Term Project: Leather Industry Report
Hira Azam Modan
Instructor: Ms. Amber Imtiaz
Institute of Business Administration
TABLE OF CONTENTS
* Introduction to the Industry2
a. Introduction & History2
b. Brief Process of Making leather4
c. Structural Analysis5
1. Finished Leather6
2. Leather Garments8
3. Leather Gloves10
4. Leather Footwear12
5. Leather Goods14
d. Exports & Imports trends15
e. Leather Associations & Key Players19
f. Company profile-hub leather23
* Analysis of the industry
a. Demand & Supply conditions25
b. Factor Conditions32
c. SWOT Analysis36
d. Porter’s Competitive Forces41
e. Issues and Concerns45
f. Critical Success Factors48
g. Comparison with China and India51
* Future Outlook56
INTRODUCTION TO THE INDUSTRY
Leather is a material created through the tanning of hides, pelts and skins of animals, primarily cows. Leather was a very important clothing material, and its other uses were legion. Leatherworking is one of the oldest crafts known to humankind. The first leather objects were primarily functional, but people soon learned the decorative potential of the material. The timeless appeal of leather lies in its luxurious texture, warm color, wholesome aroma, and exceptional durability. The world's love affair with fine leather continues to be influenced as much by its appeal as a status symbol as by its utilitarian value.
Pakistan is well known in the world for its high quality and wide range of finished leather, garments, gloves and sports goods. The leather industry in Pakistan is the 2nd largest foreign exchange earner after textile and occupies an important place in Pakistan’s economy. It provides employment opportunities for about 250,000 workers. The investment in this industry is nearly Rs. 5000 million. The local market for leather is limited and around 80% of production is exported. During 2003-2004, the total exports of leather and leather manufacturers stood at US$ 744 million, an increase by 7.11% and about US$ 29 million more than the export target fixed by the Government. The leather sector has grown by 39% during the last fiscal year.
Major buyers of Pakistani leather are Honk Kong, Italy, Spain, Portugal, South Korea, Germany, France, UK, USA and Dubai etc.
HISTORY OF LEATHER INDUSTRY IN PAKISTAN
After the separation of East Pakistan, several industries were adversely affected and our Leather industry was one of them, but over the time span, it has been able to create a firm position for itself in the world leather market and made the most of what resources it had.
The leather sector has passed through four phases before reaching its present status. During the first phase, 1947 till 1950’s, the industry remained stagnant. During that period raw hides and skins were exported, and provided vegetable leather sole to the local market, methods of production were primitive and limited number of small tanneries were set up in Multan and Lahore.
During the second phase, 1960-70, in that era of general economic development the leather industry also benefited and two new tanneries were set up, which started using raw hides and skins otherwise exported, in the production of pickled, wet blue and vegetable tanned leather for exports. During this phase, semi-finished leather was produced and exported.
In the third phase, the industry started producing partly crust/dyed and partly finished leather. During 1970-80, about 78% of the total leather export consisted of finished and semi-finished leather.
The forth phase of the industry,...