We estimate that 15% of the world’s sheepskin garment leather is manufactured in Xinji City and we also supply half of the Chinese domestic consumption’, says Liu Yunduo, secretary general, Xinji Leather Industrial Association. The city has had a leather making tradition going back 400 years and the archives show that tanning was carried out in the area during the Ming and Qing dynasties.

Since the Chinese government announced reforms to open up the Chinese market in the 1980s, leather making in the area has taken off. In 1993, a ‘leather city’ was built in the centre of Xinji City to showcase leather products and was followed in 1996 by the relocation of the tanneries to three purpose-built tanning districts. The road between Beijing and Xinji looks new and is modern and fast. Only the last few kilometres are slow and uncomfortable.

Alongside Haining City near Shanghai, Xinji is the largest leather garment and garment leather producing region in China. The tanning cluster is located approximately 400km south east of Beijing in Hebei province.

In 2001, Xinji was named ‘China’s capital of leather and leather garments’ by the China Light Industry Association and the China Leather Industry Association. In the same year, output was recorded at US$600 million with exports accounting for US$250 million of the total.

Since 2001, the sheepskin garment market has slowed and a few of the larger tanneries such as Dong Ming and Pilot are exploring new lines. ‘The prices on all wool-on, pickled and wet-blue selections have increased steadily over the past 18 months’, Xie Zhong Sheng, vice general manager, Pilot Leather, told Leather International.

‘This year we have bought more raw materials from China, as international prices have increased by 7-8%, and the quality has fallen. The slowdown of major consumer markets, such as the US, the EU countries and Japan, has also had an impact on our sales’, he added.

There are 137 tanneries covering the three industrial zones around Xinji City. The estimated total capacity of all three zones is 30 million pieces of sheep garment leather annually or 50% of the country’s total production.

From the total number of tanneries, 13 have a capacity to produce more than 10,000 pieces per day, a further 20 have the infrastructure to manufacture up to 5,000 pieces and the remainder are smaller enterprises which are able to process up to 5,000 skins a day.

‘We transferred our production from a site 5km outside of Xinji to one of the new tanning districts to reduce our environmental loading and cut costs’, says Xie Shaoming, chairman, Dong Ming tannery. ‘Being the largest tannery in Xinji City and ISO 9002 certified we had to take a lead’, he added.

The leather industry in Xinji City, which means ‘Fair City’ in Mandarin, has been transformed since the 1980s, explained Liu Yunduo. ‘The city is located close to a river and is geographically close to Beijing.

In the past, it was mainly local farmers who produced low-grade leathers for the local market. Today, we have high quality companies exporting finished leather and leather products all over the world.

‘A few years ago, I visited the Solofra tanning region of Italy. After my visit, I think that Xinji City is very similar in terms of structure and in terms of the leathers which we produce to Solofra.’

‘In the past, our aim was to catch up with the Italian and Spanish tanners’, says Xie Shaoming. ‘I think that now the gap is much smaller and it is the time for the Chinese tanner to grow strong.

‘Now that we are in the WTO, competition will increase but so will our access to new markets. At Dong Ming, we are looking at a comprehensive approach to the new opportunities that entry to the WTO presents to us.’

All the major chemical manufacturers have offices and distribution facilities close to Xinji and some of the world’s major brands buy leather products made in the area indirectly, claims Liu Yunduo.

Major markets

‘For tanners and the finished product manufacturers, Russia is the major export market followed by South Korea, the US, Japan and the European Union countries. Xinji has a very good reputation in Russia and we estimate that 80% of the sheepskin garment leathers exported there were produced by us’, says Liu Yunduo, secretary general, Xinji Leather Industrial Association.

The three tanning districts account for an area of 430,000 sq m comprising the covered buildings and not including accompanying land. The zones include Xinji City, Shi Pao Ying and Dong Liu Ke which are all located close the garment manufacturers in central Xinji.

As well as the tanneries, there are 772 garment makers with an annual output of 4 million garments or 30% of China’s total. The annual sales output is estimated to be worth RMB2.45 billion (US$295 million) according to the Xinji Leather Industrial Association. There are also 164 leathergoods factories with an annual output of 12.5 million pieces worth RMB425 million (US$51.2 million).

Sheep garment leather is the main product of the local companies, although ovine shoe upper, cow upholstery, bovine leathergoods and clothing leathers have been developed in the recent years.

Additionally, there is also a Chinese-owned tannery machinery manufacturing plant, chemical distributors and several furskin producers. The town is also a major centre for wool which is a by-product following the fellmongering of sheepskins.

Directly and indirectly, the leather industry in Xinji City provides employment for 50,000 people representing 1,073 companies.

