EXPORT & IMPORT

LEATHER EXPORT
WHAT

IS

LEATHER

Leather is a durable and flexible material created via the tanning of putrescible animal
rawhide and skin, primarily cattle hide. It can be produced through different
manufacturing processes, ranging from cottage industry to heavy industry.

TYPES
In General there are 4 leathers in solid form.
Full-grain Top-grain
Corrected-
grain
Split

There are two other types of leather commonly used in specialty products,
such as briefcases, wallets, and luggage:

Bonded leather
By cast leather
CNB
EXPORTS

Artificial Leather

Nappa Leather

Goat Leather

Aniline Leather


Buffalo & Cow
Leather

PVC Leather


Finished Leather...

The leather industry occupies a place of prominence in the Indian
economy in view of its massive potential for employment, growth and
exports.
INDIAN Leather Export Industry
The exports of leather and leather products gained momentum during
the past two decades.
1965-66
1966-99
69558
millions
320
millions
The leather industry has undergone a dramatic
transformation

Policy initiatives taken by the Government of India
since 1973 and 1991

The industry is poised for further growth to achieve
greater share in the global trade.

Apart from a significant foreign exchange
earner, leather industry has tremendous
potential for employment generation.

Tanning & Finishing - 1, 25,000

Chappals & Sandals - 4, 50,000

Leather Goods&Garments-1, 50,000

Structure of the industry
Hides Skins
The leather industry is spread in different segments, namely, tanning & finishing,
footwear & footwear components, leather garments, leather goods including
saddler & harness, etc.

64 million
pieces


166 million
pieces


The major production centers for leather and leather
products are located at Chennai, Ambur, Ranipet,
Vaniyambadi, Trichi, Dindigul in Tamil Nadu, Calcutta in West
Bengal, Kanpur in Uttar Pradesh, Jalandhar in Punjab,
Bangalore in Karnataka, Delhi and Hyderabad in Andhra
Pradesh.


Export Potential

The leather industry, one of the major foreign exchange earners of the
country recorded significant growth since the beginning of the decade

Category

1998-99

Finished Leather

265.2

Leather Footwear

290.2

Footwear Components

243.7

Leather Garments

368.6

Leather Goods

429.0

Saddler and Harness

33.4

Total

1630.1
81520.38
101143
117223.4
110343.2
61570.61
69557.8
0
20000
40000
60000
80000
100000
120000
140000
1993-94 1994-95 1995-96 1996-97 1997-98 1998-99
R
s
.

M
i
l
l
i
o
n

EXPORT OF LEATHER AND LEATHER PRODUCTS

Country

1998-99

Share in total exports in
1998-99

Germany

15462

22.23 %

USA

10826

15.56 %

Italy

8317

11.96 %

UK

9744

14.00 %

France

3240

4.6 %

Spain

3103

4.46 %
COUNTRIES EXPORTING LEATHER FROM INDIA

Russia

1009

1.445 %

Portugal

1240

1.78 %

Australia

1465

2.10 %

Denmark

808

1.16 %

Netherlands

2127

3.06 %

Hong Kong

258

3.25 %

Others

9958

14.32 %

Total

69558

100 %
CNB

EXPORTS

Our company had established a great
market at domestic & national level.



Now company founds that we should
move on over to the international market.



The company is aiming for Germany &
European (EU) to export the mass amount
of leather and leather goods as demand
for leather is high is Germany and so than
in other countries.


Marketing of leather and leather products in Germany & the EU

The leather sector offers a good potential which Indian entrepreneurs can
exploit in Germany and other EU markets
characterized by
ever growing competitiveness in terms of




price and quality, on one hand
and
the environmental considerations, on the other.
Features of
Indian leather export market.

