Among the top ten foreign exchange earners for the country, the Indian leather, leather products and footwear industry has been identified as one among the 12 Focus Sectors by the Indian government to help the country emerge as a global supplier by tapping into its inherent strengths. However, leather players, mostly small or medium scale enterprises, continue to be besieged by a host of issues. A SWOT analysis.
- The Indian leather, leather products and footwear industry is among the top ten foreign exchange earners for India.
- India is the second largest exporter of leather garments, third largest exporter of saddlery & harness, and fourth largest exporter of leather goods in the world.
- An employment intensive sector, the leather industry provides jobs to about 4.42 million people, mostly from weaker sections of the society, 30% being women.
The Indian leather, leather products and footwear industry occupies a prominent place in the Indian economy. This sector is known for its consistency in high export earnings and is among the top ten foreign exchange earners for the country. Although identified as one among the 12 Focus Sectors by the Indian government to help the country emerge as a global supplier by tapping into its inherent strengths, leather players, mostly small or medium scale enterprises, continue to be besieged by a host of issues. Let’s first take a look at the strengths:
- The export of footwear, leather and leather products from India was to the tune of US $3.68 billion during 2020-21. India is the second largest producer of footwear in the world, next only to China.
- The industry is rich in raw materials as the country is endowed with 20% of world cattle and buffalo and 11% of goat & sheep population. Added to this are the strengths of skilled manpower, innovative technology, increasing industry compliance to international environmental standards, and dedicated support of allied industries.
- The leather industry is an employment intensive sector, providing jobs to about 4.42 million people, mostly from weaker sections of the society. Women employment is predominant in leather products sector with about 30% share.
- India is the second largest exporter of leather garments, third largest exporter of saddlery & harness and fourth largest exporter of leather goods in the world,
Firstly, it is important to understand why leather presents such a complex situation for sustainability programmes. Essentially, this is due to its highly fragmented and complex supply chain. Leather production starts in farms, where cattle are raised and slaughtered. The hides are sold to tanneries, which can be located across the world. Tanneries process the hides into what we call leather, which is sold to manufacturers to be turned into a huge variety of end products, from shoes and jackets, to car seats and bags. At every stage a huge number of employees and private sector entities are involved, including farmers, leather traders, wholesalers and retailers, high fashion brands, SMEs and more.
Throughout this process, leather often travels around the world, from Africa to India and then to Europe or America. It is not just an international chain, but a global network. A testament to this is the fact that a large number of the world’s tanneries are located in the global south, including India and Bangladesh, far away from where most profit on these products is made, namely in high income countries in Europe.
This last point also reinforces the deeper sustainability issues in the leather sector.
The Leather Working Group (LWG) has set a standard and audit system for chemical management in tanneries and now certifies around 20% of global leather production. Increasingly, companies will only buy leather if it is LWG certified. Despite the real value LWG adds to this sector, it is still far from a real supply chain sustainability system. Multi-stakeholder initiatives for sustainability are poorly developed, and sorely needed in the leather sector. Apart from a few larger companies, the leather sector’s presence is poor in initiatives which form a representative action group.
Leather & sustainability
Leather is very much a sustainable material. It is a byproduct of the meat industry and is just 2% of the value of the animal. Since it is a byproduct of the meat industry it does not need additional land or resources.
What gives leather a bad name is the excessive use of chemicals, inability to check and standardise uptakes, value the use of water, no control over discharge of waste water, treated or untreated, lack of control of air quality in the plant and around it leading to foul smell, uncontrolled discharge of solid waste such as fleshing or sludge.
What are the areas in leather which need to be addressed?
- Resource management is key. Power consumption reduction/optimisation, reduction of water consumption, reduction of chemical consumption and optimisation of manpower. This can be achieved by adopting modern machinery, bulk production techniques, modern chemicals and tanning systems. Just to give an example, the use of water during processing used to be 20-30 litres of water per kilogram of hide processed which can be brought down to 6-8 litres.
- Waste water management, both solid, liquid and exhaust management, where a tannery can be designed to ensure there are no solid and liquid discharges. All process water is treated, partially recycled and rest used for horticulture; all solid waste i.e. fleshings, shaving/buffing dust and sludge can be treated biologically to obtain much needed power and hence can in fact looked at being profit centres and no-cost centres. All of this needs initial investments for sure, but can be profit centres going forward.
- Use of solar power can be another way of saving power consumed during production along with power generated by digesting the solid waste and sludge.
- Manpower management, proper training in safety norms from time to time, crèche facility, doctor in attendance on the factory site, addressing health concerns of the people employed — all such steps will reinforce confidence in the working staff. Happy people equals better productivity, ensures greater efficiency, and even low rate of attrition, thus reducing the cost involved in training. It would also be important to make sure that the manpower involved is paid according to the salary norms stipulated.
- Vendor management is critical. Being aware and concerned about the vendors with whom we do business means a more sustainable supply chain. The raw hides and skin suppliers alone can confirm the origin of the material to ensure traceability. Would it therefore be a good idea to take the tanning part of the processing closer to where the animal is slaughtered? It is the chemical suppliers who define what is used for tanning, what were the other processes employed to convert raw hides into desired leather with requisite qualities. (The machinery suppliers who can define and offer the tanneries plant and machineries who can offer us the machines which would use less and less power per sqft of leather produced.)
- Enhance quality and durability of the leather produced for specific end usages so that if desired the lifecycle of such leather can be further increased by allowing repairs of the products. This would delay the leather getting dumped into the recycling plants. Some more work needs to be done so that the finished leather cuttings from shoemaking plants can be biodegraded. About 60% of the leather produced is used in the footwear sector and the ]rest of the product industries left overs. Bio digestion would then yield power and usable manure.
The Indian leather industry is spread across the country and the challenges are different from south to north to east and therefore even defining a standard sustainability practice is not easy. Data collection is scarce and we definitely need to invest in data collection so that a comprehensive solution can be worked out Till then these efforts must continue at the individual level. Complexes in Jalandhar (Punjab), Kanpur (Uttar Pradesh), Kolkata (West Bengal) and elsewhere in the south must invest in horticulture and create profit centres from treated water. This will also help to improve ground water levels and replenishment of the water source.
The market needs to be developed for local brands and it is imperative to educate the local customer about sustainability issues, and how it could impact future generations. The market in India currently is fed products which are unchecked and flout all international norms. The consumers too are not quite aware of sustainability issues. The local brands have only cost in mind and earn excellent profits which are unchecked. All sustainability efforts as discussed not only improve quality and production yields but also would profitably impact bottom lines for the brand and manufacturers involved across the local supply chain, and find a better and bigger market beyond Indian shores.