LEATHER TANNING INDUSTRY AND ITS...
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CHAPTER III
LEATHER TANNING INDUSTRY AND ITS OPERATIONS
3.1 Introduction
A „Tannery‟ is a work shop where raw hides and skins are converted into
leather by the application of astringent called „tannin‟ or „tannic acid.‟ The process
of tanning has been appropriately referred to a`s a “Series of baths in water
containing certain ingredients.” Large animals are said to have „hides‟ (e.g. cow
hide, buffalo hide) and smaller animals are said to have „skins‟ (e.g. goat skin,
sheep skin) 1.
Tanning is an art by which putrescible animal hides and skins are preserved
from decay and converted into non-perishable substance, known as ‘Leather.‟ Man
has been aware of this art since the dawn of human civilization. Many ancient
civilizations had evolved and perfected this art of making leather. The earliest
records of such ancient civilization, those of Egypt, China and India, establish the
fact that the art was well-known to the ancient people and was widely practiced.
According to historians, the art of the tanning originated before the dawn of
recorded history. Tanning has two types of processes, such as Vegetable Tanning
(where vegetable tanning materials are employed); and Chrome Tanning (where
the basic chromate is used). Earlier, Vegetable Tanning was in operation; but
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today, almost all the tanneries process their leather through Chrome Tanning to
reduce time and to produce quality leather.
The Vegetable Tanning was comparatively harmless. This process is time-
consuming taking 40 - 45 days to change from skin to finished leather. This is also
called „East India Tanning.‟ With the increase in demand for finished leather in
the world market, most of the tanneries have turned to Chrome Tanning, also
called the „Wet-Blue Tanning.‟ In this process, various chemicals, fat liquor oil
and dyes are used. The raw skins and hides are received in the tanneries in wet
salted or dry salted form. The salt (Sodium Chloride) is used as a preservative and
is first removed and then skins and hides are put into various processes, like
Soaking, Liming, Airing, Fleshing and De-liming, followed by washing and
tanning.
Tanning is an integral part of the process of converting raw hides and skins
into finished leather. It involves three types of products, viz. Raw to finish, Raw to
Semi-finish and Semi-finish to Finish. Leather production technology has evolved
from the cottage industry to a fully mechanized industry. The leather and leather
products sector now represents one of the most important industrial sectors in
India, significantly contributing to the national economy2.
3.2 Historical Background of Leather Tanning Industry
In the earlier years, leather industry was a cottage industry which employed
rural labour in the process of tanning raw hides and skins that were available
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locally. The tanning ingredients were lime, tanning bark from shrubs and trees like
Pongam, Avaram, Konnam, Velam, Myrobalans and vegetable oil like pongam
oil. The process of tanning takes 40 - 45 days to convert raw hides into semi-
tanned. The semi-tanned hides were exported to the U.K. and other countries
during the pre-independence periods. The price of semi-tanned hides and skins
were controlled by the British. Hence, the tanners were at the mercy of the foreign
buyers; and the transaction undertaken on contract basis by them with the
foreigners extended to a period of about 3 months.
After Independence, the tanners were allowed free trade and were quoting
their own prices and exporting semi-finished leather to U.K. and other countries at
competitive prices. From 1950s onwards, the tanning process had been shortened
by 3-4 days due to the arrival of tanning chemicals. Gradually, machines were
introduced in tanning and the Government had banned the export of semi-tanned
hides and skins and wanted only finished leather to be exported. This made many
tanneries to shift themselves to tanning finished leather and exporting them. In
places where small tanners could not afford to have huge tanning machines,
Co-operative Industrial Common Finishing Centers were opened to cater to the
needs of small tanners who were engaged in finished leather tanning on job work
basis. Such mechanized units are situated at Erode, Vaniyambadi, Pernambut and
Ranipet.
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Pre-historic people used to live by hunting animals. They felt that some
kind of clothes were necessary to them in order to protect their body from heat,
cold and rain. The pre-historic hunting man utilized the skins of the killed animals
for his clothing. At that time, he might have observed that the raw hides and skins
putrefied, if they were kept wet and dried out. The dried and hard skin was
certainly inconvenient to him to wrap up his body. Thus, it would be only natural
for him to try to soften the fur while drying it. In this attempt, the foundation of
the art of tanning was laid by the pre-historic people in order to render the skin
soft and convenient to wear it. The primitive men might also have noticed that the
skins thus differed from the untreated skins. Hence, greasing and drying consisting
of one among the many ways in which the primitive people tried to safeguard the
animal skins3.
It was in the East that the art of manufacturing leather developed to a
considerable extent in early periods. The Egyptians, the Chinese, the Sumerians,
the Babylonians besides Indians, had attained a high degree of skill and
intelligence in making leather. In a museum in Berlin, there is a stone carving in
which the operation of dressing a tiger‟s skin is depicted. This granite depiction is
estimated to be at least 4,000 years old4.
Leather has also been found on Egyptian mummies. Among the articles
belonging to Egypt and kept in the British museum, one can find a leather apron of
a workman, besides leather shoes of various kinds5.
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Hebrews of the Biblical times used oak bark in tanning and that the
Romans, Greeks and Egyptians used lime to loosen the hair on hides. This process
is used today also in most of the tanneries. In the earlier period, the Egyptians
became familiar and had more knowledge in the manufacture of leather, which
they used as coverings for stools, chairs, bed and cushions.
In India, tanning and leather works have been practised since ancient times.
These occupations were mainly carried out by a different caste called „Chamars.’
The Rig-Veda refers to tanners as „Chamars‟ and the leather from animal skin
were prepared by them. This evidently proves that the Indian tanning industry is as
old as the Rig-Vedic hymns6.
Dressing of skins by the application of fatty and albumin matters like
tallow, oil, egg yolk, curd etc. is practised even today in most of the tanneries.
Furs are dressed more or less in accordance with the above process even today.
The modern chamois leather is the flesh splits of sheep or goat skins tanned by
using colour fish oil7.The preservative properties of wood smoke also seem to
have been noticed in the pre-historic times and these properties were made use of
in making leather. Skins smeared with grease would have been smoked over wood
fire, which helped the fat to penetrate the leather7.
From the use of tree barks, some seeds, herbs, lime and oil to tan skin and
hide, the use of several chemicals can be understood clearly and elaborately. The
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time taken to tan a skin and hide has been shortened. The work done manually for
centuries is being done now with sophisticated machines.
Moreover, the army used the leather for making huge drums, which in
Tamil is called „Murasu.‟ The ancient Tamilians were well-versed in music and
they utilized many musical instruments of drum types for which they used well-
processed and good quality leather8.