The world's second largest import and export market

A difficult buyers' market with hyper competition and
high expectations

A dynamic multi-faceted market with rapid
technological development and innovations A market
where a considerable amount of buying power is
devoted to satisfying individual needs

A market influenced by the rising average age of the
population and low birth rate

A market where environment awareness and eco-
friendly production becomes more and more a pre-
requisite for successful marketing of products

Major


Leather


Export


Markets

Sales
FRANCE
GERMANY
UK
USA
HONGKONG
ITALY
SPAIN
8%
13%
15%
30%
31%
3%
Composition of Indian leather
exports to Germany (1998-99)
Leather Leather Footwear Footwear Component
Leather Garments Leather Goods Saddlery and Harness
0
20
40
60
80
100
120
Leather Leather
Footwear
Footwear
Component
Leather
Garments
Leather
Goods
Saddlery
and
Harness
28.25
48.86
56.03
109.5
113.2
8.51
M
i
l
l
i
o
n

U
S

$



Export of leather and leather products
to Germany (1998-99)

Market information
through journals and
magazines

Quick Market Assessment


Trade Fairs



Agents


Marketing channels


Recipe for market
intelligence


Environmental aspects for
leather products

Depletion of certain species.
Unsound products
Taboo
Against some casts
Give rise to BLACK MARKETING &
ILLEGAL killing of animals.
Strengths

High Growth

Ready availability of highly
skilled and cheap manpower

Large raw material base

Policy initiatives taken by the
Government

Capability to assimilate new
technologies and handle large
projects

Continuous emphasis on
product development and
design up gradation

Weaknesses

Lack of warehousing support from
the government

International price fluctuation

Huge labour force resulting in high
labour charges

Lack of strong presence in the global
fashion market

Unawareness of international
standards by many players


Opportunities

Rising potential in the
domestic market

Growing fashion
consciousness
globally

Use of information
technology and
decision support
software to help
eliminate the length of
the production cycle
for different products

Use of e-commerce in
direct marketing

Threats

Major part of the industry is unorganised

Limited scope for mobilising funds through
private placements and public issues (many
businesses are family-owned)

Difficulty in obtaining bank loans resulting in
high cost of private borrowing

Stricter international standards

High competition from East European countries
and other Asian countries

Lack of communication facilities and skills


OUR COMPANY ADOPTS THE FOLLOWING
STRATEGY & STEPS AT INTERNATIONAL MARKET.


Make a commitment
to exporting.

Plan, plan, plan.

Conduct research to find the
right market.


Conduct research to find the
right market.
Primary market research
Secondary market research

Devise marketing strategies
for your target market.

Enter the market.
Direct exports
Indirect exporting

Put it into practice.

Team Canada Inc (TCI) helps you along the way.


BARRIERS & DIS-ADVANTAGES OF LEATHER
EXPORT


For Small-and-Medium
Enterprises (SME) with
less than 250
employees, selling
leather goods and
services to foreign
markets seems to be
more difficult than
serving the domestic
market.


The lack of knowledge

Trade regulations

Cultural differences

Different languages and foreign-exchange
situations

Financial management effort: To minimize the
risk of exchange-rate fluctuation

Customer demand: International customers
demand more services from their vendor like
installation and start-up of equipment,
maintenance or more delivery services.

Communication technologies improvement:

Management mistakes: The management might
tap in some of the organizational pitfalls, like poor
selection of overseas agents or distributors or
chaotic global organization.

Challenges

Exporting to foreign countries poses challenges not found in domestic sales.

With domestic sales, manufacturers typically sell to wholesalers or direct to
retailer or even direct to consumers.

When exporting, manufacturers may have to sell to importers who then in
turn sell to wholesalers.

Extra layer(s) in the chain of distribution squeezes margins and manufacturers
may need to offer lower prices to importers than to domestic wholesalers.


Need of CORE MARKETING IN
LEATHER EXPORT


Focuses your efforts on the right markets and opportunities where
you are most likely to win


Forces you to understand your prospects and competitors so you can
differentiate and innovate

Creates a go to market system that optimizes lead generation and
close rates

Develops an operational plan to execute the go to market system


Determines how marketing and sales activities will be tracked,
measured and optimized