The 3rd Upholstery Leather Conference concluded successfully on April 5 with participants from major tanneries and top manufacturers taking part. The conference was timed to precede the APLF fair in Hong Kong to take advantage of visitors to the region and they were able to hear the views of leather business realities in China and the Asia Pacific region from figures such as Dennis Thams, ceo Shanghai Richina, and Jay Shane, president Cosie Leather Products. Delegates also had the benefit of cocktails, lunch and a gala dinner by courtesy of BASF and Fenice, who were sponsors of the conference along with APLF Ltd.

Dennis Thams explained that two major issues confronting the leather industry in built up areas such as Shanghai are labour shortages and power shutdowns. For Shanghai Richina this means investing in mechanical means for replacing workers and for power generation. It may seem unthinkable that there should be a shortage of labour in China and in the past it was possible to import workers from other territories where necessary. However, now that development of industry in China is so far advanced and widespread, this is no longer possible and the leather industry has to compete with many other industries who not only offer more attractive work but also more money.

He said that Vietnam was now the second biggest producer of footwear in the world but that the industry was largely controlled from China. Initially the reason for the shift in manufacturing from China to Vietnam was a way of avoiding footwear quotas which were levied against Chinese made footwear. Now, however, it is the availability of local labour which is a main attraction.

Jay Shane started his leather clothing manufacturing and exporting business in Taiwan in 1974 but moved to China in 1988. He describes China at that time as a jungle. He lost four factories in one year and said there was no way to fight a lawsuit so he just had to let them go. Copying was rife and many of his experienced workers were poached by other companies. He did not give up, however, and in 1993 went into cut and sewn upholstery kits. At the time there were no professional upholstery leather tanners in China and he imported Lackawanna buffalo hides.

By 1996 he was making sufficient noise in the market to be noticed and once more other companies began copying his lines and stealing his technicians. He says this is the reality and nothing can be done about it. Initially he had his leather contract tanned, importing hides and chemicals and supplying his own technicians but he could not control costs so decided in 1999 to set up a joint venture tannery TTXL. TTXL now process 6 million sq ft of upholstery leather/month.

At first glance, the topic of ‘Import procedures, customs practice, VAT and tax issues in Guangzhou, China’ may not seem the most interesting subject but Wallace Leung, general manager Southern China, Jas Forwarding, Hong Kong, managed to bring clarity and humour to a very necessary side of doing business with China. Leung has 13 years’ experience in freight forwarding and has developed imports of leather from Italy to Hong Kong. He is a consultant to key enterprises in Shenzen and is presently responsible for marketing stategies and development plans to meet the rapid business growth in the region.