INDIAN FOOTWEAR INDUSTRY SCENARIO

Submitted To: Laxman Sir H.O.D DESIGNING DEPT. Submitted By: Eshu Gupta DFT-10 D

Background
Leather was one of the first manufactured materials, and the Leather Technologist can claim to be a member of an ancient profession. Leather has long outgrown in its practical purpose and today is regarded more as a luxury than a necessity, particularly in the affluent West.

The global industry is valued at about Rs.3964.4 billion (71.27 Billion Euro). Most of the producing countries are developing countries, yet China and Italy are the leading producing and exporting nations in the world with exports worth Rs. 886.16 billion (15.93 billion Euros) and Rs. 606.32 billion (10.901 billion Euros) respectively. The industry is buyer driven, with producing countries manufacturing in line with specifications, guidelines and technical advice provided by the buyer countries. The leather industry occupies a prominent place in the Indian economy in view of its substantial export earnings, employment potential and growth.

Leather Industry in India

Indian leather sector: A Profile India is the largest livestock holding country 21% large animals and 11% small animals A source for 10% global leather requirement Annual production value over Rs. 186.56 billion (3.354 billion Euros) Annual export value over Rs. 125.46 billion (2.225 billion Euros) Export growth CAGR (compound annual growth rate) 8.61% (5 years) About 2.50 million workforce (30% women) Promising technology inflow and Foreign Direct Investment Enormous potential for future growth (domestic as well as export)

The Indian leather industry, one the most vibrant sector of the countrys economy, is well-structured and spans various segments, such as tanning and finishing, footwear and footwear components, leather garments, leather goods, including saddles and harness. Well-recognized in the international market, the Indian leather goods constitute about 7 per cent of Indias export earnings. Besides being a significant earner of foreign exchange, the leather industry generates employment, ensuring jobs for over 2.5 million people, with 75 per cent of the production from small and cottage sectors. India, with an output of Rs. 186.56 billion (3.354 billion Euros) and exports of Rs. 125.46 billion (2.225 billion Euros), is placed third, while developed markets such as the US are major consumers of leather products. It is now poised for a big leap to double its global share from the present 3%. The industry covers a vast spectrum of inputs, activities, skills and products i.e. livestock, hides and skins, tanning, leather products and exports.

The Indian Leather Industry is growing by leaps and bounds. One must be wondering why India is exporting so much of leather to western countries. Apparently because leatherwear still enjoys a great demand abroad and now-a-days even the domestic market is developing and consuming the offerings of this industry.

Major Production Centres of Leather and Leather Products

Southern Region Tamil Nadu Andhra Pradesh Karnataka Northern Region Punjab Delhi Eastern Region West Bengal Central Region Uttar Pradesh Western Region Maharashtra

Chennai,Ambur, Ranipet, Vaniyambadi, Trichy and Dindigul Hyderabad Bangalore

Jallandhar Delhi

Kolkata

Kanpur and Agra

Mumbai

Slaughter houses in India

There are 2702 slaughterhouses in the country, which are recognized or authorized by local bodies. In addition a considerable number of animals are slaughtered in unauthorized places. A rough estimate indicates up to 50 percent of animals slaughtered in any urban center are from unauthorized slaughter. Over the years, the facilities and hygienic conditions in most of the slaughterhouses have deteriorated. Compared to 1951, livestock population increased by about 62 percent and human population increased by 134 percent but the number of authorized slaughterhouses have not increased to meet the demand for meat production. The increased demand for meat is met either through over crowding operations in the existing slaughterhouses operating at much higher capacity than feasible in the facilities or through unauthorized slaughter at many places. In both these situations not only meat hygiene is a casualty, increased pollution and adverse public reactions are observed. The existing slaughterhouse capacity in the country is unable to meet the growing public demand for clean and hygienic meat. This can be achieved by improving existing slaughterhouses to accommodate higher capacities and creating new slaughterhouses with modern facilities.

Major source of cattle for slaughterhouses

Several head of cattle are reportedly being transported from Karnataka to slaughterhouses in Andhra Pradesh, Maharashtra and Kerala. It is estimated that more than three million cattle head are being transported out of the State annually. It is said that Karnataka has emerged as a major source of cattle for slaughterhouses as they are available at cheaper rates. The demand for beef in Kerala is said to be one of the reasons for the transportation of a large number of cattle to slaughterhouses there. While the domestic consumption in that State is said to be around two lakhs tonnes, the slaughterhouses also cater to the international market. Though Kerala has a high count of cattle, some experts say these cannot be sent to slaughterhouses as they are expensive hybrid cattle.

Leather Park
Under the leather park package, Chennai is going to have two parks one for footwear and the other for components. An exclusive park for tanneries is also coming up at Nellore, a leather goods park within the upcoming Calcutta Leather Complex in Kolkata and another component park in Agra. The leather goods park project of Indian Leather Products Association (ILPA), coming up on approximately 60 acres of land inside the Calcutta Leather Complex (CLC) at Bantala in east Kolkata,The facility will put Kolkata on the international leather goods buyers' map. Ten leather product manufacturing companies, including Liberty Shoes and Irving Leather Company of the US besides a couple of Chinese companies, are keen to set up units in the leather park proposed to be set up in Nellore district.