The following figure shows the Location of Tanneries in various places of
India along with Boundaries and Rivers:
Figure 3.1
Location of Tanneries in India
Source: http://time.dufe.edu.cn/wencong/clusterstudy/n3edc3069b856c.pdf
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3.3 Status of Leather Industry
Leather tanning is one of the traditional industries in many developing
countries. It is estimated that currently about 15 million tons of hides and skins is
processed annually in the world per year. In a greater part of the developing
countries, the leather industry is distinguished by small units with their distinctive
problems of underutilization of process capacity, seasonal operations and unskilled
workmanship. The manufacture of leather is one of the oldest and predominant
technological professions in India. Man worked with hides and skins to make the
earliest form of clothing. For this purpose, he had to face the challenges of the
destructive forces of nature. With the setting of the European colonies in India,
this industry became more organised, especially to meet the defence requirements
of the British Empire. Till the beginning of the 19th
Century, leather and allied
industries in India formed one of the main activities of the rural sector. The First
and the Second World Wars had provided a big boost to the industry. Now-a-days,
the leather industry is mainly in the hands of small and organised sectors, with the
emphasis of export of finished leather products.
For many years, the leather sector was reserved for small-scale sector in
India. This was done fundamentally to promote the employment opportunities to
the poorer section of the society. A number of policy instruments, such as, tax
exemption, licensing restrictions and reservation policy were used to encourage
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the growth and development of the leather industry in the small-scale as well as
cottage industry sectors9.
The leather sector provides employment for nearly 14 lakhs people in our
country, of which more than 50 per cent are employed in the Cottage and Small-
Scale Industries; and less than one lakh people are employed in the medium-scale
and large-scale sectors, mostly footwear units10
.
In olden days, the Indian Leather Industry remained a rural cottage
industry. The various activities of the leather industries are ranged from carcass
collection, flaying and curing of hides and skins, production of leather and leather
goods etc. The village artisans utilised the raw materials available abundantly in
the local area and produced the leather goods to meet the local demand of the
country11
.
The discovery of chrome tanning process, the availability of raw hides and
skins from the slaughterhouses and the growing demand for leather products
contributed to the growth and development of leather industry in the U.S.A., U.K.,
Germany and Italy. The new technology needed extensive usage of capital
equipments, sophisticated chemicals and skilled labour. Hence, this technology
was not adopted in India. After independence, the policy of the Government
assisted the establishment of more tanneries in the small-scale sector during the
fifties and the sixties. In the seventies, both external factors and domestic
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conditions were perfect for the quick expansion and development of the leather
industries in India12
.
An important happening in the development of the Indian leather industry
was the constitution of the Seetharamiah Committee in 1972 and adoption of its
major recommendations by the Government of India. The Committee noted
favorable internal and external environment for the growth, development and
expansion of the leather industry in India13
.
The availability of cheap labour, availability of good quality of hides and
skins, introduction of chrome tanning process, technical assistance from Central
Leather Research Institute and the policy initiatives taken by the Government
contributed to the extensive growth of the leather industry during the seventies and
the eighties. The leather and leather products sector now represents one of the
most important industrial sectors in India, significantly contributing to the national
economy.
The nineties witnessed predominant changes in the internal and external
environments, which influenced the destiny of Indian Leather Industry. The New
Economic Policy initiated in June 1991 liberalized the industrial sectors for
foreign competition. Establishment of tanneries in India by the foreigners has been
permitted subject to the approval of the Pollution Control Board and the
requirement that they utilise imported hides and skins14
.
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The nineties also witnessed the tightening of enforcement of the law regarding
the environmental protection. Public interest litigation cases in Tamil Nadu,
Utter Pradesh and West Bengal resulted in Court Orders requiring relocation or
closure of tanneries which do not have Individual Effluent Treatment Plant or which
are not the members of the Operational Common Effluent Treatment Plants15
.
The global demand for leather and leather products continues to increase
day by day, because the world leather industry faces insufficient supply of hides
and skins and the demand for leather products goes up, since the global population
and the standard of living of people increase rapidly every year. During the last
20 years, the global leather industry has been witnessing immense changes in its
operation. Two or three decades back, raw hides and skins were imported from the
producing countries for further processing. Now-a-days, the trend is entirely
changed. Leather producing countries wanted to export their products in a more
processing form so that they can get higher yielding value. The strict
environmental regulation in the industrial countries has favoured this trend. So the
countries which were exporting raw hides and skins have now become the big
centers of leather and leather products.
Most of the tanneries in India use old and inefficient technologies and
production methods. Even in large tanneries, the general level of technology is
low. The use of inefficient technology is largely responsible for the wasteful use of
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water and chemicals, high load of effluent pollutants and low productivity of the
tanning industry16
.
In the present scenario, it has been observed that under the Indian
conditions of environmental regulatory compliance, the present pollution load
contribution, cost reflections and profit margins, the minimum processing capacity
for a unit to be able to survive and sustain works out to be about 5 to 10 tons per
day for the raw to semi-finish processing units. Whereas 80% of the industry is
reserved for SMEs in the tanning sector from raw to semi-finished leathers with
processing capacity of less than 1 to 2 tons per day17
.
The Leather industry is bestowed with an affluence of raw materials as
India is endowed with 21% of world cattle & buffalo and 11% of world goat &
sheep population. In India production capacity of hides is 65 million pieces, skin is
170 million pieces, leather goods are 63 million pieces (Source: CLE).
3.4 Growth of Leather Industry in India
Leather industry in India occupies a position of pre-eminence in the world
economy, as it is characterized by its huge possibility for employment, growth,
development and exports. This is evident from the fact that this industry recorded
a growth in output from Rs. 16,700 million in 1984-85 to more than Rs. 73,110
million by the end of VII Five Year Plan18
.
India has 2,091 tanneries as per the Records of the Central Leather
Research Institute, Chennai, of the year 2007, with a total processing capacity of
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7 lakhs tons of hides and skins per year. More than 90 per cent tanneries are small
or medium sized, with processing capacities of less than 2 - 3 tons of hides and
skins per day. Indian tanneries process sheep, goat skin, cow and buffalo hides,
using both vegetable and chrome tanning. As leather processing requires large
quantity of water, most of the tanneries are located near the riverbank. The highest
concentration of tanneries in India is on the banks of the Ganga river system in
North India and the Palar river system in Tamil Nadu19
.
3.5 Revolutionary Change of Leather Industry in India
The leather industry has also passed through revolutionary changes in
India, like other industries. In the historical past, the same individuals carried out
the flaying, tanning and crafting operations. With the interference of other cultures
and the progress of civilization, this activity underwent a segmented orientation.
In the period of Akbar, Kolkata was famous for its crafted leather goods.
Moreover, the British, Dutch and Portuguese travelers visited India in ancient days
for the purpose of capturing and developing their business. They found that the
leather produced by the tanners in the South had good export potential. Through
their organizational skill, talent and intelligence, they assisted in the establishment
of small tanneries for vegetable tanning (which is otherwise called East India
tanning), with the backward linkage of the mundies supplying hides and skins.
This is the foremost important structural change in the leather scenario.
