ACLE Shanghai continues to grow

11 September 2006

The All China Leather Exhibition in Shanghai was even bigger this year. Occupying five halls with the fifth devoted to the CIFF and Moda Shanghai footwear fairs, which this year had their own entrance to help alleviate bottlenecks at the registration desks. Halls 1 and 2 were for international exhibitors covering everything from raw materials, chemicals and machinery suppliers to tanners while halls 3 and 4 covered domestic companies with Chinese made machinery in hall 4. Local machinery manufacturers are spreading their wings these days and exporting to overseas countries such as Pakistan. The up side of this as far as western manufacturing is concerned is that we heard of Chinese tanneries approaching European machinery companies because they want to take their leather production to the next stage in order to improve their quality to compete in the international marketplace. Western leather industry business has had a tough time in recent years due to the rapid development of the Chinese leather and footwear sectors. GOSH Leather in Australia recently shut their doors as they could no longer compete in the furniture upholstery leather market due to the huge quantity of leather upholstered sofas coming out of China. And even the Chinese tanners are encountering the problem of dwindling profit margins. It is the same old story, the hide suppliers want the best price they can get and the final product manufacturers refuse to pay higher prices for the leather, leaving the poor old tanner getting squeezed in the middle. The business for leather sofas made in China continues to grow but the tanner cannot pass on his increased costs. Despite all the difficulties, the mood in the international halls was surprisingly upbeat. The chemicals stands were kept busy throughout the show, although the flow of visitors slackened on the last morning of the three-day show. The underlying message from tanners and machinery manufacturers was that to survive in the long term they need to innovate and stay ahead of the competition. It is generally recognized that all good ideas will be taken up and replicated but the idea is not to make it easy so that by the time others are offering a similar product you have moved onto the next rung. One chemicals specialist pointed out that the majority of research now being carried out is, of necessity, being directed at meeting REACH and other stringent regulations which the chemicals industry is faced with. As a result new products are the result of developing existing technology which is less expensive than pure research but can prove to be more successful. Again, speaking from the chemical supply perspective, one industry leader exploded the myth that there was a huge amount of money to be made from automotive leather in China on the back of the huge growth in the Chinese car industry. He said that only a relatively low percentage of cars were likely to be made under OEM conditions with leather upholstery. In China, the practice is to buy a car and then take it to a workshop to have leather upholstery fitted as this is much cheaper and does not require leather which meets the stringent conditions set by the big car manufacturers. This year was the ninth edition and was 25% bigger than last year. The three exhibitions together attracted 1,260 exhibiting companies from 37 countries and regions with 23 group pavilions. The Wakayama Tanners Association from Japan exhibited for the first time.

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