it was the survival of the fittest was untrue and that those who survive are those who are able to adapt to changing circumstances and environment.
I was recently privileged to spend time in India where there is a plentiful supply of livestock, a huge workforce and a tradition of tanning and shoemaking. As yet, they do not have their fair share of the global market in these areas but with Europe’s anti dumping duties on Chinese and Vietnamese footwear their future has never looked brighter. If they can make the necessary adaptations, that is.
India has excelled in the field of IT and this industry has mopped up many of the more able workers as well as pushing up wages for industries competing for manpower. This proves that the country has the ability to excel and, indeed, the leather and footwear industries are growing but not as quickly as they should.
India’s tanning industry suffers from entrenched and traditional views and on the whole is not embracing change. Those tanners who have recognised the inevitability of new circumstances are forging ahead while the traditionalists are losing out to their more go ahead neighbours.
Tata, India’s biggest tannery, have greatly expanded their production capacity to enable them to cater for their growing upholstery leather business. This means that they no longer have to rely on sub contract work in the south of the country.
Then there are the farsighted tanners in Kanpur. Aware of the problems of tanning along the banks of a river serving the local population they have anticipated the need to relocate and have built themselves large modern tanneries with a much greater capacity than before.
So far fifty tanneries have set up in the Calcutta complex in Kolkata. To offset the increased costs now that they have to pay for water consumption and effluent treatment, they need to double their former production. However, a number of the Kolkata tannery owners are still dragging their heels. Those that have been used to cash transactions are not relishing the thought of the greater transparency of trading which will be required by the new complex with its need for accountability.
For many years Tamil Nadu was responsible for the bulk of leather production in India, accounting for 70% of the country’s output. This is now down to around 50% as they lose their market share to their proactive competitors. They also face greater competition for raw materials as the bigger units in the north snap up available supplies.
At the inauguration of the India International Leather Fair, Mukhtarul Amin, the new chairman of the Council for Leather Exports, said that by earning US$2.7 billion in the year 2005/6, the leather industry had become the eighth largest foreign exchange earner in the country. Indian leather exports have grown from $1.6 billion in 1996 to $2.7 billion in 2006 but despite this increased export volume, India’s share of the global market did not grow proportionately.
Union Minister of State for Commerce Jairam Ramesh urged the leather industry to change focus, from exports to job creation. He said that while every attempt should be made to reach the export target of $7 billion by 2011, it was more important to generate half a million new jobs, especially for women.
According to Amin, the leather industry has gone some way towards fulfilling the government’s desire to bring more women into employment in order to increase the standard of life for families. He said that women already constituted more than 35% of the workforce. In addition, the leather industry has contributed to the benefit of society by employing large numbers of people from the weaker sections. Amin told the government officials present that the desired goal of $7 billion would effectively double the leather industry’s global share from 2.5% to 5% in four to five years. This is a huge undertaking. I wish them well.