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Among the developing countries, India occupies a predominant place and
role in leather trade. Indian leather industry, which is quite traditional and aged,
flourished during the middle of the 19th
Century, exported a major part of leather
either as raw or semi-processed, from South India, to meet the requirements and
demands of the British Industries. This appeared to be the background for the
concentration of East India tanned leather industrial units in the country.
Moreover, in the pre-independence period, the leather industry was mostly a
small-scale industry with major portions of its products being exported in the form
of raw and semi-processed. The world wars gave the industry a boost and from
thirties onward, more entrepreneurs began entering this field. In the post-
independence era, the leather industry has been maintaining a steady progress. The
world war caused to happen the setting up of organised tanneries more or less on
the western model in Kanpur and Kolkata in the North and Chennai in the South to
meet the requirements of the armies, which led the leather industry to be localized
in the old Madras Presidency comprising of the present Tamil Nadu, part of
Andhra Pradesh, Kolkata and Karnataka. This was another landmark as finished
leather formed the new rank in the structure of the leather industry by the turn of
the country.
The leather industry from its inception is an export-oriented one, for more
than a century and a half. In the early 1940s, the British traders clearly and
skillfully planned, encouraged and developed the production of semi-finished
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leather for the export to their countries for further processing into the required
finished products. During the independence struggle, India was initially exporting
raw hides and skins and the semi-finished leather as East India tanned leather.
Subsequently after independence, wet-blue chrome tanning was introduced and the
aspect of development was quickened after the introduction of Government policy
restricting the export of semi-finished leather and encouraging the export of
finished leather and leather products.
3.6 Leather Production in India
The major production centers for leather and leather products in India are
located in Tamil Nadu - Chennai, Ambur, Ranipet, Vaniyambadi, Trichy, Dindigul;
West Bengal – Kolkata ; Uttar Pradesh – Kanpur, Agra & Noida ; Maharashtra –
Mumbai ; Punjab – Jallandhar ; Karnataka – Bangalore ; Andhra Pradesh - Hyderabad;
Haryana - Ambala, Gurgaon, Panchkula and Karnal; Delhi (Source: CLE).
According to the Reports of the Central Leather Research Institute and the
State Pollution Control Board, Chennai, the number of tanneries situated in India
is given below along with its percentages:
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Table 3.1
State-Wise Distribution of Tanneries in India
Sl.no States Number of Tanneries Percentage Share
1 Tamil Nadu 934 44.67
2 West Bengal 538 25.73
3 Punjab 79 3.78
4 Utter Pradesh 378 18.08
5 Andhra Pradesh 24 1.15
6 Maharashtra 33 1.58
7 Karnataka 16 0.77
8 Bihar 17 0.80
9 Haryana 18 0.86
10 Rajasthan 15 0.72
11 Other States 39 1.86
Total 2,091 100.00
Source: Compiled from the Records of the Central Leather Research Institute,
Chennai, 2007; and State Pollution Control Board, Chennai, 2007.
It is observed from the Table that, out of total tanneries situated in India,
Tamil Nadu accounts for the highest number of tanneries (44.67 per cent); followed
by comes West Bengal (25.73 per cent) and then Utter Pradesh (18.08 per cent).
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Karnataka, Bihar, Haryana and Rajasthan account for only lesser percentage of
tanneries (0.8 per cent each).
Tanneries are spread all over India. According to the Central Leather
Research Institute Report (2007); and the State Pollution Control Board Report
(2007), 2,091 tanneries exist in India. This number does not include unregistered
cottage scale tanneries. It can be noticed that the tanning activities in the states of
Karnataka, Bihar, Haryana and Rajasthan have considerably abated due to
economic and environmental reasons.
3.7 Governmental Policies
a) Policy Support Measures for Tanning/ Finished Leather Segment
Considering the potential offered by the leather industry for growth and
employment generation, the leather sector was recognized as a “Focus Sector” in
the Foreign Trade Policy (FTP) 2009-14 announced on August 23, 2009.
Accordingly, several special focus initiatives were announced for the Leather
Sector in the FTP 2009-14 and also in the Annual Supplement 2010-11 to FTP. As
far as tanning industry is concerned, the following support measures are provided.
Zero Duty Scheme Export Promotion Capital Goods Scheme (EPCG) for
certain sectors (including tanning industry) wherein machinery/capital
goods can be imported without any import duty, subject to fulfilment of
prescribed export obligation. The scheme, which was valid for only two
years upto 31.3.2011, has been extended by one more year till 31.3.2012.
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Kanpur, Dewas, Ambur and Agra have been recognized as “Towns of
Export Excellence” (TOEE) for leather products in FTP. For upgradation of
export sector infrastructure, „Towns of Export Excellence‟ and units located
therein would be granted additional focused support and incentives.
Leather sector has been allowed re-export of unsold imported raw hides and
skins and semi-finished leather from public-bonded warehouses, without
payment of export duty. This will facilitate large-scale import of hides,
skins and semi-finished leathers.
Separate 2% Duty Credit Scrip Scheme for Finished Leather introduced for
exports made from 1.4.2010 onwards. This duty credit scrip can be utilized
for import of inputs, capital goods without any duty.
Machinery and equipment for Effluent Treatment Plants are exempted from
basic customs duty.
Countervailing Duty (CVD) is exempted on raw, tanned and dressed fur
skins falling under Chapter 43 of ITC (HS).
b) Export Policy on Hides, Skins and Leathers
To make the export policy in line with WTO requirements, the export
policy was amended in 2000, by removing any sort of restriction/prohibition on
export of hides, skins and leathers but instead levying export duties on certain
types of hides, skins and leathers. This policy is currently in force. Accordingly,
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60% export duty is levied on export of raw hides and skins and semi-processed
leathers like wet-blue leather, crust leather (which was notified vide Customs
Notification No. 132/2000 dated 17th
October 2000) while there is an export duty
in the range of 15% to 25% on certain types of leathers as notified by Customs
Notification No. 133/2000 dated 17th
October 2000, as amended by Customs
Notification No. 27/2011. However, there is no export duty on leathers namely
Finished leather of goat, sheep and bovine animals and of their young ones
( subject to fulfillment of finished leather norms notified by DGFT in Dec. 2009),
Clothing leather fur suede/ hair, hair-on suede/ shearing suede leathers (as per ISI
norms 8170), Fur leathers, Cuttings and fleshing of hides and skins used as raw
materials for manufacturing animal glue gelatin, Book Binding Leathers, Skiver
Leathers, Fur of domestic animals, excluding lamb fur skin, Shoe upper leathers,
namely (a) Bunwar leather (b) Kattai/ slipper/ sandal leather and (c) Chrome
tanned sole leather.
c) Market Access Initiatives (MAI) Scheme
Market Access Initiatives is an Export Promotion Scheme envisaged to act
as a catalyst to promote India‟s export on a sustained basis. The scheme is
formulated on focus product-focus country approach to evolve specific market and
specific product through market studies/survey.
