Low costs in inland provinces attracts leather processors

22 Aug '09

1 min read

Chinese leather and footwear processing industries are moving out in large number from the coastal belt provinces of Zhejiang and Guangdong to inland regions in a bid to lower costs arising from environmental concerns and other costs.

Labour costs are increasing with each passing day and to add to these are the investments to be made in keeping up with the environmental policies, which are adding to the costs of the leather and footwear manufacturers, making their operations unviable.

Provinces like Chongqing and Fuxin, with support from the local government are setting up industrial zones with comparatively cheaper land prices, laborers, raw materials, water and electricity and modern sewage treatment systems.

Leather manufacturers are finding these very attractive, especially at a time when order levels are falling and overseas buyers are looking for lower prices, which ultimately also leads to a decline in margins.

Exports and imports from the sector have fallen by 10.8 percent and 17.7 percent, respectively in June 2009, but there is optimism over the fact that the negative growth in exports is falling with each passing month.

Fibre2fashion News Desk - India

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