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Asia may not be immune from a global market slow down but it will likely remain the major market for leather, chemicals and components.
Every day news wires concentrate on the looming recession in the US and Europe. Favorite topics highlighted are soaring food and oil prices, and faltering stock markets. This continuing information "diet" is enough to dishearten even the most optimistic and determined CEO. However, we must also take into account that in the western media not so much attention is paid to the outlook for Asia. CEO's could well benefit by informing themselves regularly on the panorama in the only two countries on the planet with a billion plus population - China and India.
A report published by the BBC on July 4th by the Asian Development Bank stated that "Growth in Asian economies may slow this year, but a recession is unlikely, according to Haruhiko Kuroda, head of the Asian Development Bank." The main concern was inflation, especially in India and China but the governments of these countries had raised interest rates to keep the specter of inflation in check.
Despite punitive import taxes levied by the European Union on leather shoes from China and Vietnam, China still manufactures and exports far more shoes than any other country and will soon be manufacturing almost 8 billion pairs per year of all types of footwear. World production is estimated to reach 15 billion pairs by 2010 with Asia currently manufacturing 76% of all footwear. Chinese tanneries import wet blue and semi finished leather from South America, as well as tannery chemicals from international suppliers to feed the production lines of the Chinese leather industry.
If China is to improve its design and quality then it will be obliged to import high quality leather as well as innovative components to give that "finished touch" to the international brands of footwear the Chinese Leather Industry Association (CLIA) is promoting. To quote Leather International magazine on this point:
"The China Leather Industry Association's (CLIA) Genuine Leather Mark (GLM) office will continue to implement its brand strategy in 2008 in order to boost the sector's image on the international market. Through certification of companies' excellent performance, Genuine Leather Mark and Eco-leather Mark are leading China's leather and leather goods companies on the road to brand development".
This long term development strategy implemented by the CLIA will ensure that western manufacturers of high grade components and tanners of quality leathers will have access to the ongoing demands of the Chinese footwear market. And remember - it's not just a question of footwear since China is also manufacturing vast amounts of vehicle and furniture upholstery as well as leather goods and garments. China imports US$6 billion of leather of all types, components and finished goods and this is where export opportunities are to be found.
The other billion population country in the region, India, is also another prime export market for leather and components as this country continues to invest in and develop its infrastructure to help protect its environment and position itself for future production expansion. India is currently the world's second largest shoe manufacturer after China with a total of around one billion pairs and a production capacity of 1.965 billion pairs according to the Council for Leather Exports (CLE).
Indian leather industry - Estimated Production Capacities
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ITEM |
CAPACITY |
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Hides |
65 million pieces |
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Skins |
170 million pieces |
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Leather Footwear |
909 million pairs |
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Leather Shoe Uppers |
100 million pairs |
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Non-leather Footwear |
1056 million pairs |
|
Leather Garments |
16 million pieces |
|
Leather Goods |
63 million pieces |
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Industrial Gloves |
52 million pairs |
|
Saddlery |
0.10 million pieces |
Source: Council for Leather Exports
Taking into account that the Indian leather sector is growing at a rate of +/-10% per year, this is another market which cannot be overlooked by embattled CEO's. The simple fact that Asia manufactures 76% of all footwear, as stated above, should be a wake up call to companies to adjust their marketing and sales plans and target these enormous markets.
It is not just the fact that China and India export all types of footwear and leather goods but the fact that the internal markets of these two countries will continue to grow and develop economically in the coming decade at the same time as their populations also increases.
Economic development and hence wealth and purchasing power is trickling down to the general population and the increase in oil imports by both countries indicates that they are in the throes of fast track economic development. This will result in internal demand for footwear rising in both countries, even faster than in the US and Europe, and will therefore demand more production of footwear for the local population.
Three trade fairs to enhance your exports
There are now three materials and components fairs organized by APLF in Asia:
· APLF - Material, Manufacturing & Technology (MM&T) in Hong Kong
· All China Leather Exhibition (ACLE) held in Shanghai
· Footwear Materials, Manufacturing & Technology (fMM&T) to be held in Delhi in May 2009
All these trade fairs are strategically located in Asia and are in fact a platform from where you can penetrate not only the Chinese and Indian markets but also APLF - MM&T acts as a platform to penetrate all international markets as the truly global event for the industry..
APLF - MM&T attracts exhibitors from more than 63 countries and regions. The more than 37,000 visitors come from all parts of the world, since APLF is the Meeting Place for the International Leather Industry and in 2009 its 25th anniversary edition will be held.
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If you wish to contribute to the APLF News, with your experiences in the industry, your observations, or general thoughts on the direction the industry is going, we would like to hear from you. Email: aplf-news@aplf.com |
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How long has your company been attending APLF? If you wish to be involved in the celebration of the 25th anniversary of APLF, we would like to hear from you. Email: aplf-news@aplf.com. Subject Headline: APLF 25th Anniversary | | 