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d) Marketing Development Assistance Scheme (MDA)
Exporting companies with Freight On Board value of exports from Rs. 3 lakh
and upto Rs.15 crore in the preceding year will be eligible for MDA assistance for
participation in Export Promotion Council (EPC) led trade delegations / BSMs /
Fairs / Exhibitions abroad to explore new markets for export of their specific
product(s) and commodities from India in the initial phase.
e) Integrated Development of Leather Sector (IDLS)
The IDLS Scheme is an investment grant scheme for technology
upgradation, modernization, capacity creation in all segments of the Leather
Industry. The scheme was implemented with effect from Nov 3, 2005. The scheme
provides financial assistance of 30% of the cost of plant and machinery for SSI
units and 20% of the cost of the plant and machinery for Non-SSI units, subject to
a ceiling of Rs.50 lakh in case of both SSI and Non-SSI units. IDLS scheme is
continuing in the XI plan period with certain modifications with effect from 29th
Aug 2008. The scope of the scheme is enhanced to include new units. The
financial assistance has been increased from the ceiling of Rs.50 lakh (30% for
SSI and 20% for Non-SSI units) to Rs. 2 crore @ 20% to all units above the
assistance of Rs.50 lakh.
f) Indian Leather Development Programme (ILDP)
ILDP is implemented during 11th
Five Year Plan (2007-12). The leather
sector employs 2.5 million people with majority from weaker section of the
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society and about 30% women. The sector is dominated by small and medium
enterprises. In order to augment raw material base, enhance capacity, address
environmental concerns, human resource development attract investment and global
marketing of Indian leather, the Central Government approved implementation of the
Indian Leather Development Programme for the 11th
Five Year Plan. Human
resource development mission is proposed to train workers and artisans of
unorganized sector to enable them to adopt modern tools and techniques,
international standards and sizing and hence make them competitive in the
domestic as well as in the international market.
3.8 Foreign Direct Investment in Leather Sector
Foreign direct investment is one of the key factors which will determine the
growth of the leather industry in the country. The Government of India has
already put-in place an industry-friendly Foreign Direct Investment Policy for the
leather sector wherein 100% FDI is permitted under automatic route. The Indian
leather sector has attracted FDI to the tune of Rs.234.68 crore (USD 52.43 million)
during the period 2000-2011. However, with the immense growth prospects for
the industry both in domestic market and in exports, the FDI inflows into the
sector will increase in the coming years.
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3.9 Membership
As per membership records of the Council of Leather Export, 512 units
manufacturing finished leather in India have been registered as members, out of
which 291 units are from Tamil Nadu.
3.10 Employment
Leather sector occupies a very important place in the Indian economy on
account of its substantial export earnings, potential for creation of employment
opportunities and favourable conditions for its sustained growth. There is a large
potential to increase the domestic production and exports, necessitating both the
need for infusion of manpower as well as upgradation of existing employees. It is
estimated that close to 2.5 million people are presently employed both directly and
indirectly in the Leather sector. About 1 million are estimated to be employed in
the organized sector and the rest 1.5 million are in the un-organized product
sector. Among the product sectors, footwear units tend to employ large number of
people as compared to other segments.
3.11 Leather Tanning Industry in Tamilnadu
Traditionally, Tamil Nadu has been the exporter of hides and skins. Before
tanning and finishing facilities were created in this part of the country, Tamil Nadu
used to export salted hides and skins to London market for the purpose of
auctioning there. Even the East India tanned hides were exported to London. The
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demand for leather in our country had been very low. Perhaps in the early years,
religious prohibitions might have stood in the way of large number of people
taking to leather goods. Moreover, the facilities for tanning and fabrication into
products must have been limited whatever may be the reasons. After some period,
there has been an increase in the demand for leather products within the country.
Now-a-days, over 70 per cent of hides and skins available in Tamil Nadu are
exported either in the form of finished leather or leather products to other
countries.
Historically, tanning industry has been found concentrated in the State of
Tamil Nadu. It is reported that tanning has been done in Tamil Nadu for over
200 years. The presence of British traders in large numbers in Madras Presidency
during the British rule could be a strong reason for this development.
Tamil Nadu has a dominant presence and plays a prominent role in the
leather and leather-based industries. The tanning industry in India has a total
installed capacity of an estimated 225 million pieces of hides and skins, of which
Tamil Nadu alone contributes an inspiring 70 per cent of tanned leather in India.
The State accounts for more than 45 per cent of the country‟s export of leather and
leather products. The share of the leather market of Tamil Nadu in the years to
come will continue to be very high.
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Following Figure shows the important places of tanneries in Tamil Nadu:
Figure 3.2
Important Places of Tanneries in Tamil Nadu
Thomas Parry, from England, after a thorough study of the availability of
raw material and labour, established a tannery at Santhome, Madras, in 1805.
His plan was to obtain the raw material available in the local area and turn it into
exportable commodity. He produced so much quality of leather that he was able to
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export to England and America after meeting the local demand. For the first time,
Parry had established a factory where raw material was turned into finished product,
including boots etc. Parry did not go in for the tanning methods which are practised
by the natives, but adopted the method called the „Turkish Method of Tanning.‟20
The other pioneering spirit, which the tanning industry was fortunate to
attract, was Charles De Souze, a French Eurasian. He established a tannery in
1847 in Pondicherry. He introduced the European technique for tanning skin and
hide. The skin so tanned and finished was called „Black Spanish Leather.‟21
One important feature of the tanning industry is that it is dominated by the
small-scale sector. Except for a handful of tanneries numbering more than 50 in
Tamil Nadu, all other tanneries fall in the category of small-scale tanneries.
Secondly, this industry has been found in clusters in different parts of the State.
Another aspect of this industry, peculiar to Tamil Nadu, is that a new practice,
referred to as Job Tanning has become very popular in all tannery clusters,
particularly in Pallavaram, Ranipet, Vaniyambadi and Erode.
Tamil Nadu became the centre of the leather industry after the British
colonized the India. Places like Bengal, remained front rank centers for the
procurement of raw material, but tanning remained out of their reach in spite of
their sincere attempts. Moreover, the climate was not conducive but, the climate
conditions existing in Tamil Nadu, especially in Vellore District, all over the
year, proved fruitful for leather industry. Hence, 80 per cent of total leather
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produced in India, came from Tamil Nadu. In Tamil Nadu, the share of Vellore
District is more than 80 per cent22
.
Tamil Nadu is the home of East India tanning of hides and skins. A large
amount of skilled manpower is put into this process. In 1976, there were only
409 tanning units in Tamil Nadu in the organized and unorganized sectors. Among
them, 251 small-scale tanning units are registered with the Directorate of
Industries, Madras23
.
Though Tamil Nadu is the major leather producing State in India, the
leather industries are not spread all over the State. The tanning units are located
only in a few districts of the State, namely Vellore, Dindigul and Erode. The
tanneries in the Vellore District found in Ranipet, Melvisharam, Ambur,
Vaniyambadi and Pernambut used to process more than 700 tons of leather every day,
accounting for 80 per cent of the leather produced in Tamil Nadu and 40 per cent of
the country.
