Lead the way on sustainability

29 April 2019

More than 800 exhibitors showcased their products and services at this year’s APLF Leather & Materials+ fair, which took place on 13–15 March. Sustainability in all its forms was top of the agenda at the Hong Kong Convention and Exhibition Centre.

This year’s edition of APLF took place in the middle of March, as it did last year. It will move back to its traditional slot at the end of March again next year, but the main change for 2020 will be that the entire leather offering will move from the main concourse on the first floor to the third floor.

A lot of the Q&A portion of the kick-off press conference circled around how this change came about and what it will mean for the show going forward. APLF directors Michael Duck and Perrine Ardouin reassured those attending that while it was a two-year decision in the making that they didn’t take lightly, it is the right one, with more floor space and room to grow in the years to come. People will have to get used to going up another two flights of escalators, but besides that, they are certain the positives will outweigh any perceived negatives, such as leather being relegated in favour of other materials, a reaction to current market trends.

It was a brief distraction from the main pillar of this year – sustainability. The topic was robustly covered from many angles, from the Leather Naturally (LN) breakfast forum, which brought together various stakeholders and media representatives, to news of new members and a strong marketing campaign that has already raised $1.5 million. The aim is to develop a means to help get leather on the front foot across the industry in order to meet enduring challenges head on, from protest movements and highly organised pressure groups to the trends and vernacular gaining momentum in synthetics and athleisure.

The increase in 2018 sales revenue generated by leather and footwear companies in China compared with 2017.

Evolving naturally

LN has been growing over the past 10 years, honing its mission, and now seems to be in a position to make a big impact, with new members, vision beyond recruiting within leather, engaging younger generations, and educating consumers about leather.

This way forward was also addressed during talks about the fourth World Leather Congress coming up in July in New York. There, the overall theme will be ‘Leather in Everyday Life’, and while discussions might sound rudimentary to leather veterans, the aim will be to introduce leather to those who might not know how sustainable, dynamic and progressive it is.

Egbert Dikkers, chairman of the LN steering committee, and JBS’s Fernando Bellese, who is also on the committee, spoke passionately about the campaign and the importance of connecting with millennials to help ensure a strong future for leather.

On the subject of the future, on the third floor of the convention centre, Andreas Kindermann, Wollsdorf Leather’s CEO, and the company’s global director of sales, Eduard Katholnig, gave a presentation on smart leather products they are working on to keep pace with trends and technology. Tactile, pressure-sensitive leather will soon be a reality, with circuits only a few microns thick laid on top of the crust beneath layers of finishing that will be pressure-sensitive and able to deliver a broad range of functions and commands, including temperature control, body stats like blood pressure and heart rate, or commands within the car that operate windows, climate or fuel economy – all by simply touching some leather.

These design solutions and applications are the way forward, and Assomac’s Roberto Giuseppe Vago also spoke about the synergy of technologies into sustainable leather treatment processes. His talk about leather 4.0 focused on how the possibilities of leather stem from data transfer and how quickly vast amounts of information can be processed. Of course, any technological progress with leather is synonymous with how sustainable a process is involved in order to get to that point. So Vago also spoke at length about the circular economy and how to better deal with the waste. Luckily, this is a footing better suited to leather than plastics – but there are still standards to uphold.

Back to Africa

Ordinarily the news of yet another leather fair in an already crowded calendar would be met with sighs and slumped shoulders, but the new Pan African Leather Fair, to be held on 19–21 June 2020 in Cairo, Egypt, has the potential to revitalise a very strategic region. Backed by APLF and organised by Informa in Egypt, the exhibition will be the definitive event for the leather industry in the Middle East and Africa, and an opportunity to open up to the entire value chain.

“Egypt is the key industrial hub for the MEA region; its geographic position between Europe, the Middle East and Africa, as well as its advanced transport infrastructure, makes it a natural selection for an event in the region,” commented APLF’s Ardouin. “Egypt is forecast by Standard Chartered to become the seventh-largest global economy by 2030, and its leather industry is matching the pace of industrial development, with Robikki Leather City set to become the sector’s leading cluster in the region.”

The leather industry in Cairo is moving from its traditional city centre location to a purpose-built industrial zone for the whole leather supply chain.

During a talk to promote the event and Egypt’s potential, Yasser El-Maghraby, adviser to the minister of trade and industry of Egypt, and chairman of Cairo for investment and development, the organising body behind Robbiki Leather City, said, “Robbiki is one of the leading leather clusters in Africa and the Middle East, with a total annual tanned leather production at 222 million square feet per annum, with output expected to rise by 40% year-on-year for the foreseeable future.

679 million
Pairs of leather shoes exported from China in 2018, down by 0.5%.

“Robikki will cover the whole value chain, from raw hides to finished products. This new facility is revolutionising leather production in Egypt and across the MEA region, offering opportunities for international companies to sell their products and invest in Egypt.”

