The leather industry, a cornerstone of global fashion and manufacturing, is no stranger to the profound impacts of geopolitical tensions and armed conflicts. As interstate armed conflicts escalate in various regions, the repercussions for the leather sector are far-reaching. From disrupted supply chains and increased operational costs to shifts in market dynamics and regulatory pressures, businesses in this industry must navigate a complex landscape. This article delves into the multifaceted impact of interstate armed conflicts on the leather industry, highlighting key challenges and exploring strategies for resilience and growth.

The leather industry: an overview

Global Significance and Market Dynamics

The leather industry encompasses a wide range of products, including footwear, garments, accessories, and upholstery. It is a significant contributor to the global economy, with major production hubs in countries like Italy, China, India, and Brazil. The industry’s value chain is extensive, involving livestock farming, rawhide procurement, tanning processes, and manufacturing of finished goods. This complex supply chain makes the industry particularly vulnerable to disruptions caused by armed conflicts.

Key Players and Production Hubs

Leading countries in leather production include:

  • Italy: Renowned for high-quality leather goods, particularly in fashion and luxury sectors.
  • China: Dominates the market in terms of volume, producing a wide range of leather products.
  • India: A major exporter of leather and leather goods, with a strong focus on craftsmanship.
  • Brazil: Significant in the production of raw hides and semi-finished leather.

These countries’ dominance underscores the global interconnectedness of the leather supply chain, amplifying the impact of regional conflicts.

Impact of interstate armed conflicts on the leather industry

Disruption of Supply Chains

Armed conflicts can severely disrupt supply chains, particularly in regions critical for raw material sourcing and manufacturing. For instance:

  • Raw Material Shortages: Conflicts in regions producing livestock can lead to shortages in raw hides. For example, tensions in the Middle East, a key region for livestock, have disrupted the supply of raw hides to tanneries.
  • Transport and Logistics: War zones and conflict areas often face damaged infrastructure and restricted movement, delaying shipments and increasing transportation costs. The Ukraine conflict, for instance, has had ripple effects on transportation routes across Europe.

Increased Operational Costs

  • Security and Insurance: Companies operating in or near conflict zones face higher security and insurance costs. Ensuring the safety of employees and protecting assets become significant financial burdens.
  • Energy Prices: Armed conflicts, particularly in oil-producing regions, can lead to spikes in energy prices, increasing production costs for tanneries and manufacturing plants that rely on energy-intensive processes.

Market Dynamics and Consumer Behaviour

  • Demand Fluctuations: Conflicts can lead to economic instability, reducing consumer purchasing power and altering demand for leather products. The ongoing conflict in Syria, for instance, has diminished the purchasing power in surrounding regions.
  • Shifts in Market Preferences: Consumers may shift preferences towards more affordable or alternative materials during times of economic uncertainty caused by conflicts.

Regulatory and Compliance Challenges

  • Sanctions and Trade Restrictions: International sanctions imposed on conflict-ridden countries can hinder trade. For example, sanctions on Russia have affected its leather export markets, compelling companies to seek alternative suppliers.
  • Ethical Sourcing and Compliance: There is increasing pressure on companies to ensure ethical sourcing. Conflict zones often raise concerns about human rights violations and environmental sustainability, compelling businesses to adopt stricter compliance measures.

Strategies for resilience and growth

Diversifying Supply Chains

  • Alternative Sourcing: Businesses can mitigate risks by diversifying their sources of raw materials and finished products. Identifying alternative suppliers in stable regions can ensure continuity in operations.
  • Localisation: Investing in local production capabilities can reduce dependence on volatile regions. For example, European companies have been exploring local leather production to minimise reliance on imports from conflict-prone areas.

Technological Innovations

  • Supply Chain Management Systems: Implementing advanced supply chain management technologies can enhance transparency and efficiency, helping companies respond swiftly to disruptions.
  • Sustainable Practices: Adopting sustainable practices not only meets regulatory requirements but also appeals to ethically conscious consumers. Innovations in eco-friendly tanning processes and biodegradable materials are gaining traction.

Strategic Partnerships

  • Collaborative Networks: Forming alliances with other industry players can strengthen supply chain resilience. Collaborative networks can pool resources and share risk mitigation strategies.
  • Engagement with NGOs and Governments: Partnering with non-governmental organisations and governments can help address regulatory challenges and promote ethical sourcing practices.

Risk Management and Contingency Planning

  • Risk Assessment: Regular risk assessments can identify potential vulnerabilities in supply chains. Companies should continuously monitor geopolitical developments and assess their impact on operations.
  • Contingency Plans: Developing and maintaining robust contingency plans ensures preparedness for sudden disruptions. These plans should include alternative logistics arrangements and communication protocols.

Consumer Engagement and Market Adaptation

  • Market Research: Understanding shifts in consumer behaviour during conflicts can inform product development and marketing strategies. Adapting to changing preferences can sustain demand.
  • Brand Loyalty and Trust: Maintaining transparency and ethical practices builds consumer trust. Brands that demonstrate social responsibility can foster loyalty even during challenging times.

Case studies: navigating conflicts in the leather industry

The Impact of the Russia-Ukraine Conflict

The Russia-Ukraine conflict has had profound effects on the leather industry. With Ukraine being a significant supplier of raw hides, the conflict disrupted supplies and led to increased prices. European leather manufacturers had to swiftly adapt by sourcing from alternative markets and investing in local production capabilities. Additionally, sanctions on Russia affected its leather export markets, pushing Russian companies to seek new trade partnerships.

The Middle East and North Africa (MENA) Region

Conflicts in the MENA region have historically impacted the leather industry, given its role as a key livestock producer. The Arab Spring, for instance, caused significant disruptions in North African countries, affecting the supply of raw hides. Companies had to navigate political instability and develop contingency plans to mitigate supply chain risks. Diversifying suppliers and engaging in local capacity-building initiatives were crucial strategies adopted by businesses.

The Syrian Civil War

The ongoing Syrian civil war has had severe economic consequences, reducing the purchasing power in the region and altering market dynamics. Leather manufacturers targeting Middle Eastern markets faced declining demand and had to pivot to other regions. The conflict also highlighted the importance of ethical sourcing, with increased scrutiny on supply chains to ensure compliance with human rights and environmental standards.


Interstate armed conflicts pose significant challenges to the leather industry, disrupting supply chains, increasing operational costs, and altering market dynamics. However, by adopting strategic measures such as diversifying supply chains, leveraging technological innovations, forming strategic partnerships, and maintaining robust risk management practices, businesses can navigate these challenges and emerge resilient. The ability to adapt to geopolitical changes and maintain ethical and sustainable practices will be key to sustaining growth and securing a competitive edge in the global leather market.

As the industry continues to evolve, staying informed about geopolitical developments and proactively addressing potential risks will be essential for success. By fostering collaboration, investing in innovation, and prioritising sustainability, the leather industry can not only survive but thrive amidst the complexities of the modern world.