Tamil Nadu accounts for nearly 70 per cent of the total export of leather and
leather products. Nearly 90 per cent of East India tanned leathers and 50 per cent of
the Wet-Blue leathers are produced in Tamil Nadu. The leather industry is
mainly concentrated in places like Ranipet, Melvisharam, Ambur, Vaniyambadi
and Pernambut (Vellore District), Chromepet, Pallavaram and Madhavaram
(Chennai), Dindigul, Trichy Coimbatore and Erode, all in Tamil Nadu24
.
94
As per the Reports of the Central Leather Research Institute and the State
Pollution Control Board, Chennai, the number of tanneries situated in Tamil Nadu
is given below:
Table 3.2
Tanneries in Tamil Nadu
Sl.no Location Number of Tanneries Percentage Share
1 Chromepet 123 13.17
2 Pallavaram 13 1.39
3 Madhavaram 17 1.82
4 Ambattur 3 0.32
5 Other places in Chennai 15 1.61
6 Melpudupet 19 2.03
7 Dindigul 61 6.53
8 Trichy 36 3.85
9 Erode 41 4.39
10 Coimbatore 3 0.32
11 Ranipet 228 24.41
12 Melvisharam 39 4.18
13 Ambur 83 8.89
14 Vaniyambadi 138 14.78
15 Pernambut 43 4.60
16 Gudiyatham 6 0.64
17 Vellore 11 1.18
18 Other Places in Tamil Nadu 55 5.89
Total 934 100.00
Source: Compiled from the Records of the Central Leather Research Institute, Chennai, 2007; and State
Pollution Control Board, Chennai, 2007.
95
Tamil Nadu accounts for 934 tanneries as per the estimates of the year
2007. Out of these tanneries, 548 tanneries are located in Vellore District which
employ more than 32,500 workers from Ranipet, Melvisharam, Vaniyambadi
Ambur and Pernambut. The exact number of workers cannot be determined, as
majority of the workers are temporary and contract workers. Among the tanneries
in Tamil Nadu, most tanneries are in Vellore District, especially in Ranipet (24.41
per cent); and Vaniyambadi (14.78 per cent) followed by Chromepet at Chennai
3.17 per cent). Ambattur and Coimbatore have the lowest number of tanneries
(0.32 per cent) in Tamil Nadu.
3.12 Leather Tanning Industry in Vellore District
In Vellore District, while Ambur was on the right bank of Palar, Ranipet
was on the left bank of Palar River. Vellore taluk also has the sub-soil river water.
Most of the tanneries are situated near the bank of Palar in Vellore District. The
tanneries have gone down surface wells in the neighbourhood of their tan yards.
A small tannery turning out 1,000 tanned skins per day needs 10,000 litres of
water every day. On the other hand, a large tannery tanning 10,000 skins per day
requires 2,00,000 liters of water per day. However, not only the availability of
water but also the quality of water plays a very important role here. Hence, the
significant factor behind the concentration of tanneries in certain locations in
Vellore District seems to be the quality of Palar River water.
96
The tanneries in Vellore District manufacture wet-blue, chrome and East
India varieties of leather. Most of the productions in the tanneries of Vellore
District are for the purpose of export. Tanning remained as a household industry
till 1840s. The tanneries in Vellore District are located on the banks of the river
Palar in the long stretch from Ranipet to Vaniyambadi.
The tanning process requires sufficient supply of water. In the early part of
1950s, due to the partial failure of monsoon, the water supply was affected and the
tanners had to experience so much of difficulties. As the failure of monsoon
proved to be persisting for a long time, most of the tanners had to move out of the
outskirts of Chennai. Thus, a large number of tanneries were established on the
banks of the river Palar, which contains sub-soil water. Hence, most of the
tanneries were established at Ranipet, Melvisharam, Ambur, Vaniyambadi and
Pernambut in the Vellore District. With the changed concentration of tanneries in
Vellore District, Chennai saved mainly as the outlet for tanned products, more or
less a centre for collecting the leather and its shipment.
The tanneries in Vellore, Ambur, Pernambut, Ranipet and Wallajapet belt
of the Vellore District process more than 700 tons of leather every day, accounting for
80 per cent of the leather produced in Tamil Nadu; and 40 per cent of the country.
They earned more than Rs. 2,000 crore by way of foreign exchange annually25
.
Despite the reason that the tanneries have been brought under the Factories
Act, no tannery has fixed hours of work for the workers. The workers are required
97
to turn up in the early morning between 6.00 a.m. and 8.00 a.m. according to their
convenience and do the work till 1.00 p.m. or 2.00 p.m.
Occasionally, in busy seasons, the workers will work in the afternoon also.
The employers are not at all interested in regulating and fixing the hours of work,
as the workers are paid wages only on the piece-rate system. Moreover, the
absence of regulation provides the workers perfect freedom, which the latter
would be reluctant to give up. On the workers‟ side, opinion is in favour of
regulating the hours of work.
In Vellore District, there is no proper well- built drainages to carry the
effluents out of the tanneries. The effluents stagnate just outside the walls of the
tanneries emitting dirty odour. Within the tanneries, dirt and filth accumulate to a
greater extent. The lime-yard is usually slippery. The sheds, thatched as well as
tiled, are low crouching structures into which none can enter without stooping and
bending; and the workers have to go in and come out of the sheds innumerable
times during their regular work.
The flooring under the sheds are covered with bricks or stone slabs, but
kept in a very bad condition. The open space around and beyond the sheds, are of
loose earth in many tanneries. The most arresting fact of all is the peculiar bad
smell that pervades the whole atmosphere there. Flashings are in certain tanneries
scattered loosely on the ground outside to dry in sunlight. Amenities like canteen
98
and rest room to the workers; crèche and school for the children of workers; social
clubs and provision stores are not properly available in the tanneries26
.
According to workers‟ representatives, the enforcement of various labour
legislations was not effective. Most of the employers engage casual workers and
give breaks in service frequently in order to avoid their obligations under
permanency legislation. Most of the workers are illiterate and they are not aware
of their own rights under different statutes and this abnormal position has been
exploited to benefit the employers. Only the permanent workers in large-scale
tannery units are availing the statutory social security measures available under the
Employees State Insurance or the Employees Provident Fund Schemes. Most of
the factories do not provide lunch room, rest room, toilet facilities etc. to the
workers. So, the workers are required to take their foods and take rest in their
work spots only, which are rather unhygienic.
The workers do not have specified work schedule. Even in the tanneries
which have been registered under the Factories Act, the provisions relating to the
working hours have not been strictly adopted. In the leather industry, certain
processes are continuous; and therefore it is impossible to follow a proper
schedule. Apart from that, the other provisions under the Factories Act relating to
supply of protective clothing, provision of washing facilities etc. have been
implemented to some extent27
.