Considering the mood and sentiment going into this edition of APLF, in light of a stumbling market, Brexit, and a general ‘wait and see’ approach, tempered expectations were met with impressive foot traffic, and even though discussion and general tyre-kicking superseded inked deals, no one left the fair worse than when they arrived.

Forward thinking

The 22nd edition of the All China Leather Exhibition (ACLE) will take place at the New International Expo Centre in Pudong, Shanghai, on 3–5 September, and as is customary, the event covers the whole supply chain for the leather and footwear manufacturing industries, with a wide array of leathers, components, chemicals and machinery on display. Many of the world’s leading chemical suppliers will be present at ACLE as well, using it as a platform to launch new products and technological developments direct to their target market in China.

The global leather industry has faced a challenging time since last year’s APLF. Raw materials prices continued declining due to high slaughter to satisfy growing red meat demand from consumers in developing countries, especially China. This led to more raw material being available and weighing on the market. For example, 12 months ago benchmark heavy Texas steers fell 40% in value in just one year.

Paradoxically, lower prices have not encouraged increased demand for leather by manufacturers, especially in the footwear sector, and tanneries have complained about lower volumes and prices. The China leather sector has not been immune to these adverse market conditions, with imports of raw hides, crust, semi-finished and finished leather all falling in 2018 by an average of about 9.9%, according to CLIA figures. Also, the continuing boom in sneaker and casual footwear driven by the athleisure fashion and lifestyle shift is still turning the attention of designers and stylists towards synthetics for garments and footwear. As much as can be predicted, these will be the overriding themes at the next ACLE, despite the fact that China’s leading tanneries and footwear factories still manufactured 3.63 billion pairs of leather shoes in 2018.

China’s GDP growth fell by 0.3% in 2018 compared with 2017 and came in at a final figure of 6.6%. Despite consumer confidence remaining high, auto sales declined for the first time in 20 years on a year-on-year basis, but all the same actual passenger car sales were still a touch under 23 million units.

What has tended to put a brake on consumer spending in China has been the ongoing trade war with the US. Retaliatory tariffs have been imposed by both countries during 2018 and there are still negotiations taking place to defuse the tension so that trade can continue unhindered. The threat of 25% tariffs being imposed by the US on 1 March receded while talks were under way, as President Trump showed flexibility and talks appeared to be progressing. Even the IMF lowered its global GDP growth forecast from 3.9% to 3.7% due to the trade war between the US and China as uncertainty was generated in the global economy.

From China’s point of view, the Belt & Road project to boost international trade with Europe via Eurasia continues. As shoe production has continued to move to countries with low labour costs, such as Vietnam, Cambodia, Myanmar and Indonesia, in the past couple of years, China’s trade with the ASEAN nations could become even more important to its leather and footwear industries. However, for the leather sector to recover, a move away from synthetics for footwear manufacturing is needed. With consumers becoming more environmentally aware, and demanding sustainable materials and production in the products they buy, awareness of the dangers posed by petroleumbased materials and fibres could seep into their consciousness, and by extension, influence their purchasing decisions.

It is for this reason that educational programmes on the qualities of leather are vital so that consumers become aware of the beauty, versatility and biodegradability of leather. This is where Leather Naturally is determined to play a significant role in educating consumers about how leather is actually made and where it comes from. 

The state of sustainability in the leather supply chain

Another key event discussed sustainability throughout the supply chain, given leather’s vulnerability to evolving risks. Brands, retailers, manufacturers and tanneries are under increased pressure to deliver a cleaner, more efficient and more sustainable leather industry.

Now in its 15th year, the conference welcomed more than 100 delegates, including some from global brands, retailers and leather manufacturers.

Session one sponsor Silvateam led the first set of presentations, starting with ‘Vegetable tannins: sustainable and healthy’, delivered by Eric Poles, global leather BU sales director. Poles highlighted the production of Silvateam tannins and how they are sustainably sourced with minimal impact on the natural environment. He then went on to illustrate how these sustainably sourced tannins have naturally occurring antibacterial properties that help to eliminate odours.

Carmen Chan, ZDHC board member, delivered her presentation entitled ‘ZDHC programme – How collective action is transforming an industry’. Chan summarised how the ZDHC Foundation is helping to revolutionise the leather sector with support from ZDHC contributors, which include international brands and retailers.

John Moraes, footwear chemical compliance manager at Nike, spoke on behalf of AFIRM Group to present ‘The AFIRM Group: Overview, history and current trends’. Moraes conveyed AFIRM’s main aim, which is the need to provide a more coordinated approach to global RSL management to improve product compliance with differing international regulations, and to reduce risk to consumers and supply chain workers.