Footwear Park,Bahadurgarh.
The cluster firms comprise a mix of largely micro and small sized firms and there is urgent need to strengthen the component making segment. Also, there is need to address shortages in manpower and other value chain gaps in the cluster. In this context, cluster firms propose to establish the following facilities in a public-private partnership mode:

Indigenous design development facility ,Skill development facility Testing Lab, Value-added component development facility

Scope of tanneries in India

The Indian market has been fragmented with about 2200 tanneries of which 2100 are small scale units and over 8000 leather product manufacturing units. The tanning industry is concentrated in three states viz. Tamil Nadu, West Bengal and Uttar Pradesh. Of the total number of tanneries in India, Tamil Nadu accounts for 52%, West Bengal 23% and U.P 12%. The other important states are Maharashtra, Andhra Pradesh and Punjab. Looking from the angle of scale of operations, the tanning industry largely exists in the small-scale sector with a share of 93% in the total number of tanneries in the organized sector. Tamil Nadu
Tamil Nadu has a dominant presence in the leather and leather based industries. The tanning industry in India has a total installed capacity of 225 million pieces of hide and skins of which Tamil Nadu alone contributes to an inspiring 70%. Leather industry occupies a pride of place in the industrial map of Tamil Nadu. Tamil Nadu enjoys a leading position with 40% share in Indias export. It currently employs about 2.5 million persons Leather exports by the end of the year 2000-2001 were Rs. 9000 crores. This translates into exports worth nearly Rs. 102.6 billion (1.844 Billion Euros) from Tamil Nadu - given the major share it has traditionally enjoyed. Govt. of Tamil Nadu offers a special capital subsidy to further encourage the leather industry. TALCO-a state govt. organisation is setting common effluent treatment plants in leather industry clusters.

A recent study by the National Council of Applied Economic Research (NCAER) made a comparison of the incentive packages of all Indian States which reveals that Tamil Nadu offers the most attractive package among industrialized States of India. Tamil Nadu ranks II at the all India level in terms of attractiveness of incentives.

NCAER Incentives Index

West Bengal
West Bengal is one of the country's top states for export of finished leather goods. 70% of the country's leather goods are exported from West Bengal. Bata India Limited is India's largest manufacturer and marketer of footwear products. Bata India sells 60 million pairs of footwear products per year throughout India and in overseas markets such as USA, UK, Europe, Middle East and Far East. Its registered office is at S.N.Banerjee Road, Kolkata. It has 5 plants near Kolkata. Main plant is located in Batanagar near Kolkata. Bata India secures its leather supply from two tanneries in Mokamehghat (Bihar) and Batanagar (West Bengal).

The number of manufacturing industries engaged in leather products is 538. West Bengal Leather Industrial Development Corporation provides market facilities for the leather products manufactured by small scale industries located in the state. The export market for leather products is very high for good quality leather footwear's and leather crafts and articles. The exports are mainly to European countries as Germany, Italy, UK, France etc. Uttar Pradesh U.P. is one of the most important states in India holding sizeable population of live stock. Claiming a share of 22% U.P. ranks Ist in case of Buffalo and IInd in case of Cattle having a share of 12%. With regards to Goat and Sheep it has IVth and VIIth position respectively. Thus, U.P. has a very strong raw material base and all types of main raw material for leather industry are available.

Major production centers and Number of leather and leather products industries in U.P. are to the tune of approx. 11500 of which Kanpur and Agra are the two famous production centres in the world.

Kanpur is a prominent centre for leather processing. About 200 tanneries are located in Kanpur. Kanpur tanneries specialize in processing hides into heavy leather (Sole, harness and Industrial leather). This is the only centre in India where saddlery products are manufactured. Agra has been the biggest centre for shoe-manufacturing in the country. Apart from these traditional centers for leather and leather products manufacturing in U.P., NOIDA has recently emerged as another major centre especially for leather footwear and leather garments. NOIDA provides very good infrastructural facilities and establishment of FDDI in NOIDA is expected to promote more footwear. Meerut is another centre for production of sports goods.

The investment opportunities and some typical project profiles are as follows:Project Leather Shoes Vegetable Leather Tannery Leather Tannery Polymer Shoe Lasts Leather Shoes, Garments & Saddles Leather Shoe Uppers Finished Leather, Shoes, Garments & Suitcases Cost (Rs. in million) Cost (in million Euros) 50.00 25.00 80.00 152.00 80.00 35.00 420.00 0.898 0.475 1.438 2.732 1.438 0.629 7.551

Small & Cottage industries

It is apparent that the small-scale sector accounts for large processing capacity ranging from 70% to 87% for different leathers. In view of widespread modernization and mechanization of the tanning industry, the role of the cottage sector is fast declining. It is unable to complete with the fast-growing organized sector. The Tanning industry in India is well developed. It has back up of a strong R&D base, modern technology as well as trained manpower. The unique aspect is that it turns out best possible quality leathers from relatively low quality hides. India annually produces around 1800 million sq. ft. of leather which accounts for 11% of global production. Goat and buffalo based leathers are Indias major strength. The main products made out of leather are footwear, leather garments, leather goods such as handbags, belts, wallets, gloves, sport goods, harness and saddlery, upholstery, etc. Of all these items, it is footwear that consumes about 60% of the total leather production. The manufacture and export of leather products is systematically promoted, as their value addition is 4 to 5 times that of raw materials.
The industry has a large tanning capacity per day but it utilizes only 60-70% of its installed capacity. The turnover of the tanning of the tanning industry is estimated at Rs.8000-9000 crore (182.35-205.15 crore Euros) The industry produces about 2 billion sq.ft of finished leather of which only 10-15% valued at Rs. 10543.2 Million (240.32 Million Euro) is exported. The problem relating to effective discharges of effluents which is a WTO compulsion is increasingly threatening the small and medium scale tanneries all over the country. The tanning industry is heavily dependent on indigenous raw hides and skins for its supply of raw materials which is very fragmented. Imports are low despite exemption from customs duties due to high import prices (3-4 times higher) and absence of appropriate machinery to process the imported hides and skins. As international pressures to supply good quality leather products mount, the leather manufacturers would have to increase the use of imported hides and skins to improve the image of Indian Leather and Leather products. In the Indian tanning sector, the tiny units primarily engage in producing semi-finished leather, the small units engage in producing both semi-finished leather and finished leather and the large units are usually fully integrated units.