99
3.12.1 Number of Tanneries in Vellore District:
According to the Reports of the Central Leather Research Institute and the
State Pollution Control Board, Chennai, the number of tanneries situated in
Vellore District is given below:
Table 3.3
Tanneries in Vellore District
Sl.no Places of Location Number of Tanneries Percentage
Share
1 Ranipet 228 41.61
2 Melvisharam 39 7.12
3 Ambur 83 15.15
4 Vaniyambadi 138 25.18
5 Pernambut 43 7.85
6 Gudiyatham 6 1.09
7 Vellore 11 2.00
Total 548 100.00
Source: Compiled from the Records of the Central Leather Research Institute, Chennai, 2007; and State
Pollution Control Board, Chennai, 2007.
It is observed that Ranipet is having more tanneries (41.61 per cent) in Vellore
District, compared to other places; Vaniyambadi comes next (25.18 per cent). In
Gudiyatham and Vellore, the numbers of tanneries are very low (1.09 per cent and
2 per cent respectively).
100
During 2007, as far as tanneries in India is concerned, the importance of
Tamil Nadu can well be perceived when one recalls that out of 2,091 tanneries in
the country, 934 are located in Tamil Nadu, which is 44.67 per cent. Within Tamil
Nadu, 58.67 per cent of the tanneries are located in Vellore District.28
The Tanneries situated in different parts of Vellore District is depicted in
the following figure:
Figure 3.3
Tanneries Situated in Different Parts of Vellore district
Source: http://time.dufe.edu.cn/wencong/clusterstudy/n3edc3069b856c.pdf
101
3.12.2 Reasons for the Growth of Tanneries in Vellore District:
Tamil Nadu leather is of superior quality and rich in global markets. In
Tamil Nadu, tanneries are mostly concentrated in Vellore District. Major reasons
attributed to this situation are availability of natural tanning materials from the
forest of Javadu and Chittoor, sunny climate prevailing throughout the year is
conducive for drying, presence of Palar River to meet water intensive tanning
processes. The tanning centres are well connected with both surface transport and
communication link. The port city of Chennai is just 200 kilometres away.
Besides, the Central Leather Research Institute, Chennai, provides technical
assistance to young people who work in a tannery. In due course, they could start
their own tannery. The Tamil Nadu Government Tanning Society also helps in the
best possible way for this purpose. Thus, the society has contributed to the growth,
development and improvement of the leather business in this District. Availability
of the excellent quality of raw materials used in the tanning pits are there in
Vellore District. There is availability of good quality water in this District. The
tanned leather has to be dried uniformly before it is exported. This prevents the
formation of fungus on tanned leather. The presence of „uniformly hot climate‟
provides a comparative cost advantage to the tanners, because they do not incur
any expenditure on drying the tanned leather.
102
3.12.3 Pollution Problems in the Tanneries of Vellore District and
Common Effluent Treatment Plants
Pollution from tanneries became a problem when the tanneries switched
over from Vegetable Tanning to the Chrome Tanning from the early seventies. Till
then, tanneries adopted mainly East India Tanning process. Chrome Tanning is
time saving, but the dangerous effluents, especially the hexavalent chromium
destroys land. Chrome Tanning requires a lot of water and yields waste water that
requires treatment29
.
Tannery is a water intensive industry requiring enormous quantities of fresh
water. Every 100 kilo grams of skin tanned use 32,000 litres of fresh water. The
process originally employed for tanning was a harmless vegetable process, which
takes 40 - 45 days to complete. With the increase in demand for finished leather,
since 1970, most of the tanneries switched over to the chrome tanning process
which involves a huge variety of chemicals. The entire water used in the process
of tanning is discharged as waste water mixed with chemicals. Before 1996, this
polluted water from the tanneries in Vellore District was let out to the open
without any treatment. The untreated effluents from tanneries are discharged on
open lands or into the water sources thereby affecting the soil and groundwater as
well as surface water causing serious environmental problems.
While the large-scale and medium-scale tanneries put up Individual
Effluent Treatment Plant, small-scale tanneries often express financial difficulties
103
and lack of space and other constraints to put up the required Effluent Treatment
Plant. As a large number of tanneries are in clusters and also in the small-scale
sector, the Tamil Nadu Pollution Control Board has launched a Massive
programme of motivating these tanneries to set up Common Effluent Treatment
Plants on the Principle of „Polluter Pays‟ by which the beneficiary units
themselves have to accept the full responsibility for setting up, operate and
maintain the treatment facilities. Tamil Nadu Pollution Control Board helps the
tanneries in the mobilisation of financial resources, acquisition of land and
technical scrutiny of the proposals for the Common Effluent Treatment Plants.
Subsequently, with the help of Government of India, the Tanners‟ Association in
Ranipet, Melvisharam, Ambur, Vaniyambadi and Pernambut established Common
Effluent Treatment Plants to reduce the pollution caused by tanneries.
3.13 Leather Tanning Operations
Leather production consists of three main processes. These are:
3.13.1 Beam house: Beam house process in which salt, dirt and hair are removed.
The process involves desalting and soaking the hides to remove salt (which is used
to preserve skins). The process uses a large amount of water (up to 20 cubic meter
water per ton of hide. The most significant pollutants produced by the soaking
process include salt, hide surface impurities, dirt and globular protein substances
dissolved in water. Conventionally, unharing is done by treating soaked hides in a
bath containing sodium sulphide/hydrosulphide and lime. The effluent from this
104
process is the most polluted effluent of the tanning process. The pollutants include
suspended solids, sulphides and nitrogenous material. In this, pelt is processed in a
bath of ammonium salt and proteolytic enzymes. The pollutants from the process
include calcium salts, sulphide residues, degraded proteins and residual proteolytic
enzymatic agents.
3.13.2 Tanning: Tanning under which the hide is treated with chemicals to
produce leather. Chrome is the most common tanning agent used in the world.
Conventionally, chrome tanning consists of pickling, tanning and basifying. The
main pollutants of the tanning process are: chrome, chlorides and sulphates.
3.13.3 Post tanning (wet finishing), which includes neutralization, retanning,
dying and fat liquoring. The pollutants from the process include chrome, salt,
dyestuff residues, fat liquoring agents and vegetable tannins.
3.13.4 Finishing is where the leather is given desired properties. The main
pollutants produced during finishing are suspended solids and chrome.
The inflow – outflow diagram for the leather processing is illustrated in
figure 3.5. In addition to the above mentioned pollutants, which are discharged
with the effluent, leather production also produces emissions. These include:
ammoia during deliming and unhairing; sulphide during liming; chrome during
chromate reduction and from the buffing process. Also, alkaline sulphide may be
converted to hydrogen sulphide if the pH is less than 8.0.
105
Figure 3.4
Leather Tanning Process
Source: www.fao.org/WAIRDOCS/LEAD/X6114E/x6114e05.htm
India has enjoyed strength of raw materials, great knowledge and skill and
new approach to technology to come out a major global player in the leather industry.
