The Tamil Nadu regional government have imposed a strict limit on the levels of effluent going into the main watercourses. These include limits on total dissolved solids, chromium and other waste materials from the leather industry.

The Shafeeq Shameel Tannery in Ambur have developed a number of alternative technologies to help in effluent disposal. One is a Unido backed scheme for removing salts from liquors. The improved solar evaporation operating system works by taking the soak liquor, clarifying it and pumping the liquor onto an inclined roof, where it runs down to a collecting vessel. The sun heats the roof and water begins to evaporate leading to a concentrated saline solution. This solution is then put into solar pans and the water allowed to evaporate completely, leaving a crusty salt, which can be mixed with new salt and reused in salting hides and skins. The use of a heated roof to evaporate the water means a greater surface area compared with just putting the liquor into a solar pan and this in turn means that the evaporation rate is faster.

Apart from the evaporation unit, the tannery also recycles their chrome, with the liquor going into the pickle. The used chrome, of which there is very little, is mended with fresh chrome for the tanning process. They are also considering using the lime sludges in cement recipes and the effluent is used to irrigate 20 acres of gardens and cotton plantations. The solid waste is also used to produce compost. After 15 days a mix of sludge, straw and greenery turns into a mulch and is ground up, before being added to the plantation.

The Shafeeq tannery are producers of leathers for shoe production. They are part of SSC group, which also includes SSC Shoes Ltd, and Bonaventure Shoes Pvt Ltd. The majority is EI goat, which accounts for about 60% of production, with 30% being cow hides that, at the moment, are bought in from Egypt, and the rest are sheep.

SSC shoes are producing around 3,000 pairs of shoes per day from sports to classics, casuals to non-leather soled shoes. The competition in the market is fierce, with China being the main adversary, in the sports and non-leather soled shoe lines. The company are staying ahead of the competition by upgrading their processes and producing more technically complicated shoes to compete in the high fashion stakes. At the moment the majority of high fashion shoes in India are imported. However, local producers are hoping to change this.

Although tanneries like Shafeeq Shameel have their own ETP, Ambur tanners have invested Rs500 million (US$ 11.6 million) in a common effluent treatment plant. This was commissioned in 1995 and has a capacity of 2.2 million litres per day. The chief chemist, C Masood Javid, said that current levels were about 1 million litres per day, which comes from 40 tanneries currently operating. Originally, 49 tanneries were connected to the Ambur tannery effluent treatment company who are charged Rs17 per kilogram of production. The costs of running the site amount to around Rs1 million per month. The activated sludge process, which is at the heart of the effluent treatment plant, is 98% effective, with 50% of the treated effluent going to the river and the rest being used for irrigation of a cashew tree plantation. The proceeds of which are used to cover some of the running costs.

One of the smaller producers in Ambur is MNB engineering. Run by KS Mani, this machinery manufacturer produces tannery machinery for the industry all over India. They have orders for various machines from Chennai, Trichy and Jalandhar, as well as Ambur. Mr Mani said that business was not as good as it had been. ‘Pollution controls have closed a number tanneries and there are no orders for new machinery. We are just making do by servicing and reconditioning old machines.’

MNB employ seven people and it takes Mani about 15 days to produce one machine. The steel is forged in Bangalore with other materials needed to produce the machine coming from Bangalore and Ambur.

The tannery of the NMZ group of companies, NM Zackriah, is another that has a model effluent treatment plant. They recycle their chrome but the main problem is salt. The effluent, which is high in salts, is used to irrigate neem and babu plantations and cover about 30 acres. ‘We need to reduce our TDS, which we do by using solar pans’, said Thameem Ahmed, manager of the tannery.

The tannery was formed in 1972 and produces leathers from cows. They produce about 700,000 ft² per month. The group produces leather for shoes. Currently, they are producing about 300,000 ft² per month for Ecco, all in one style. Other customers include Swiss company Fretz Men, for whom NMZ are currently producing 800 pairs per day. They hope this will rise to 2,000 pairs per day soon. They also work for the Ministry of Defence by producing black leather safety boots that will withstand a weight of 600 kg dropped from a height of 10 feet. Shoes are also produced with a Gore-Tex lining to impart waterproofness.