FINISHED LEATHER
Global Scenario: The Global import of Finished Leather declined from US$ 21813.33 million in 2006 to US$ 18799.30 million in 2010.India accounts for a share of 4.47% in the global finished leather imports A Statement showing global import of finished leather viz-a-vis Indias export and share during 2006 to 2010 is given below: (Value in Million US$) 2006 21813.33 724.00 3.32% 2007 23277.46 807.19 3.47% 2008 21659.93 673.37 3.11% 2009 15096.39 627.95 4.16% 2010 18799.30 841.13 4.47%

WORLD IMPORT INDIA'S EXPORT % SHARE OF INDIA

Major importing countries of Finished Leather 2006 vis--vis 2011 A comparison: (Value in Million US$) Country China Hong Kong Italy Germany Romania USA Spain Portugal Poland France Korea Rep Mexico Thailand 2006 4129.53 3665.32 2616.61 808.36 813.66 823.21 568.01 339.03 538.38 385.35 471.81 687.51 332.69 2011 3906.11 2768.61 2287.06 756.39 613.93 563.86 521.85 447.70 437.67 433.68 394.15 386.34 355.08

These 13 countries together accounts for a share of 73.79% in global finished leather import trade.

Major Exporting Countries of Finished Leather 2006 vis--vis 2010 A comparison (Value in Million US$) Country Italy Nigeria Hong Kong Brazil Argentina USA India Korea Rep

2006 4595.82 78.26 3040.03 1875.32 883.10 1043.02 724.00 833.33

2010 4374.72 3037.42 2095.11 1736.50 990.88 864.93 841.13 802.75

Statement showing Indias export of finished leather 5 years 2006-07 724.00 2008-09 673.37 2009-10 627.95 2010-11 841.13 2011-12 1023.21

Indias export of finished leather touched US$ 1023.21 million in 2011-12, holding a share of 21.02% in Indias total export of US$ 4868.71 mn. Indias Export of Finished Leather Major markets 5 years Major markets for Indian Finished Leather are Hong Kong with a share of 32.05%, Italy 16.24%, China 9.49%, Korea Rep 3.47%, Spain 3.35%, Germany 2.82%, Indonesia 2.41%, and Netherlands 1.77% (Value in Million US$) 2010-11 2011-12 22.02 24.17 28.89 7.70 8.86 14.01 2.69 3.33 3.73 75.15 126.14 166.18 8.71 9.69 9.74 236.28 303.20 327.93 18.75 24.33 34.25 11.56 14.30 18.09 8.52 13.46 16.40 9.71 8.51 11.11 45.97 69.02 97.09 9.68 19.00 24.66 27.65 29.47 35.55 3.35 9.29 10.82

Countries Germany USA UK Italy France Hong Kong Spain Netherlands South Africa Portugal China Indonesia Korea Rep Russia

2007-08 34.60 9.20 2.87 140.44 10.11 268.84 28.22 8.43 13.27 12.85 51.77 14.54 28.35 9.77

2008-09 26.77 7.64 3.42 99.40 6.28 219.80 23.46 8.82 9.29 12.34 45.79 12.75 23.49 6.95

2009-10

Quantity-wise Export of finished Leather: (In Sq.ft) 2010-11 208,420,362 216,871,897 91,711,166 61,175,462 22,253,225 14,006,024 52,087,668 482,109 7,761,269 14,077,269 688,846,451

Goat Leather Buff Leather Cow Leather Sheep Leather Buff Calf Leather Cow Calf Leather Upholstery Leather Sole Leather Others (Leather) Industrial Leather Total

2006-07 195,075,053 190,887,830 85,982,053 40,338,691 33,749,851 18,600,194 76,532,576 1,676,351 7,680,926 217,647 650,741,172

2007-08 189,808,286 208,400,706 90,130,049 44,781,694 28,818,943 16,408,130 49,277,277 844,768 15,836,925 213,910 644,520,688

2008-09 183,597,321 140,084,671 68,674,431 42,046,463 16,800,963 13,815,558 48,124,232 1,017,259 8,496,713 3,080,196 525,737,807

2009-10 153,393,432 172,623,195 62,224,552 44,389,812 30,108,098 10,524,251 56,886,742 441,601 7,804,292 1,828,606 540,224,581

Region-wise Export of Finished Leather: (In sq.ft) 2006-07 2007-08 2008-09 2009-10 2010-11 280,460586 277,947,631 237,888,805 236,368,814 314,521,791 279,829,738 284,551,012 219,051,229 240,391,588 294,743,079 22,037,810 22,797,021 22,074,457 19,131,083 24,295,017 36,162,362 34,435,669 24,853,790 22,447,681 28,181,428 32,250676 24,789,355 21,869,527 21,885,414 27,105,135 Total 650,741,172 644,520,688 525,737,808 540,224,580 688,846,451

South Central West East North

CLE Membership Records

Councils Membership Strength of Finished Leather Panel 2006-07 402 73 8 59 38 Total 581 2007-08 392 70 9 59 38 568 2008-09 381 71 7 54 39 552 2009-10 460 79 6 52 45 642 2010-11 522 92 5 54 52 725

South Central West East North

Conclusion: Strong infrastructures are in place for the leather tanning in the country. Eco-sustainable tanning processes are being followed in the tanning industry. The tanning industry is well supported by the presence of chemicals and auxiliaries industry. In the MODEUROP Congress, colours presented by the India are selected continuously, which reinforces the quality of Indias leather processing techniques. Indian finished leather finds the pride of place in the global fashion markets

INDIAN FOOTWEAR INDUSRTY

There are nearly 4000 units engaged in manufacturing footwear in India. The industry is dominated by small scale units with the total production of 55%. The total turnover of the footwear industry including leather and non-leather footwear is estimated at Rs.8500-9500 crore (Euro 551.3-1723.1 Million) including Rs.1200-1400 crore (Euro 217.6253.9 Million) in the household segment. India's share in global leather footwear imports is around 1.4% Major Competitors in the export market for leather footwear are China (14%), Spain (6%) and Italy (21%).The footwear industry exist both in the traditional and modern sector. While the traditional sector is spread throughout the country with pockets of concentration catering largely to the domestic market, the modern sector is largely confined to select centres like Chennai, Ambur, Ranipet, Agra, Kanpur and Delhi with most of their production for export. Assembly line production is organized, and about 90% of the workforces in the mechanized sector in South India consist of women. In fact, this sector has opened up plenty of employment opportunities for women who have no previous experience. They are trained to perform a particular function in the factory itself. The footwear sector is a very significant segment of the leather industry in India; rather it is the engine of growth for the entire Indian leather industry.

