Italian Tanners’ Association UNIC, at their general meeting on June 16 in Viareggio had to face the unpalletable fact that in 2005 Italian tanners lost 3.1% of their revenue and 2% of production volume. This was partly due to the strong euro. However, according to the meeting the market is recovering and investments are no longer being postponed. The mood was for members to come together to take steps forward.
The second half of 2005 was characterised by a general improvement and the downward trend appeared to have reached rock bottom. Exports are growing in importance, now only 34% of leather produced remains in Italy. But although exports are up in tonnes by 6.1%, the revenue generated is down by 2.5%. This would suggest that the Italians are selling more leather at a cheaper price. Lorenzo Mosconi, president of Unic, said: ‘the contrast reveals the sacrifice made on margins due to the strength of euro.’ The decline is also due to stiffer competition especially from Asia.
Wet-blue exports to China were up by 50% in weight and 30% by value while the number of companies operating in the sector has decreased by 2% according to Italian reports. Raw materials imports are down 6% in favour of semi-finished leathers. Imports of raw hides are down 2.6% in quantity, wet-blue down 8% and crust by 15%. Meanwhile raw materials prices rose by 10% over the same period.
There was a call for tanners to leave old rivalries behind and work together since the economies of scale which could be achieved would benefit them greatly. The meeting also wanted to see a ‘denominazione di origine’ for leather to certify excellence in processing and respect for the environment. Leading Italian tanner Giuseppe Volpi stated that the president’s report ‘leaves room for optimism’.
According to Umberto Anzolin, president of the Arzignano Tanners’ Association, the sector has been focusing on logistics, traceability, environment, education and research to secure the future. He called for unity in goals and the route to achieve these objectives.
Interestingly the Italian tanners discussed the problems posed by other countries they claim to have protective markets. The recent EU anti-dumping legislation is clearly one method that the Italians and others are using against countries that they see as not having free and open markets. They are striving against protectionism and looking for more reciprocity in international trade. According to Italian reports, they are looking for alliances to isolate Argentina, Brazil, India and Pakistan who they describe as the worst protectionists. The Italians are also putting pressure on the WTO to combat the virtual closure of Russia’s raw export trade. Among other issues discussed at the meeting, Rossano Soldini (president of footwear association ANCI) catalogued obstructions by Italian politicians on the ‘made in Italy’ project and guardianship of Italian and European leather.
Over in the UK, president of the newly named UKLF, Jonathan Muirhead, said that the UK leather making industry currently has an annual turnover of about €435 million, a workforce of about 2,500 people and exports around 70% of the leather produced.
‘Despite the increasingly competitive nature of international trade in the sector, with global shifts to South East Asia, Indian sub continent and South America, the UK industry continues to record a positive trade balance, which for the last complete year available, was €65 million. If trade in raw hides and skins is included the positive balance is €154 million.’ The UK Leather Federation plays an important role in representing the needs of our industry to government, in problem solving and by providing a two-way route for the flow of information. It is an important challenge to ensure that politicians and their officials understand the requirements of the leather industry.
Samantha White