‘Business is satisfactory at the moment’, commented Thameem, ‘We have had three of our colours selected by Modeurop for the 2002 season, which is very satisfactory.

‘Basically, we supply the quality required by the market, whether it is domestically or internationally. We have a new CAD system and involve the staff in training programmes.’

This means that, currently, the higher grade skins are used for the international markets, with the less discerning domestic market accepting lower quality leathers. ‘This is changing, however. The domestic market is now becoming more demanding and they have started to demand higher grades for shoes.’ Mr Thameem commented.

Coming back towards Chennai, the village of Vaniyambadi has a number of tanneries. One of these is the Naser Tanning Company. One of the partners, M Altaf Ahmed, said that business was improving, but that the question of total dissolved solids was the big problem: ‘The pollution control people are asking for 2,000 ppm, but there is 4-5,000 ppm in the groundwater around here. So, they want us to clean up the water that comes into the tannery.’

The company export to Germany and Italy and have a cooperation with the Bali Leather Corporation in the US. They produce waterproofed golf gloves. Nasar are also specialised in suede and sheepskin nappa as well as goat suede. They produce around 2,500 pieces per day. An interesting process that they carry out is to lightly shave pickled stock, without a pretannage. The skins are hung dry to reduce the moisture content and then shaved. This removes the remains of any flesh and allows greater penetration of the chemicals. The pickled stock comes mainly from Eritrea.

P S Rajagopal Naidu is one of the elder statesmen in the leather industry. He was one of the MPs elected when India was freed from British rule and is managing partner of Jai Bharath tannery, who have a tannery at Thyagarajapuram. Speaking at his offices in Periamet, Chennai, he said that government policy was at a crossroads. ‘The small tanners want to export EI leathers as they have done for years, but the government wants foreign exchange and, therefore, the two are going in different directions.

‘The problem is that different lobbying groups influence MPs. There is no champion for the small tanner but in the exports of finished leather and leather products the industry is motoring ahead, despite unhelpful government policies.

‘Their policies are not liberal enough, there are no tax incentives for exports. The government should offer concessions on drawbacks, which are being withdrawn from 2002 because the government needs money. The overall balance of payments is negative and what is killing the economy is the need to import things like oil, which effects the price of goods and services in the country.

‘The leather industry cannot cope on the finished leather side alone. They may be OK with leathergoods, but we need to export EI stock again.’

When asked about competition these days, Mr Naidu said: ‘The competition for India comes only from China. They do things differently, there is no problem with labour, unlike here. Workers can work 10-12 hours a day without interference from the unions. Here you cannot work more than 8 hours and the unions enforce it. In some states the legislators have taken control and banned excessive working times.

‘The advantage the Indian industry has is that Europe, and Germany in particular, likes Indian leather to produce high quality shoes. The Chinese have the monopoly in mass production of non leather and cheap quality shoes. They have not succeeded in the classic shoes market.

‘However, China exports 70% of their leather to the US market. This compares to just 1% for India. This is a market that we must exploit. Given the drive, the market is available. But, the problem is that 20 years ago, 1 crore investment would earn a profit of 50-60 lakhs. Now several crores of investment won’t give you that sort of return.’

He had an interesting comment about the animal rights groups that have been playing havoc with the industry in the country. ‘Peta are correct in their findings, indeed India should be thankful. The problems stem from the fact is that the government is controlled by the individual states. The control should be from the centre and not the other way round. In the 1950s, MPs were respected, but not anymore. When I was an MP there was no whiff of corruption.’

The question of the small tanner losing out was raised by Nazar Mohamed, an exporter of finished leather and garments and Faiyaz Ahmed, honorary joint secretary of the All India Skin and Hide Tanners & Merchants Association (AISHTMA). The crux of the problem is the export duty imposed by the government on certain categories of leather, including EI tanned skins. The official AISHTMA policy is that they don’t wish to interfere on this issue and have decided to have a neutral stance on this policy. Their only thought is that the government policy must be enforced. ‘There is no point in having a 15% export duty, if the exporter or buyer buys at 15% less to cover the cost of the duty.’ The other problem is that the duty had led to an increase in raw material prices because more Indian tanners are now producing through to processed leathers. This will pose a large problem for the industry, in particular the small scale tanning industry.