India is the second largest global producer of footwear after China, accounting for 13% of global footwear production of 16 billion pairs. India produces 2065 million pairs of different categories of footwear (leather footwear - 909 million pairs, leather shoe uppers - 100 million pairs and non-leather footwear - 1056 million pairs). India exports about 115 million pairs. Thus, nearly 95% of its production goes to meet its own domestic demand. The major production centers in India are Chennai, Ranipet, Ambur in Tamil Nadu, Mumbai in Maharastra, Kanpur in U.P., Jalandhar in Punjab, Agra, Delhi, Karnal, Ludhiana, Sonepat, Faridabad, Pune, Kolkata, Calicut and Ernakulam. About 1.10 million are engaged in the footwear manufacturing industry. . Footwear exported from India are Dress Shoes, Casuals, Moccasins, Sport Shoes, Horrachies, Sandals, Ballerinas, Boots, Sandals and Chappals made of rubber, plastic, P.V.C. and other materials.

Brands sourced from India: Footwear Acme, Ann Taylor, Bally, Charter Club, Clarks, Coach, Colehann, Daniel Hector, Deichmann, DKNY, Double H, Ecco, Elefanten, Etienneaigner, Florsheim, Gabor, Geoffrey Beene, Guess, Harrods, Hasley, Hush Puppies, Kenneth Cole, Liz Claiborne, Marks & Spencer, Nautica, Next, Nike, Cole Haan, Nunn Bush, Pierre Cardin, Reebok, Rockport, Salamander, Stacy Adams, Tommy Hilfiger, Tony Lama, Versace, Yves St. Laurent, Zara, Johnston & Murphy, Docksteps, Timberland, Armani, Geox, Diesel, Ted Baker, Lacoste, Kickers, Calvin Klein, Sioux, Brasher, Zegna, Massimu Dutti, Buggatti, Lloyd, Christian Dier, Salamander, Camper, Bata, Espirit, French Connection, Legero, Mercedez, H & M and many more famous brands Besides, major brands are sourced from India, MNC brands are sold in India and Indian brands sold in India. Indian Brands sold in India

MNC Brands Sold in India Aldo, Bally, Clarks, Ecco, Florshiem, Ferragammo, Hush Puppies, Lee cooper, Lloyd, Marks & Spencer, Nike, Nine West, New Balance, Reebok, Rockport, Stacy Adams, Tods, Geox , Louis Vuitton

Red Tape, Bata, Liberty, Khadims, Lakhani, Metro, Action

US Retail giant Wal-Mart has also begun sourcing footwear from India since the last two years. The Footwear sector is now de-licensed and de-reserved, paving the way for expansion of capacities on modern lines with state-of-the-art machinery. To further assist this process, the Government has permitted 100% Foreign Direct Investment through the automatic route for the footwear sector. Conducive Investment climate towards attracting overseas investments and increasing cost competitiveness. The Government of India is setting up dedicated Footwear Complex and Footwear Components Part where footwear clusters are located. There has been active interest in collaborating with Indian Footwear companies from European countries like Italy, Spain and Portugal.

Footwear Imports Global Trend: Major Importing Countries of Footwear (Leather and Non-Leather) Country USA Germany France UK Italy Hong Kong Japan Russia Spain Netherlands Belgium Canada 2006 19835.93 5591.77 4778.07 4950.49 4047.37 4984.59 3509.83 1121.68 2036.21 1978.33 2057.39 1507.21 2007 20039.13 5966.99 5473.04 5281.55 4529.77 4881.67 3750.04 2067.82 2388.74 2297.95 2543.04 1677.05 2008 20104.41 6529.33 5714.00 5213.00 4810.25 4944.40 4112.99 2843.81 2917.97 2570.86 2892.62 1748.04 2009 17904.13 6037.73 5379.78 4772.59 4484.10 3974.30 4077.58 2149.42 2464.34 2481.35 2554.50 1645.09 (Value in Million US$) 2010 21530.97 6814.89 5802.18 5529.01 4928.22 4676.06 4468.16 3768.80 2816.83 2752.38 2554.59 1869.25 (Value

Major Exporting Countries of Footwear (Leather and Non-Leather) in Million US$) Country China Italy Hong Kong Vietnam Belgium Germany Spain Indonesia Netherlands France Portugal Brazil India 2006 21014.63 8246.51 5692.82 2960.28 2607.89 2147.74 1514.63 1577.03 1535.21 1465.11 1863.07 1236.91 2007 24181.69 9712.94 5639.64 3375.63 2999.19 2440.47 1567.05 1811.96 1840.51 1695.88 1911.74 1489.35 2008 28115.96 10218.75 5666.05 3680.80 3611.90 2670.35 1828.44 2240.70 2015.13 1797.00 1881.30 1534.32 2009 26571.20 8189.14 4502.49 3464.10 3194.69 2487.12 1688.35 2235.80 1800.70 1552.74 1359.98 1507.59 2010 33665.11 8754.52 5243.74 3716.77 3443.61 2449.73 2428.72 2412.14 1969.58 1719.67 1472.42 1732.04

Footwear Global Scenario and Indias share The global import of Footwear (both leather footwear as well as non-leather footwear) has increased from US$ 73.79 billion in 2006 to US$ 91.37 billion in 2010, growing at a CAGR of 5.48%. During 2010, the Indias share in the global import is 1.95%.