The entry of the Indian Leather sector into the new millennium begins with the hope
and resolves to add to the unit value realization through additions of technologies,
better practices in production system and improved management techniques30
.
106
Considering the growth potential, the Government of India has identified
leather sector as one of the core sectors for overall development; and has been
implementing various schemes and measures for both the individual exporters of
leather and leather products.
The leather industry ranks eighth in the export trade in terms of foreign
exchange earnings of the country. India accounts for a share of 2.56 per cent in the
global leather trade. The export of leather and leather products have been on the
increasing growth trend and stood at 2.98 billion US dollars in 2006-07, thereby
registering a growth rate of 8.33 per cent over the previous year. The value added
finished products presently constitute around 80 per cent of the total exports of the
country, which was mere 7 per cent in 1956-5731
.
India has the largest livestock population accounting for about 21 per cent
of the world population. The leather industry generates a gross income of
Rs. 25,000 crore every year, of which goods worth about Rs. 10,000 crore are
exported. Leather industry has to increase its capacity, reduce the cost of
manufacturing, develop high quality brands and carry out niche marketing for its
survival32
.
3.14 Export Performance of Leather and Leather Products
Leather was one of the items of exports even in the pre-independence
period. The exports increased over the period of time. Now-a-days, leather and
leather goods fetch substantial amount of foreign exchange. The semi-finished
107
leathers were permitted to be exported till 1990-91. After that, the Government
had completely banned the exports of semi-finished leather. The basic reason is
that the value of leather in semi-finished form is very low compared to the finished
leather and leather goods. So, the Government had taken steps to bring down the
exports of semi-finished leather. The exports of semi-finished leather came down
from Rs. 1,373 million in 1976-77 to Rs. 123.67 million in 1990-91. But all other
components of leather exports showed a remarkable increase.
A large proportion of India‟s leather and leather products are exported to
four countries, namely USA, Germany, UK and Italy. Other major importers of
Indian leather products are Spain, Hong Kong and France. These countries
together accounted for more than 62 per cent of the total exports of leather. Apart
from focussing on these countries, efforts should be made to identify new markets
in the globe.
The composition of export of leather and leather products from India has
undergone a structural change during the last three decades, from merely an
exporter of raw material in the sixties to that of value added products in the
nineties. The value added finished products presently constitute around 80 per cent
of the total exports, which was mere 7 per cent in 1956-57.
Until the end of 1960s, the production of leather products, such as, leather
footwear, garments, bags, belts, gloves etc. were largely made in the advanced
countries, like, USA, UK, Germany, France, Italy etc. Many of these countries, in
108
those years, used to import semi-processed leather from developing countries, like
India, which did not have much use of leather. The 1970s witnessed the first
migration of such industries from the USA and some Western Countries. In spite
of global recession, especially in the established markets like Europe and USA
since the last 5 years, the Indian leather industry has been able to enhance its
leather exports. The Indian leather industry has earned a special status in the
national economy as the 4th
largest foreign exchange earner with a share of around
7 per cent in the total country‟s exports.
European countries and USA mainly dominate the market for leather and
leather products. The major suppliers of leather and leather products are China,
Italy, South Korea, Taiwan, India, Hong Kong and Brazil. Among the competitors
of supplier of leather and leather products, China has developed rapidly and it is
now the 5th
biggest economy in the globe.
The major overseas leather fairs for finished leather which provide
immense scope for marketing and meeting buyers are All China Leather
Exhibition, India International Leather Fair, Asia Pacific Leather Fair, and
Lineapelle.
3.14.1 Exports of Leather and Leather Products:
The data regarding the exports of leather and leather products for five years
from 2006-07 to 2010-2011 are given in the following Table:
109
Table 3.4
India’s Product-wise Export Performance during 2006-07 to 2010-2011
(Value in Million Indian Rupee)
Category Apr-Mar Apr-Mar Apr-Mar Apr-Mar Apr–Mar
2006-07 2007-08 2008-09 2009-10 2010-11
Finished leather 32760.69 30877.20 30970.73 29677.49 36947.62
Leather footwear 44087.76 46856.08 57237.67 59511.52 66540.76
Footwear
components 9947.84 10713.89 11330.34 9921.86 9797.39
Leather garments 14023.29 13849.39 19601.16 20330.45 18262.82
Leather goods 31958.86 31602.54 40172.55 35867.98 37129.63
Saddlery and
harness 3725.32 4260.16 4238.48 3956.19 3925.11
Non-leather
footwear 1934.08 1848.07 2000.34 2087.90 2578.58
Total 138437.84 140007.33 165551.27 161353.39 175181.91
Source : CLE
It is observed from the above table that the export of Finished Leather was
32760.69 million Indian Rupees in 2006-07. It has decreased every year up to
2009-2010. It is 36947.62 million Indian Rupees in 2010-2011, registering a
growth rate of 24.02 percent against the previous year 2009-2010.
110
The export of Leather Footwear is increasing every year from 2006-2007
up to 2010-11. The export has increased from 44087.76 million Indian Rupees in
2006-2007 to 66540.76 million Indian Rupees in 2010-11.
While analyzing Footwear Components, it is ascertained that the export is
increased from 2006-07 to 2008-09 and the export value increased from 9947.84
million Indian Rupees to 11330.34 million Indian Rupees. The export has declined
from 9, 92,186 million Indian Rupees in 2008-2010 to 9797.39 million Indian
Rupees in 2010-11.
There are also ups and downs in export value in the case of Leather
Garments in the five years from 2006-07 to 2010-11. The export has declined from
14023.29 million Indian Rupees in 2006-07 to 13849.39 million Indian Rupees in
2007-08 and again increased to 20330.45 million Indian Rupees in 2008-09 and
then decreased to 18262.82 million Indian Rupees in the year 2010-2011.
There is an increasing trend in the case of export value of Leather Goods
from 2006-07, except in 2007-08 in which they are slightly declining in export
value. The export has increased from 31958.86 million Indian Rupees in 2006-07
to 37129.63 million Indian Rupees in 2010-11.
In the case of Saddlery and Harness, there has been an upward and
downward trend in the export value over five years. The export has increased from
3725.32 million Indian Rupees in 2006-07 to 4238.48 million Indian Rupees in
2008-09 and then decreased to 3925.11 million Indian Rupees in the year 2010-11.
111
There is an increasing trend in the case of export value of Non-Leather
Footwear. This export together has increased from 1848.07 million Indian Rupees
in 2007-08 to 2578.58 million Indian Rupees in the year 2010-2011.
The overall export has increased from 138437.84 million Indian Rupees in
2006-2007 to 175181.91 million Indian Rupees in 2010-2011, though there are
ups and downs in the export value. It is concluded that the export value is
enhancing year after year and it must be retained in future also33
.