Environmental controls

During the development of the tanning zones, a common treatment plant was installed. The environment was given as the single biggest reason why the tanneries relocated. As separate units, each tannery had mixed wastewater treatment standards with some unable to comply with international standards. Through the local industrial association, the tanneries were relocated to their present locations in the mid to late 1990s and a common treatment plant built.

According to the Xinji Leather Industrial Association (XLIA), wastewater is treated in three separate stages before being discharged back in to the river. Primary treatment is carried at the tannery before reaching the common treatment plant.

The XLIA said that the Xinji tanners have invested RMB10 million (US$1.2 million) on the plant. The plant features both chemical and biological treatment tanks including aeration. Solid waste is collected and sent to a landfill site.

Calcium hydroxide is added to neutralise the pH before the treated water is transferred to the central city effluent plant.

Through the Xinji Leather Industrial Development Committee, the city has invested RMB20 million (US$2.4 million) on the central treatment facilities. The city sewage treatment plant can handle 100,000 tons of treatable waste per day.

Dong Ming

The largest company in the city are Xinji Dong Ming Industrial Group Co Ltd who produce 20% of the leather made in Xinji City. Xie Shaoming, the current chairman, established the company as recently as 1983. Shaoming took advantage of the government reforms at the time and began processing sheepskins.

Since the 1980s, Dong Ming have expanded rapidly and began producing sheepskin leathers followed by finished leather garments. More recently, the company have diversified into the upholstery leather business.

‘We are one of the largest processors of sheepskin nappa leathers in the world. We produce mainly black items although we will make any colour depending on market requirements’, Shaoming told Leather International.

‘In more recent times, I have noticed a sharp increase in the costs of the raw materials and a slight decline in orders. Therefore, I took the decision to switch some of the production to bovine upholstery to diversify part of the business. Currently, we produce leathers for the ‘after car market’.’

The 60,000 sq m tannery and garment factory was built in 1995 and has the capacity to process 20,000 sheepskins, 800 upholstery hides and manufacture 400 garment pieces per day. They employ 1,100 workers and Xie Shaoming and the vice chairman Fan Chi Shing are the major shareholders. There are accommodation dormitories on site for many of the workers.

In 2001, the factory reported a turnover of RMB500 million (US$60.2 million) and export sales turnover was reported to be RMB260 million (US$31.3 million). The major market is China accounting for 52% of the turnover. Major export markets include South Korea, Russia, the US, Canada and Hong Kong.

This year has been much tougher for the company although they have still recorded a sales turnover of RMB110 million (US$13.25 million) for the first half of the year. Compared with last year, sales are down.

Shaoming puts the blame on reductions in sales and on rising raw material prices. Dong Ming source woolled skins and wet-blue from China, Australia, the US and a number of African countries. Raw hides are purchased from the US, China and Australia.

‘If the reduced demand for nappa continues, I might look at producing doubleface and compete with the Turkish, although at the moment I want to concentrate on the ‘after car market’. Many Chinese now want leather in their cars and demand is increasing.’

There are approximately 40 processing drums inside the tannery including 15 made from steel. Most of the basic equipment is Chinese made but there are a large number of Italian and some Korean built equipment, especially in the finishing area.

Skins are toggle dried and spray finished. Spray finishing is also employed during the processing of bovine hides although there are also rollercoating machines.

Sheepskins are fellmongered using traditional sulfide painting techniques by hand and the wool is cleaned, dried and resold.

Pilot Leather

Almost as large as Dong Ming, Pilot Leather Co Ltd moved into the Xinji City tanning zone in 1998. Pilot have the capacity to process over two million sheepskins per year and they also manufacture 150,000 leather garments per annum. In 2001, their overall turnover was RMB100 million (US$1.45 million). They have been operating at a lower capacity during 2002.

‘We concentrate on producing high quality sheepskin leathers for clothing, shoe upper and leathergoods leathers’, says Xie Zhong Sheng, vice general manager, Pilot Leather. ‘We have expanded rapidly over the last few years and now is the time to consolidate the business and improve our quality further.’

Pilot employ 950 workers and the company are owned by the majority shareholder (90%), founder and current chairman Zhang Ming Sheng. Investors own the remaining 10%.

Their main export markets include South Korea, Japan, the US and some European Union countries. They work particularly closely with a Korean company who have established a branch office within the Pilot Leather building. Finished leather direct export sales account for 15-20% and Sheng estimates that a far higher percentage are indirectly exported through South Korea and Hong Kong. Leather garment exports account for 80% of production.

Pilot source 60% of their raw materials from China, particularly the north-eastern province of Xin Jiang. The remaining skins are imported as salted wool-on, pickle or wet-blue from France, Ireland, the UK and Kenya.