Global import of Footwear India's export of Footwear & Uppers % Share of India

2006 73795.96 1236.91 1.67%

2007 81574.25 1489.35 1.82%

(In Million US$) 2008 2009 88731.08 78249.66 1534.32 1.72% 1507.59 1.92%

2010 91373.8 2 1758.67 1.92%

Global Footwear import includes leather & non-leather

Indias Footwear includes Leather, non-leather and uppers Footwear is the engine of growth of the leather industry in India. Indias export of Footwear touched US$ 2077.27 million in 2011-12, accounting for a share of 42.67% in Indias total export from the leather sector of US$ 4868.71 mn Indias Footwear export (leather, uppers & non-leather) is growing at a CAGR of 8.67% in the last five years ending 2011-12 Indias export of leather footwear had increased from US$ 1174.03 million in 2007-08 to US$ 1715.17 million in 2011-12 Indias export of footwear components had increased from US$ 269.30 million in 2007-08 to US$ 281.83 million in 2011-12 Indias export of non-leather footwear has increased from US$ 46.02 million in 2007-08 to US$ 80.27 million in 2011-12

Indias Footwear Export Growth over the last Four Decades Export of footwear from India increased manifold over the last four decades. During 2011-12, Indias footwear export is valued at US$ 2077.27, constituting 42.67% share in total export of leather & leather products.

Footwear exports has increased from US$ 119.72 million in 1981-82 to US$ 2077.27 million in 2011-12

Major Markets: During 2010-11, the main markets for Indian Footwear are UK with a share of 19.16%, Germany 16.15%, Italy 12.46%, USA 8.04%, France 8.93%, Spain 6.45%, Netherlands 4.51%, Portugal 1.41%, U.A.E 2.45% and Denmark 0.97.%. These 10 countries together accounts for 80.53% share in Indias total footwear export.Nearly 90% of Indias export of

footwear goes to European Countries and the USA. Future growth of Indian footwear in India will continue to be market driven. The European countries and the US are major consumers for the Indian footwear.

A Statement showing Indias Export of Footwear to different countries: (Value in Million $) 2007-08 2008-09 246.84 229.65 241.37 247.06 229.81 221.09 136.92 163.03 116.03 119.2 76.69 91.86 72.91 76.2 37.34 28.21 39.23 39.4 17.48 14.78 12.52 13.34 12.04 12.64 10.41 8.96 8.52 8.49 4.63 8.23 226.61 252.18 1489.35 1534.32

Country Germany UK Italy USA France Spain Netherlands Portugal UAE Denmark Australia Sweden Canada South Africa Japan Others Total

2005-06 170.97 195.78 134.35 131.07 74.48 63.7 32.96 22.15 25.78 18.37 11.58 6.77 11.95 8.26 3.17 133.9 1045.24

2006-07 217.23 208.2 186.11 127.15 99.81 64.57 48.57 35.03 34.64 14.65 10.11 7.99 10.91 12.11 3.07 156.76 1236.91

2009-10 224.3 296.45 210 123.6 144.56 95.94 65.13 22.63 39.45 17.01 15.5 12.2 9.3 9.87 5.45 216.2 1507.59

2010-11 286.7 339.65 219.72 143.02 154.95 112.05 6.19 25.69 41.82 16.55 12.82 12.07 10.56 11.33 7.51 358.04 1758.67

2011-12 353.77 360.48 219.79 183.1 159.27 113.85 101.72 28.77 62.06 24.3 15.59 14.08 15.01 14.75 14.63 396.10 2077.27

% Share 17.03% 17.35% 10.58% 8.81% 7.67% 5.48% 4.90% 1.38% 2.99% 1.17% 0.75% 0.68% 0.72% 0.71% 0.70% 19.07% 100.00%

Future Trends: - Keeping in view its past performance, current trends in global trade, the industrys inherent strengths and growth prospects, the footwear industry aims to augment production, thereby enhancing its exports from the current level of US$ 2.07 billion.Indian footwear industry poised for growth India has state-of-the-art manufacturing plants. The footwear sector has matured from the level of the manual footwear manufacturing method to the automated footwear manufacturing systems. Footwear production units are installed with world class machines. Manned by skilled technicians, these machines help to turn any new innovative idea into reality. Support systems created for the sector have indeed served the footwear industry well. India has a well developed footwear component manufacturing industry. The future growth of the footwear industry in India will continue to be market-driven, and oriented towards EU and US markets. With technology and quality of the footwear improving year after year, Indian Footwear industry is stamping its class and expertise in the global footwear trade.

Leather Goods & Accessories & Gloves

The second most important product made out of leather is leather garments. Modern factories have been established in the small-scale during the last decade, mostly in the vicinity of urban Areas of Chennai, Bangalore, Delhi and Hyderabad. The leather garment is relatively high leather intensive commodity. Garments and Goods, these segments are essentially dominated by the small scale sector with Large Scale Industries (LSIs) having a very negligible share of less than 3% in garments. Due to increased export demand, the capacity for the leather garment industry has been rising and is presently 18 million pieces per annum. Production is placed at 12 million pieces per annum with capacity utilization at 60-75% with an aggregate turnover of Rs.2200 crore (399.05 million Euros). The share of leather garments in total exports of leather and leather products has been rising and is presently around 24%, having grown at CAGR of 9%, since 1995-96 to reach Rs. 2104 crore (503.8 Million Euros) in 2000-01. India's import in world import garments is around 11%. Our main competitors are China, Italy and Turkey.