3.14.1 Current Export Performance Trends
As per officially notified DGCI& S monthly export data, the export of leather
and leather products for the period April-July 2011 touched US$ 1619.74 mn as
against the export of US$ 1216.74 mn in the corresponding period last year,
registering a positive growth of 33.12%. In rupee terms, the export touched
Rs.72299.18 million during April-July 2011 as against the previous year‟s
performance of Rs.55883.52 million registering a positive growth of 29.37%.
However, as per the statistics compiled by the Council on the basis of monthly
Customs Data and export returns of members, the export of leather and leather
products during April – September 2011 reached a value of Rs.80,638.39 million
as against the value of Rs.77838.74 million during April – September 2010
showing a growth of 3.60%. In Dollar Terms, the export of leather and leather
products during April–September 2011 reached a value of Rs.1772.27 million as
112
against the value of US $ 1690 million during April – September 2010, showing a
growth of 4.87%.
Thus, as per latest export trends, the export growth has come down. This may
be due to the adverse impact of the current recessionary trends prevailing in
Europe, which is the major market for Indian leather sector accounting for about
67% exports. In view of this, the export growth during the second half of this year
may come down.
3.14.2 Major Importing Countries of Indian Finished Leather:
The Major markets for Indian Finished Leather are Germany with a share
of 3.52%, Italy 12.00%, Hong Kong 37.55%, Spain 2.99%, China 7.34% and
Korea Rep 4.42%. (Source: DGCI& S).
The Country-wise Export performance of Finished Leather for the last five
years from 2005-06 to 2009-10 is given in the following Table:
113
Table 3.5
India’s Country-Wise Export of Finished Leather during 2005-06 to 2009-10
(Value in Million US$)
Source: www.indianshoefederation.in/ao2011/download/ao2_newsletter.pdf
From the above Table, it is ascertained that among the countries which
import finished leather, Hong Kong stands the first; next comes Italy. China
occupies the third position. Germany occupies the fourth respectively. UK has the
last position. Except Russia and Korea Rep export trend of India to other countries
shows an increasing trend for the past five years.
114
Major markets for Indian Finished Leather are Germany, USA, Italy,
France, Hong Kong, Spain, Russia, Netherlands, South Africa, Portugal, China,
Indonesia and Korea Rep. These 13 countries account for a share of about 75% in
India‟s total finished leather export of US$ 625.54 million. The tanning industry is
well supported by the presence of chemicals and auxiliaries industry. Indian
finished leather finds the pride of place in the global fashion markets, and is a
much sought after raw material for premium leather product brands.
India has amongst the largest livestock population in the world, providing a
strong raw material base in goat, buffalo, cow and sheep leather. In terms of raw
material availability in pieces, India is endowed with 12.55% of Bovine hides &
skins, 12.29% of goat and kid skins, and 3.48% of Sheep and Lamb skins in the
world. The range of finished leathers include classic finishes (polish, glazed,
aniline, patent), matt surfaces (suedes, nubuck), nappa, burnished & oily leathers,
crackled & distressed finishes etc . Amongst the major producers of finished
leather in the world, the Indian Leather Industry has a long tradition of supplying
high quality leather for the global market.
The global import of finished leather increased from US$ 19784.34 million
in 2004 to US$ 20631.73 million in 2008, growing at a CAGR of 1.05%. India‟s
share has increased from 3.07% to 3.26% during the said period.
115
Table 3.6
Global Import of Finished Leather, India’s Export and Share 2005-2009
(In Million US$)
2004 2005 2006 2007 2008
Global import 19784.34 19893.53 21700.85 23151.85 20631.73
India's export 607.73 636.27 724.00 807.19 673.37
% Share of India 3.07% 3.20% 3.34% 3.49% 3.26%
Source: ITC, Geneva & DGCI & S, Kolkata
It is estimated that about 70 per cent of the total exports of leather and
leather products are from Tamil Nadu. The availability of huge livestock
population, the growing demand for leather and leather products at the
international market, cheap man power and the foreign exchange earned from the
leather products have attracted many entrepreneurs to establish leather industry in
Tamil Nadu, particularly in Vellore District.
Tamil Nadu continued to export salted hides and skins even after
independence but sometime during the 1950s, the Government restricted the
export of salted hides and skins and completely banned its export in 1973. The ban
on export of semi-finished leather was abolished in February 2000. As a
consequence, the exporter can export semi-finished leather subject to the payment
of 15 per cent export duty.
116
The leather industry in Tamil Nadu is not a newcomer in the field of
industrialization. In fact, it is one of the oldest exporting industries in Tamil Nadu.
No other industry with the exception of handloom fabrics is as old as the leather
industry in Tamil Nadu. As per records, the first tannery was set up in Santhome
in1805 by M/S Parry &Co. (Thomas Parry) from England and the products of this
tannery were exported to UK and USA on consignment basis, since that time the
industry has not looked back. The leather industry is built upon export markets.
Therefore, it plays a dual role of not only being an integral part of the industrial
map of the Tamil Nadu, but also an earner of considerable amount of foreign
exchange for the country. It was only in the late 1960s, some of the tanners in
Tamil Nadu started direct marketing of their products in the world market.
It is concluded that tanneries play a vital role in India, especially at Vellore
District in Tamil Nadu. The tanneries at Vellore District play a dual role; one is
providing employment opportunities to the weaker section of the society and
another is earning foreign exchange by exporting leather and leather products.
Global competition, e-business, the internet and advances in technology requires
flexibility and responsiveness. This new focus has placed operations management
in the limelight of business, because it is the function through which tanneries can
achieve this type of competitiveness
117
FOOTNOTES
1. Jackson, “Livestock”, The New Encyclopaedia Britannica, London, 1982,
Vol. 30, pp. 751.
2. Sarkar, K.T., Practice of Leather Manufacture, Oxford University Press,
London, 1962, pp 33.
3. Bruce and Carroll, The Devis Family and Leather Industry: 1834 – 1934,
Ryerson Press, Toronto, 1934, pp.11.
4. J.A. Waterer, Leather in Life, Art and Industry, McMillan, London, 1955, pp. 30.
5. Ibid. pp. 31.
6. McDonnell, History of Sanskrit Literature, London, 1925, pp. 167-16.
7. Watt Alexander, The Art of Leather Manufacture, London, 1934, pp. 34.
8. Findlary, A., The Spirit of Chemistry, London, 1934, pp. 3.
9. Sarkar, K.T., Practice of Leather Manufacture, Oxford University Press,
London, 1962, pp. 34.
10. Tewari Meena, “Trade Liberalisation and the Restructuring of Tamil Nadu‟s
Leather Sector: Coping with Liberalisation‟s New Environmental Challenges
and Lessons from prior Episodes of Adjustment.” Paper prepared for the
Centre for International Development, Harvard University and the
Government of Tamil Nadu, June 4, 2001.
118
11. Council for Leather Exports, Leather Industry, Chennai, 1995-96, pp. 3.
12. Shastry, A., Pollution Problems in Leather Industries in India, H.K.
Publications, New Delhi, 1988, pp. 196.
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