Leather sector to take on competition via technology

Updated: Jan 26 2002, 05:30am hrs
Leather research institutes and industry associations which together formulate the policies for leather trade, are shifting their focus to marketing and competitive advantage through technology upgradation.

Being the home of 10 per cent of the world resources, both raw material and skilled manpower, India should have at least a similar share in the global trade ranging around $68-70 billion. However, India’s highest export achievement is $2 billion and it is unlikely to cross this immediately.

The leather industry, as a whole, has a turnover of Rs 20,000 crore. Almost 50 per cent of it is from the domestic market.

The present approach of the policy makers is that raw material base alone will not ensure market share as the dynamics in the global market place are different and are driven by technology, quality and cost.

‘‘If India wants to emerge a major player in global leather trade, a transformation of the mindset from selling to marketing in the leather industry is of paramount importance. India has a vision. What is needed is strategic action and implementation with conviction,’’ says Central Leather Research Institute (CLRI) director Dr T Ramasami.

The 36th Leather Research Industry Get-together (LERIG) beginning here on January 27 as a prelude to the India International Leather Fair on January 31, has as its theme Technology Export Marketing Plan for Leather Sector (TEMPLES).

The planners have two models before them to work on, the Italian and Chinese. Italian industry is dominated by small and medium enterprises but has brand image and quality. Being small, they are flexible and easily adjustable to changing fashions and demands.

China is known for its mass production and massive productivity catering to volume markets where cost is the key factor. But both the countries have similar share in the global market at around $15 billion. With an import content of $6 billion, the net exports are worth $9 billion each.

Taking advantage of both these approaches, India can opt for multiple strategies with some segment concentrating on quality and brands while others concentrating on volume markets without crossing the borderlines lest both should lose ultimately.