State wise Distribution of Manufacturing Units Footwear Units States Tamil Nadu Karnataka West Bengal Maharashtra Haryana & Punjab Uttar Pradesh New Delhi Others Factories + Household 160 48 230 20 Leather Garments Units + Leather Goods Units 598 40 436 48 10 8 22 43 12

Total 758 88 666 68 138 171 290 155 291

Andhra Pradesh 128 163 268 112 279

Source: The All India Skin and Hides Tanners and Merchants Association (AISHTMA)

The industry has production capacity across all key sectors, as shown below: Estimated Production Capacities ITEM Hides Skins Leather Footwear Leather shoe uppers Leather Garments Leather Goods Industrial Gloves Saddlery
Global Scenario: The global imports of leather goods & gloves had increased from US$ 13829.75 mn in 2006 to US$ 17017.35 mn in 2010, growing at a cumulative annual growth rate of 5.32%. A Statement showing global import of leather goods & gloves viz-a-vis Indias export and share during 2006 to 2010 is given below: (Value in Million US$)

CAPACITY 65 million pieces 170 million pieces 909 million pairs 100 million pairs 16 million pieces 63 million pieces 52 million pairs 0.10 million pieces

Leather Goods & Gloves WORLD IMPORT

2006 2007 2008 2009 2010 13829.75 16415.68 18136.44 14380.87 17017.35

INDIA'S EXPORT % SHARE OF INDIA

706.29 5.11%

800.47 4.88%

873.45 4.82%

757.02 5.26%

855.78 5.03%

Indias export of leather goods & accessories has increased from US$ 706.29 mn in 2006-07 to US$ 1088.09 mn in 2011-12, growing at a cumulative annual growth rate of 9.02%Major importing Countries of Leather Goods & Gloves 2006 vis--vis 2011 A comparison (Value in Million US$)

Country USA Hong Kong Japan France Germany UK Italy Korea Rep China Singapore Spain Canada Switzerland

2006 3262.84 1493.35 1570.15 817.29 717.48 743.65 705.78 203.70 171.03 258.95 303.92 291.53 279.29

2011 3246.51 2161.18 1671.00 1083.13 901.65 837.87 821.88 516.59 493.72 406.48 349.52 347.22 339.72

These 13 countries together accounts for a share of 77.43% in global leather goods & gloves import. Top Exporting countries of Leather Goods & Gloves 2006 vis--vis 2011 A comparison

(Value in Million US$) Country China Italy Hong Kong France India Germany USA Singapore Switzerland Spain Pakistan Leather Gloves:

2006 3102.04 2708.19 1821.62 2313.18 706.28 401.73 467.81 96.48 223.94 232.72 238.82

2011 4064.43 3006.06 2507.79 2412.82 814.91 506.30 377.69 325.04 267.31 238.20 235.33

The global imports of Leather Gloves had increased from US$ 1933.86 mn in 2006 to US$ 1959.88 mn in 2010, growing at a cumulative annual growth rate of 0.33%.

A Statement showing global import of Leather Gloves viz-a-vis Indias export and share during 2006 to 2010 is given below (Value in Million US$) 2006 2007 2008 2009 2010 1933.86 2092.08 2435.84 1764.28 1959.88 137.94 183.26 232.05 121.22 165.63 7.13% 8.76% 9.53% 6.87% 8.45%

WORLD IMPORT INDIA'S EXPORT % SHARE OF INDIA

Major importing Countries of Leather Gloves 2006 vis--vis 2011 A comparison (Value in Million US$)

Country USA Germany Japan France Canada Hong Kong UK Italy Sweden Netherlands Korea Rep. Australia Spain

2006 600.19 134.67 138.49 92.24 87.70 173.88 72.08 73.27 49.35 39.79 23.10 33.07 54.93

2011 536.50 158.09 127.27 108.31 99.93 99.62 80.31 68.27 61.97 49.12 47.30 39.88 39.62

These 13 countries together accounts for a share of 77.36% in global leather gloves import.

Indian Scenario Leather Goods form an important segment of the leather industry in India. Leather goods production capacity is estimated to be 63 million pieces annually. The different types of Leather Goods and accessories are manufactured in India i.e., Trunks, suit-cases, vanitycases, executive-cases, brief-cases, school satchels, traveling bags / luggage, Portfolio and similar such items, Hand Bags, shopping bags and similar such items, Wallets, Purses, Pouches, Passport Holders, Credit Card Holders, Diary covers and similar such items, Leather Belts, Caps etc. India also produces Leather Upholstery Sofa Seat Covers, Car Seat Covers etc. Most of the units manufacturing leather goods are located in Kolkata, Chennai, Mumbai, Kanpur, Bangalore and Pondicherry. Industry is situated in few other clusters also. India is the fifth largest exporter of leather goods and accessories (inclusive of Gloves) in the world. Leather Goods and accessories manufactured in India bear brand names like Coach, Pierre Cardin, Yves St Laurent, Etienne Aigner, Geoffery Beene, Harrods, Marks & Spencer, Liz Caliborne, Guess, Next, Tommy Hilfiger, Kieffer, Waldhausen, Biemen, Nederinum, Zaldi, Kallquists, Shires, GFS, Millers, Eisers, Weco, Ukal and Decalthon.

Leather Gloves: Leather gloves of all categories like fancy/fashion gloves, sports gloves, industrial gloves and other leather gloves is a thrust product among the items of small leather goods being manufactured and exported from India. India is the fourth largest exporter of Leather Gloves to the world. India produces about 52 million pairs of industrial gloves annually. India offers the world the largest technically trained manpower in leather craft at the most competitive costs. Its association with respected product testing institutions such as SATRA in the UK and PFI in Germany ensures the finest quality leather in the manufacturing of gloves.

