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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

70

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

71

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.

72

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.

73

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

74

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

75

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

76

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

77

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

79

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.

81

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

82

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).

84

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.

85

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,

86

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.

87

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

88

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.

89

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

90

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.

91

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

92

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

93

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.

13. Ravikumar, K.S., “Leather Industry in Tamil Nadu,” The Hindu, Business

Review, May 20, 1997, pp. 25.

14. Seetharamiah, A., “Report of the Committee on the Development of Leather

and Leather Manufacturers for Exports,” Government of India, 1972, pp. 18.

15. Central Leather Research Institute, 1996, pp. 21.

16. Chatrapati Singh, “Legal Policy for Control of Environment Pollution and

Environment of Cochin” University Law Review, 1994, pp.63.

17. Shweta Singh & S.Rajamani, (2011), “Environmental compliance and

sustainability of small and medium leather tanneries”, Leather News India.

18. Government of India, “Technology Evaluation and Norms Study in Leather

Tanneries”, Department of Scientific and Industrial Research, Ministry of

Science and Technology, New Delhi, November 1992.

19. Council for Leather Exports “Leather Industry,” Chennai, 1995-96, pp. 1.

20. Sandeep Singh, “Barriers and opportunities for promoting Trade in

Environmentally Friendly Products: A Study of India‟s Leather Industry,”

May 2008.

21. Hodgern, Thomas Parry and Company, Madras, 1936, pp. 35.

119

22. Government of Madras, “Report of the Committee for Leather Industry and

Trade,” Department of Industries, Labour and Co-operation, Madras, 1954,

pp.38-40.

23. Sankar, K. T., Theory and Practice of Leather Manufacture, Oxford

University Press, London, 1962, pp. 35.

24. Report of the Modernisation Committee on Leather Industry in Tamil Nadu

and Pondicherry, Madras, 1976, pp. 9-11.

25. Report on “Leather Industry in Tamil Nadu and Pondicherry,” July 1976, pp. 7.

26. Asha Krishna Kumar, “Inadequate Assessment”, Front Line, April 1, 2001,

pp. 108.

27. Narayanaswamy Naidu, B.V. “Report of the Enquiry into Labour Conditions

in Beedi, Cigar, Snuff, Tobacco-curing and Tanning Industries”, Government

of Madras, 1947, pp. 134-135.

28. Balraj, A.,“Report of the Sub-committee on the Working and Living

Conditions of Workers in Leather Industry in Tamil Nadu,” Govt. of

Tamil Nadu, 1986, pp. 27-40.

29. Directory of Tanneries in India, State Pollution Control Board, Chennai,

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30. Belliappa, P. M., “The Tanneries in Tamil Nadu,” The Hindu, July 6, 1996.

120

31. Suchitra M, “Leather - Vision 2010,” The Industrial Economist, 7-18 January

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32. Ibid., March 2008, Vol. XXX, No.4, pp. 49.

33. Elangovan, K., “Leather – A Road Map for Growth,” The Hindu Survey of

Indian Industry, 2006, pp. 248-251.