While it could be argued that the imposition of duties forces tanneries to invest in capital investment, environmental control, human resources and training, the small scale tanning industry say they do not have that capability. From Nazar Mohamed’s point of view the duty means that finished leather manufacturers have time to establish themselves. They have invested in the technology mentioned above, have found the markets and Mohamed thinks the way forward is to enforce the duty policy. ‘While the culprits are the tanners who are misusing this duty, I cannot see why there is a disparity in duty on wet-blue (which is set at 60%) and EI leathers (set at 15%). If you are going to have duties, surely this should be the other way round because an EI tanned leather is a unique environmental product.’ Thus, by setting a premium on it, and ensuring that the buyers pay that duty added price, India has a product that sets it apart from the standard wet-blue.

He concedes that any cushioning effects of duties should be realistic for finished leathergoods, because the manufacturer can claim drawback, ie reclaim the tax they pay on the chemicals they import. ‘In the 70s, duty was as high as 25% and the buyers paid and there were incentives on finished leathers, so we need to close the loopholes and ensure the government enforces this policy.’

In a scam acknowledged by government official back in November, Indian exporters are pocketing crores of rupees by misusing a clause that permits duty exemption on finished leather. Table 1 shows how the rate of duty varies depending on the article and exporters have been quick to spot that finished leathers are exempt. To further compound the scam, they are also claiming the 7.5% duty drawback that the law provides on finished leather. The government is thus losing revenue equal to 22.5%.

It also affects the small tanners, as a letter from the Trichy Tanners Association to the chairman of the CLE, MM Hashim, highlights. It says that the CLE have not taken into account the problems of the small tanners with respect to the export duty. The letter states: ‘You are aware that small scale tanning industries are working under capacity and their performance has declined ever since restriction was brought to the export of certain categories of leather including EI tanned leather and in finished leather from 1992 onwards. In our prolonged representation year after year, finally the commerce minister Thiru. Murosoli Maran, through notification No 45 (RE99) permitted the export of EI tanned leather subject to payment of 15% export duty, which was widely welcomed by industry in India and abroad.

In October, the government announced a free export policy on other types of leather subject to an export duty of 15% to 60%. To this date, except for a single export by a lone exporter, nobody has exported because of the highly uneconomical and unreasonable duty structure levied by the government under our councils’ advice.’ They are also unhappy about increases in fuel, wages, chemical costs and other legal obligations.

A completely different view came from a chemical supplier. ‘The leather chemicals industry in India was in excellent health in 2000 and I expect the same for 2001.’ This was the upbeat analysis from NM Vasa, director of Indchem distributors Ltd. The company have widespread dealings in India and are wholesalers of BASF India Ltd in southern and western India. ‘The industry is adding value towards the finished product, which is good for us’, he says. ‘Shoes, garments and leathergoods are strong for India and the chemical industry can make use of this.

In fact we are being closely watched by western countries such as Italy and Germany, who have had their fingers burnt in China. This is due to the different culture and language difficulties. Here the problems are less and since April last year the Italians have been particularly interested in doing business here.’ However, he doesn’t think this will affect Indchem’s business: ‘Indchem are increasing business day by day. With India’s entry into the WTO, Indian chemical manufacturers will be exporting their chemicals, mainly to the far-east and Africa, where the demands are less stringent.’

Mr Vasa was also upbeat about the IILF: ‘the future of the fair is now more interesting. It is now in one place, which is better than having to keep moving, as has happened in the past few years.’

‘To sum up, I would say that the Indian leather and chemical industries are healthy and the future is good. With the help of CLRI, who are at the heart of the industry, the industry in good shape.’

I would like to thank Mr S Govardhanan from Colourtex for conveying me around Tamil Nadu and Chennai. His company are a leading, customer orientated dyestuffs company, who have offices all over India. I would also like to thank his assistant, Abdul Walid, who kindly accompanied us on the trip to Ambur.

Note: In the TDS article in March LEATHER, the tannery involved is Shafeeq Shameel Tannery not Sura tannery. Apologies for any confusion caused