Indias Export of Leather Goods & Accessories including Gloves 5 years 2008-09 2007-08 800.46 873.44 2009-10 757.02 2010-11 855.78 2011-12

(Value in Million US$)

1088.09

Indias export of Leather Goods & Accessories including Gloves touched US$ 1088.09 million in 2011-12, holding a share of 22.35% in Indias total export of US$ 4868.71 mn Major Markets The major markets for Indian leather goods & gloves are USA with a share of 18.06%, Germany 15.80%, UK 12.61%, Spain 7.27%, Italy 6.16%, France 5.49%, Netherlands 4.49%, UAE 3.22%, Australia 3.14%, Denmark 2.56%. Indias Export of Leather Goods & Accessories Country-wise 5 Years 2007-08 Countries Germany USA UK Italy France Hong Kong Spain Russia Netherlands Australia New Zealand Denmark Belgium UAE 122.65 123.86 133.92 56.96 36.07 3.37 59.93 1.02 36.51 28.48 2.25 15.20 13.94 26.16 2008-09 132.08 155.02 125.77 67.51 45.04 4.22 52.33 1.01 41.91 32.72 2.02 17.02 14.88 34.97 2009-10 117.75 137.97 123.08 44.82 38.90 5.77 51.47 0.57 38.12 26.00 1.56 16.16 12.34 21.63 2010-11 135.34 162.90 131.74 46.57 48.16 8.71 62.82 0.97 40.86 26.27 2.35 18.91 14.83 21.76 (Value in Million US$) 2011-12 171.96 196.47 137.20 66.99 59.68 11.45 79.05 2.46 48.90 34.11 3.34 27.80 18.94 35.00

Quantity-wise Export of Leather Goods: (In Pcs) 2010-11 14,352,908 49,358,526 10,967,894 6,725,954 4,253,178 4,623,278 584,100 1,998,087 100,867 1,135,307 193,119 193,119 195,081 170,871 141,743 31,543,283 126,987,079

Ladies Handbags and other bags Wallets Leather Belts, Caps & Ties Purses Pouches Passport holders / Credit card holders etc Travel / Luggage ware Handcrafted leather items Sofa / Chair/ Car seat covers (upholstery) Diary Covers / Cheque Book Covers Pet Accessories Portfolio / Briefcases Desktop materials Covers for Camera, Calculator etc Leather Toys Other Leather Goods Total

Quantity-wise Export of Leather Gloves: (In Prs) 2010-11 111,566,296 1,787,382 31,394 788,357 114,173,429

Industrial Gloves Fancy / Fashion Gloves Sports Gloves Other Leather Gloves Total

Region-wise Export of Leather Goods: (In pcs) 2009-10 2010-11 9,514,731 50,354,885 26,994,279 22,915,160 4,014,707 Total 113,793,762

Central East North South West

15,138,867 55,874,869 32,043,216 19,429,738 4,500,389 126,987,079

Region-wise Export of Leather Gloves: (In prs) 2009-10 Central East North South West Total 46,090 97,489,114 194,650 2,802,371 82,624 100,614,849 2010-11 0 110,917,148 273,967 2,918,717 63,598 114,173,430

Leather Industry Network An ideal leather industry network would comprise of the following: Livestock (Cattle, Buffalo, Goat) Slaughter houses Raw Hide/Skin Collection Tanning Industry Leather Industry Other Allied Industries Export Market

The other small industries that can co-exist within this network are the glue and manure manufacturing industries that utilize the bones and discarded organs of the slaughtered animals respectively. Besides, operating in close cooperation with the slaughter houses are corporations that have built their services and products around the meatconsuming market - processors of meat into various forms of fast food, processed meat transporters, deep freezer manufacturers, cattle feed 'enhancers', drug manufacturers who sell 'meat growth hormones' and antibiotics for cattle and even agribusiness' banks that will give loans only for cattle 'producing'. Not to forget the fast-growing biotech industry. Other value added product manufacturing industries like Meat-cum-Bone Meal (MBM), Tallow, Bone Chips, Pet Foods and Methane as a source of energy can also exists close to the slaughter houses. Thus the leather industry network appears to offer numerous possibilities for the establishment of other small enterprises.

Status of Livestock in India India is the leading livestock holding country in the world. It ranks first in the case of cattle (including buffaloes), second in goats and fourth in the case of sheep. India has a predominar share of buffaloes. While buffaloes and goats have recorded annual growth rates of 1.86% and 3.11% respectively, cattle and sheep have recorded a marginal growth rate of 0.52%. Hides and skins are the basic raw materials. Trends in the livestock population and its management; rate of mortality of animals and meat consumption pattern greatly influence the availability of hides and skins. Cattles, buffaloes, goats and sheeps are the major sources of hides and skins. The other sources are pigs, horses, camels and wild animals such as crocodiles, snakes, foxes, etc. However, processing and use of wild animal skins is prohibited due to ecological reasons.

Share of Leather by Animal Type

Goat, 8% Sheep, Bovine, 16% 65%

Bovine

Sheep

Goat

Pig

Indians population of livestock, cattle (cows and bulls), buffalo, sheep and goat is constantly increasing. The large population of cattle, buffalo, sheep and goat gives Indian an edge in the international markets of leather and

products which are backed by introduction of latest tanning technologies to produce quality leather for the manufacture of many value-added products. World raw Hides and Skins Production Category Raw Hides and Skins (Metric Tonnes) Year 2002 2003 Total 6,535,454 6,806,099 Bovine Hides and Skins World 5,895,375 6,147,035 Developing Countries 3,315,001 3,547,112 Developed Countries 2,580,374 2,599,923 Sheep and Lambskins World 382,459 390,712 Developing Countries 202,345 209,020 Developed Countries 180,114 181,692 Goat and Kidskins World 257,620 268,352 Developing Countries 243,660 254,120 Developed Countries 13,960 14,232

2004 6,667,937 6,018,291 3,460,311 2,557,980 384,932 210,264 174,668 264,714 250,363 14,351

