Consolidation for Kastro

18 April 2006

Kastro Derecilik Limited Sirketi, based in Izmir's Menemen district, announced that they are the exclusive Turkish agency for the Wallace Tannery of New Zealand and for PPCS, New Zealand's largest meat marketing company, who also have a tannery division. Kastro will additionally represent Emag, a Swiss trader of hides and skins, in Türkiye. The moves indicate the trend for consolidation tactics in the industry, many combining meat packing, rendering and tannery businesses to gain traction in a market with bedrock prices. Emag offer bovine hides, calf skins, lamb and sheepskins, deer and goat skins and crust leather for footwear, upholstery and garments to major tanneries, footwear producers and leather furniture customers. PPCS previously amalgamated with the Richmond Group and now turn over more than $2 billion producing and marketing beef, ox and cow hides. They are the largest New Zealand exporters of pickled lamb and sheep pelts and process over 7 million of these annually. They can also process to wet-blue state, as well as to specific custom requirements. The Wallace corporation have expanded their tannery division and this focuses on wet-blue calf and hides, drop splits, grain splits and wet-salted bull. Capacity is more than 6,000 hides per week. In Türkiye's reduced leather market, Kastro's president, Avram Kastro, told Leather International that he is trying to widen his global scope. Last year, he was one of the founding partners of West Yorkshire Fellmongers, Menemen, a tannery operation that brought in $1 million worth of investment from a Bradford, UK-based trading firm and processes wool-on sheep and lambskins for nappa and doubleface in Türkiye. Depressed prices have generated renewed interest in NZ skins and Kastro wants to be on the leading edge, sourcing from firms with consolidated meat-packing and butchering skills, not just tanneries. He acknowledges the enormous marketing challenge and is working aggressively to broker new Turkish customers who want these high quality items. 'Once we had 200 or 300 containers per year of New Zealand skins', Kastro recalls. Few expect much buoyancy in a cash-strapped market. Leather profits, already squeezed in Türkiye, are nowadays almost extinct. Kastro further added: 'My son is a doctor. My other son is an IT professional. Neither anticipates a future in continuing the family leather business.'

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