indiamarkets: Could you give us some specifics?

AF: I have an Indian supplier whose product thickness was not acceptable to us. And we had to go in for further splitting of the leather imported from him, in order to bring it to acceptable thickness. After we conveyed this to him, he has bought Italian splitting machines that do the job so well, that his costs are reduced. We are happy that he has thought of the importance of building a long-term relationship with us and made this investment, instead of finding a new buyer who will initially accept his low quality product. Not only has the further cost we incur on purchases gone down, the supplier is now making international quality leather which other international buyers will be interested in, too.

indiamarkets: What are the problems you encounter in your trade with Indian suppliers?

AF: Quality of cow-hides from India is poor. There are scratches, too many breaks and too much grain. Here the animals are left in the wild, free. This is an important reason for poor quality leather. Also, Indian cow-hides are of poorer quality and they are of very small size as the average size of the animal is quite small by international standards. But the quality of buffalo hide is much better as compared to Indian cow-hides. Even buffalo hides are of a maximum size of 35 sq feet whereas our requirement is of 40 sq feet per hide. 

indiamarkets: Could you enlighten us about the international leather industry scenario?

AF: Prices have been escalating incessantly in the last six to eight months. At this rate, most of the leather products will become unaffordable to the majority of the present consumers. There is a possibility of everyone turning back to synthetics again and this is not good for anyone in the industry. Obviously, this increase is mainly to the shortage of hides in our countries. So, European factories have come to accept lower quality raw material as we are working at 50 per cent capacity due to lack of raw material. There is a crisis there. 

We have invested heavily last year to increase our capacity to this 2300 hides per day. We had imported 4 containers of buffalo hide valued at $280,000 per month throughout 2000. This was based on the continuous growth in the US market for upholstery and we were running at 80 percent capacity for the whole of2000. Now there’s a slow down in the US economy and consequently, our imports are also down. As part of our damage control measure, we are looking at cheaper sources of supply and new markets for our products. 

indiamarkets: What are the big markets for your products? Where does India figure in your list of trading partners?

AF: Our big market for upholstery is South America while it is Russia/Moscow for shoe uppers. Now we are importing Russian wet blue for shoe uppers. Presently, India is among the major suppliers of raw materials. In a couple of years, we hope to be able to export leather for upholstery to India. The concept of leather upholstery for homes and offices is slowly catching on in India. India has just started buying finished leather for upholstery. We expect the quantities to go up in the near future as making finished leather for upholstery is a very capital intensive business which many Indian companies cannot afford now. The machinery and equipment is bigger and much more expensive as compared to that of shoe uppers. 

indiamarkets: What are your views of pollution control? Do you use vegetable tanning? 

AF: Environmental concern is one thing. But vegetable tanning as a method of controlling pollution is not such a feasible option. Vegetable tanning produces only heavy leather in which the original defects in the hide cannot be properly camouflaged and it is much more expensive. Both for reasons of quality and price, it is not acceptable to the final consumers. My company tackles pollution by an excellent water treatment method that is certified by the Italian Ministry for industry and ENEA, an organisation started for nuclear programmes, which has now turned to pollution control concerns. 

indiamarkets: What is the purpose of this visit and has it been fulfilled?

AF: We, at Conceria are also thinking of making leather for garments. So I shall be bringing my agent who will be an expert in leather for garments, as prices in India are still at affordable levels as compared to international prices. 

This visit can be termed as a monitoring visit. Nothing concrete has yet come out of this. I am still looking for new suppliers for the existing products also. I have a bag full of samples and price lists from various Indian suppliers. I am yet to check on the acceptability of the products and the affordability of the prices quoted.