Have we reached the bottom yet?
16 November 2009One thing I can say about a recession is that it generates lots of editorial copy and brings to the surface new and often radical opinions. There seems to be so much going on at the moment from plant closures, job losses, credit issues, dimethyl fumarate and a crisis among hide and skin suppliers following a collapse in prices. All this and more is covered in this month’s edition of the magazine. Firstly, however, I would like to welcome Luiz Bittencourt, president, Center for the Brazilian tanning industry (CICB), as our first official guest columnist. From now on we will be inviting leading tanners, buyers and brands, major industry association and organisations, academic institutions and tannery suppliers to add their personal opinion on a particular hot topic of the moment. We hope that this will stimulate discussion and debate within the industry, which in turn may lead to change and benefit for all.
Since the last edition was published, the 25th edition of the APLF in Hong Kong, Fimec in Brazil and Lineapelle in Italy have all taken place. Following one of the most difficult six to twelve months in modern economic history the mood emanating from each of these important shows seems to suggest that we are close to or are at the bottom of the trough and that the worst may well be behind us. However, it would be daft to suggest that everything is OK. Green shoots? Well maybe, let’s not get too optimistic just yet.
My personal congratulations to the organisers of the APLF in celebrating their 25th anniversary this year (less the SARS outbreak). The show itself may not be as important to many as it once was in the tanning business but it is still probably ‘the’ most international meeting point for our industry, is well organised and attracts high quality visitors. A full report on this and the other shows mentioned can be found in this edition.
Direct business obtained from trade shows might be difficult to quantify or justify for many but there is no doubt that they are the best place to get a feel for the mood of the market and measure business confidence, particularly at this time. In Hong Kong hide and skins dealers were looking to shift stock at knock down prices while a number tanners hesitated to buy until orders came through. I also heard more than one story about problems for some tanners obtaining credit insurance on shipments, particularly for countries perceived as ‘risky’ even if the business in question is not. This is all fallout from the sub-prime fiasco.
Author of theSauerReport and Leather International editorial contributor, Ron Sauer hosted a seminar during this year’s APLF concerning the global implications of the hide and skin trade following the collapse in prices. Sauer, a straight talking former Dutch hide trader, pulled no punches when addressing the seminar which included senior representatives from some leading global organisations and countries. Abstracts of his presentation can be found on page 30. Sauer thinks that the new leading order in the tanning industry, which includes China, India, Brazil and the USA among others, should amend or scrap altogether existing contracts and
create modern alternatives. He even goes one-step further and questions the validity of organisations set-up to provide a uniform voice for our industry. His suggestions may not be to everyone’s agreement but often in difficult times radical solutions are required. Alternative or supportive suggestions and debate are always welcome, just send me an email.
