PTA warns of further decline in leather exports

23 May '12

2 min read

Pakistan's leather and leather goods exports, which experienced a 10 percent fall during the current fiscal year that ends on June 30, are likely to plummet further by 10 percent during the first quarter of next fiscal, Pakistan Tanners Association (PTA) South Zone Chairman Khurshid Ahmed has said.

He said Pakistani exporters are unable to compete with the prices quoted by other value-added finished leather manufacturing countries in the region, owing to factors like rise in the cost of raw materials and intensifying energy and water crisis situations in the tannery zone, where several export-oriented tanneries are clustered.

Leather and leather goods industry is a key employment and foreign exchange generating sector in Pakistan. It employs around 300,000 people and the losing of its overseas export orders to other countries is impacting the country's foreign exchange earnings.

Mr. Ahmed said that Pakistan's biggest leather cluster, sector 7-A of Korangi Industrial Area, is enduring severe water crisis, as over the last many years the Karachi Water Supply Board has shelved water supply to this area.

Water is a key input for tanning industry and due to the current crisis tanneries are forced to use sub soil water, which is impacting the quality of leather. Following this, countries like Italy, Spain, China, Korea and Germany, the key importers of leather apparels and shoes, have reduced their sourcing from Pakistan.

Mr. Ahmed forewarned that if smooth supply of water and gas is not restored, it would cause majority of the units in the country's second largest export-oriented value-added industry to relocate to other countries.

He further cautioned that the high export quota of live animals fixed by the Government for the current year would also badly hit the domestic leather industry. Last year too, as the country exported huge quantity of live animals to Iran and Afghanistan under the quota system, it resulted in severe scarcity of basic inputs like hides and skins for domestic leather industry.

This resulted in a surge in prices of hides and skins in domestic market, pushing up the prices of finished products, which resulted in reduced orders with Pakistani leather exporters from their regular overseas buyers.

Moreover, due to high cost of production, the sector's production also experienced a dip, he added.

Fibre2fashion News Desk - India

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