Introduction
I) The leather industry occupies a place of prominence in the Indian economy in view of its
massive potential for employment, growth and exports. There has been an increasing
emphasis on its planned development, aimed at optimum utilization of available raw
materials for maximizing the returns, particularly from exports. The exports of leather and
leather products gained momentum during the past two decades.
II) There has been a phenomenal growth in exports from Rs.320 million in the year 1965-66
to Rs.69558 million in 1996-97. Indian leather industry today has attained well merited
recognition in international markets besides occupying a
prominent place among the top seven foreign exchange earners of the country.
III) The leather industry has undergone a dramatic transformation from a mere exporter of
raw materials in the sixties to that of value added finished products in the nineties. Policy
initiatives taken by the Government of India since 1973 have been instrumental to such a
transformation. In the wake of globalization of Indian economy supported with liberalized
economic and trade policies since 1991, the industry is poised for further growth to achieve
greater share in the global trade.
I) Items produced by this sector include, in addition to bags, handbags, hand gloves and
industrial gloves, wallets, ruck sacks, folios, brief cases, travel ware, belts, sports goods,
upholstery and saddlery goods.
II) A surfeit of modern units in Chennai, Kanpur and Calcutta employing skilled human
resources and equipped with modern and sophisticated machinery account for a diversified
range of superlative small leather goods including bags, purses, wallets, industrial gloves etc.
made of quality leathers of cows, sheep, goats and buffaloes. The products meet the
requirement of bulk buyers and consumers in Europe, USA and Australia.
III) The major market for Indian leather goods is Germany, with an off take of about 25 per
cent of the leather goods produced in India followed by USA, UK, France and Italy. With
products ranging from designer collections to personal leather accessories, this sector has a
share of 20.53 per cent in the leather industry, while maintaining an average growth rate of 11
per cent recorded in the last five years.
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3. SWOT Analysis of Indian Leather Industry
I) STRENGTHS
II) WEAKNESSES
III) OPPORTUNITIES
IV) THREATS
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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.
I) Footwear Components
Shoes: 100 million pairs
Leather shoe uppers: 78 million pairs
Non-leather shoes/chappals etc.: 125 million pairs
Leather Garments: 6 million pieces
Leather Products: 70 million pieces
Industrial Gloves: 40 million pairs
Saddlery : 6000 pieces
II) The major production centres for leather and leather products are located at Chennai,
Ambur, Ranipet, Vaniyambadi, Trichi, Dindigul in TamilNadu, Calcutta in West Bengal,
Kanpur in Uttar Pradesh, Jalandhar in Punjab, Bangalore in Karnataka, Delhi and Hyderabad in
Andhra Pradesh.
5. The Most Important Stages Of The Leather Production And Supply Chain Management
Process:
2. Soaking
The skin is soaked to remove dirt and salt.
3. De-Fleshing
During this process tissue, flesh and fat remnants are
removed by a roller mounted knife
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4. Liming
By adding lime and sulphur compound the hair is
removed from the skin.
6. Samming
During this process water is removed.
7. Splitting
In order to achieve an even specified thickness the
leather is reduced in substance. The resulting split-
leather can than be processed further as suede.
8. Skiving
The grain leather is brought to an even thickness.
Irregularities are removed from the reverse side and the
leather is separated into colour-batches.
9. Sorting
The leather is sorted into various quality grades.
11. Drying
Two methods are used to dry leather. The vacuum
process during which moisture is removed by suction
and the hanging process, when leather is hung and taken
through ovens.
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12. Staking
Following drying the leather is mechanically staked in
order to soften it. Further processes take place in
preparation for finishing.
13. Finishing
Here the leather is given its final surface treatment and
look. Through processes of base coat, colouring,
embossing, ironing the leather becomes, depending on
the demands of fashion, matt or shiny, two-tone or uni-
coloured, smooth or grained. The art of finishing lies in
working in wafer-thin layers without disturbing the
natural look of the leather and its characteristics such as
suppleness and breathability.
15. Despatch
The leather is measured electronically, wrapped and
despatched.
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Diagram 2 - Processing, usage of IT and Marketing in conversion of leather into
footwear.
6. Literature survey
I) The leather industry occupies a place of prominence in the Indian economy in view of its
massive potential for employment, growth and exports. There has been an increasing
emphasis on its planned development, aimed at optimum utilization of available raw
materials for maximizing the returns, particularly from exports. The exports of leather and
leather products gained momentum during the past two decades. There has been a
phenomenal growth in exports from Rs.320 million in the year 1965-66 to Rs.69558 million
in 1996-97.
II) Indian leather industry today has attained well merited recognition in international markets
besides occupying a prominent place among the top seven foreign exchange earners of
country.
III) The leather industry has undergone a dramatic transformation from a mere exporter of
raw materials in the sixties to that of value added finished products in the nineties. Policy
initiatives taken by the Government of India since 1973 have been instrumental to such a
transformation. In the wake of globalization of Indian economy supported with liberalised
economic and trade policies since 1991, the industry is poised for further growth to achieve
greater share in the global trade.
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Diagram 3- Footwear value creation
IV) Apart from a significant foreign exchange earner, leather industry has tremendous
potential for employment generation. Direct and indirect employment of the industry is
around 2 million. The skilled and semi-skilled workers constitute nearly 50% of the total
work force.
II) A surfeit of modern units in Chennai, Kanpur and Calcutta employing skilled human
resources and equipped with modern and sophisticated machinery account for a diversified
range of superlative small leather goods including bags, purses, wallets, industrial gloves etc.
made of quality leathers of cows, sheep, goats and buffaloes. The products meet the
requirement of bulk buyers and consumers in Europe, USA and Australia.
III) The major market for Indian leather goods is Germany, with an off take of about 25 per
cent of the leather goods produced in India followed by USA, UK,France and Italy. With
products ranging from designer collections to personal leather accessories, this sector has a
share of 20.53 per cent in the leather industry, while maintaining an average growth rate of 11
per cent recorded in the last five years.
Chart 1 - India’s Footwear Export Growth over the last Four Decades
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Footwear export has increased from US$40.15 million in 1977-78 to US$ 1475.83 million in
2007-08
8. Export Trends
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I) If the Indian economy grows at the same pace, India would most definitely export goods
worth US $500 billion by 2013 and may supersede the exports of other large developing
countries like Brazil. The Way Ahead India needs the right mix of policy formulation sector
focus and industry led initiatives to move up the value chain in the global export basket.
II) It is very clear that Indian exports have still not achieved their true potential and there exists
immense opportunities for expanding the basket of India’s exports. With a strategic attention on
the new markets that are evolving due to free trade, India is witnessing a boom in both
manufacturing and services.
• Punihani International
• R SL Industries Ltd.
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10. Contributions
Khushboo P Shah
6 Literature survey
(10MBA0023)
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11. References
http://www.supplychainbrain.com/content/sponsored-channels/weber-logistics-third-party-
logistics/single-article-page/article/leather-goods-maker-buxton-awards-weber-three-year-
storage-and-distribution-contract-1/
http://www.euroleather.com/process.htm
http://footwearsinfoline.tripod.com/leather_swot_analysis.htm
http://www.clri.org/
http://www.toeholdindia.com.
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