Livestock and Production Details: - INDIA 2005 2006 2007 Number of Bovine animals 279.71 277.51 275.29 (million heads) Number of Sheep and Lambs 62.85 63.55 64.27 (million heads) Number of Goat and kids 124.90 125.18 125.45 (million heads) Production of Bovine hides and skins 27.7 23.4 23.3 (million pcs) Production of sheepskins and 31.5 31.9 32.2 lambskins (million pcs) Production of Goatskins and Kidskins 72.0 72.0 72.2 (million pcs) Production of Light Leather from Bovine 650.4 647.2 632.4 animals (mn. Sq.ft) Production of Light Leather from Sheep 610.7 652.5 665.0 and Goats (million sq.ft)

2008 2009 273.11 270.10 64.99 125.73 24.4 32.6 72.3 648.8 655.0 65.33 126.39 25.7 32.8 72.8 NA NA

Export Potential in Leather industry

India is a major exporter of leather and leather products. It accounts for 2 percent of world trade in leather and leather related products and 10 percent of leather raw material available in the world. Leather exports account for 7 percent of Indias export basket. US and some European countries together account for 80 percent of Indias leather products exports. New market being developed includes South Africa, Australia, New Zealand, Canada, Japan, Spain, Portugal, and Saudi Arabia. The notable feature of our export performance is the change that has taken place in the export pattern in favour of high value added items, a development in consonance with the export policy. In the 1960s, exports were more in the form of raw materials. In the early 1980s exports were in the form of finished leathers. And, in the 1990s and beyond the target is in favour of fully fabricated products. Five types of leather products exported from India are Leather Footwear, Footwear Components (Shoe Upper, Soles, etc.), Leather Garments, Leather Goods (including Harness & Saddlery, Leather Gloves, etc.) & Finished Leather. The major customers for Indias export are Germany, USA, Italy, UK, Spain and France. In recent year, Hong Kong has emerged as a large importer of leather. Around 70% of the global imports of leather products are accounted for by Western Europe and North America. USA is the largest importer of all kinds of leather products, accounting for about 25% of the global trade. Germany is the second largest importer of leather products in the world. Italy, Portugal, Spain, Czechoslovakia and Romania are potential competitors from the European region. Though these countries enjoy the advantages of easy access to the West European market, rising labour costs is the limiting factor. However, the former East European countries are trying to consolidate their position slowly. Their unfamiliarity with the market mechanism is their major drawback. In the Asian region, countries like South Korea and Taiwan are still continuing their activity, but in a different style. In view of the high labour costs, they are relocating their production bases and consolidating their hold on the market. The real competitors for India are China, Indonesia, Turkey and Thailand. These countries enjoy favorable labour costs and congenial industrial and investment climate, though they may not have significant raw material base of their own. However, current global trade favours import of hide and skins, and their processing in any part of the world. Countries like Bangladesh, Sri Lanka, Nepal and a few African countries may be future competitors for India. They have consolidated their gain in the tanning sector, and are slowly penetrating the products market. The global market for leather products is estimated at Rs. 2781.4 bn (50.45 Billion Euro). Of the various items, the market for upholstery is growing fast, while the market for leather goods is likely to remain stable.

SWOT Analysis of Indian Leather Industry

SWOT analysis for leather sector based on the information already provided in this section is given below. STRENGTHS Existence of more than sufficient productive capacity in tanning. Easy availability of low cost of labour. Exposure to export markets. Managements with business background become quality and environment conscious. Presence of qualified leather technologists in the field. Comfortable availability of raw materials and other inputs. Massive institutional support for technical services, designing, manpower development and marketing. Exporter-friendly government policies. Tax incentives on machinery by Government. Well-established linkages with buyers in EU and USA.

WEAKNESSES Low level of modernisation and upgradation of technology, and the integration of developed technology is very slow. Low level of labour productivity due to inadequate formal training / unskilled labour. Horizontal growth of tanneries. Less number of organised product manufacturers. Lack of modern finishing facilities for leather. Highly unhygienic environment. Unawareness of international standards by many players as maximum number of leather industries are SMEs. Difficulties in accessing to testing, designing and technical services. Environmental problems.

OPPORTUNITIES Abundant scope to supply finished leather to multinationals setting up shop in India. Growing fashion consciousness globally. Use of information technology and decision support software to help eliminate the length of the production cycle for different products Product diversification - There is lot of scope for diversification into other products,namely, leather garments, goods etc. Growing international and domestic markets.

THREATS Entry of multinationals in domestic market. Stiff competition from other countries.(The performance of global competitors in leather and leather products indicates that there are at least 5 countries viz, China, Indonesia, Thailand, Vietnam and Brazil, which are more competitive than India.) Non- tariff barriers - Developing countries are resorting to more and more non tariff barriers indirectly. Improving quality to adapt the stricter international standards. Fast changing fashion trends are difficult to adapt for the Indian leather industries. Limited scope for mobilising funds through private placements and public issues, as many businesses are family-owned.

SOLING MATERIAL GUIDE AND THEIR PROPERTIES

The adjacent table presents for the shoe technologist the basic properties of most of the solings he or she is likely to encounter. It will be of help in the selection of new or alternative materials. It must be emphasised that the range of solings covered by each polymer type is very wide. This is especially so in the case of solid vulcanised rubber, where types included in the general summary range from inexpensive highly lled soling to premium quality carbon or silica reinforced rubbers. Special purpose, eg oil resistant, compounds are also included. Section 5 explains each property in detail. Section 6 gives notes on adhesion in a separate table. The inside back cover gives guidance on identi cation of the most common types. The notes 1. Wear resistance. The g-ures are 'special c durability' results based on practical wear trials carried out by SATRA. Special c durability is derived from volume loss relative to the SATRA standard reference soling. 2.Hardness.The following arbitrary ranges have been used: Vefy soft <45 IRE-ID Soft 45 - 54IRHD Medium 55 - 74 IRHD Moderately hard 75 - 84 IRHID Hard 85-951RI-ID Very hard >95 IRHD 3. Crack resistance. The purely mechanical forms of tracking are considered here, not cracking due to chemical attack, extreme dryness in the case of leather, etc.