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Disturbed domestic climate depresses leather sector
21
Jan '10
The disturbed domestic situation is deeply affecting the trade in Pakistan and more so, the leather industry as it is leading to an increase in costs which businesses are not able to pass on to the buyers and in turn to an erosion of profits.

Buyers are no longer traveling to Pakistan, due to a travel advisories issued by their respective countries and instead call the Pakistani leather goods suppliers to other countries, which entails additional cost of travel and hotels.

The biggest impact has been felt in transfer of new technologies. Due to the disturbed situation, leather technicians are shying away from visiting Pakistan. Earlier they used to come and conduct trials and train the local technicians on new technologies.

This has meant that, Pakistani value-added leather goods manufacturers are not able to introduce new products, which is driving business to other countries and there is a sinking feeling that Pakistan could end up as exporter of just raw-hides.

In recent years there has been nil direct foreign investment in the sector, along with which many global retailers have reduced their orders and instead, are diverting their orders to other competitor countries like India, Bangladesh and China.

To make matters worse, the sector has to face the ignominy of frequent and unannounced electricity and gas cuts, which affects production as well as, they are paying higher per unit charges then their counterparts in India, which increases costs of production.

Fibre2fashion News Desk - India

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