Session two sponsor Stahl kicked off the second half of the conference with a presentation from Michael Costello, director of sustainability, on ‘Generation Z views on sustainability and leather: how industry is preparing for the future’. Costello’s presentation examined the views that young consumers hold on leather as a material and how their consumer perceptions are changing the marketplace, and the demands the brands and retailers are now placing on leather manufacturers to accommodate this new generation of consumers.

Discussion panel sponsor JBS Couros gave the final presentation of the day, which framed sustainability topics to be discussed in the panel that followed. Fernando Bellese, marketing & sustainability manager at JBS Couros, presented ‘Kind Leather – A new approach to leather processing’; a new concept, rather than a new product, which focuses on reducing more than 50% of the weight processed after liming, reducing chemical use and other environmental impacts, while producing a high-quality product from the most valuable part of the hide. Fernando conveyed this concept as a way of raising awareness of how JBS Couros is actively demonstrating adherence to sustainability principles, including core consumer values such as animal husbandry and environmental stewardship.

Delegates then had a chance to participate in the conference discussion panel, which featured thorough leather supply chain representation from JBS Couros, ZDHC, AQM, Nike, Deichmann and Bellroy. There were also several discussions of how brands are using the tools available to them to manage risk of controlled chemistry within their supply chain.

APLF by the numbers

APLF Leather & Materials+ total number of exhibiting companies: 812
Exhibiting area: <25,000m2
23 group pavilions from 19 countries and regions.

Percentage of exhibitors by product sector

Finished leather: 48.7%
Semi-finished leather: 8%
Synthetics: 8%
Tanning and leather finishing machinery: 7.3%
Hides and skins: 7%
Chemicals: 6.4%
Services: 6.1%
Footwear components: 5.7%
Manufacturing supplies: 2.8%

Analysis from USHSLA president Steve Sothmann

As organisers dressed down for the last day and started to pack up their stands, Leather International caught up with USHSLA president Steve Sothmann to get some US perspective on market health, the merger with Leather Industries of America (LIA) and progress with campaigning for leather. There is a lot to be optimistic about, even though a lot of good things seem to be happening all at once. We got some insight about where he finds the time.

“The fair has been good for everyone; it has met expectations I’d say,” said Sothmann. “The good thing from what USHSLA members are saying is that products are moving, no problem. The market isn’t moving up or down, it is stable. And when things are moving, people are paying. From their perspective, it could be better, but they are not losing their shirts. Contracts are being adhered to because as long as the market isn’t moving down or up really quickly, then that concern goes away, really.

“For me personally, we have been watching the trade situation, but there is not a lot to do about it, so we have just been monitoring it. Our position is known to the government. We have testified and submitted comments already, so there is not a lot else to be done. At this point, it boils down to what this administration thinks it is going to get out of China. I am sure if talks start going badly, we will have to re-engage and jump back in. But now, everyone is waiting while they have these negotiations. The extension of the deadline from early March is a really good sign, and they filed everything legally to keep it going up to 25%, so they have taken the steps, but they didn’t say when it is coming back into play.

“Also, the merger with the LIA has been going very well; we have put a lot of work into that, and there is still a lot of legal and organisational stuff to get figure out. And then everything related to the promotional campaigns, whether it is Leather Naturally or the one we are going to launch as a result of getting a little extra money out of the government related to the tariffs to do some promotions, so I have to get moving on how to allocate that. We’re working with Leather Naturally already, so we have to make sure that we are not overlapping expenses, and our involvement is funded by the US Government, so it has to have a US brand attached to it, but we are in lockstep with Leather Naturally. And when USHSLA got the funding from the government, LIA supported it, but I was going to be taking over the combined organisation anyway, so they just said they would support decisions made.

“I am also expanding my staff, which is great. I am able to get more representation in various markets, so that helps me a lot to give things to other people. Before the World Leather Congress, we have a joint board of directors meeting in April in Washington, so that is where a lot of decisions are made about what the new organisation is going to look like. The congress will be really good because it is such a different focus to all the other industry seminars. It is so promotion-oriented and outward-facing, so I think it is going to be fun. It is going to be a little more offence now and that is what everyone is starting to think about. Other congresses have been by the industry for the industry, and this is a totally different mindset. Everyone is thinking about what opportunities are there to promote ourselves and let’s utilise them. The industry-specific stuff we can come back and talk about later, but now is the time to be focusing outward. So from that perspective I think there has been a huge shift in people’s thinking, even in the past year or two, and certainly the money we received because of the tariffs has helped.

“I think the market is on course to come back around. You can never predict when you are at the bottom, but it feels like we are close. The only comparable time was the recession and we are below the recession levels right now in terms of markets, so you have to think at some point things will pick up again.”

Leather Naturally has been honing its mission over the past decade.
Lanxess’s Dietrich Tegtmeyer speaking at the opening press conference.
The iconic harbour in Hong Kong, which once again played host to APLF Leather & Materials+.

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