Leather exports stagnant at $1 billion for five years

Tanners say Pakistan trailing all regional countries.

LAHORE:

Contrary to the huge potential of leather products, exports of the leather industry have remained stagnant at $1 billion for the last five years, says a top industry man, insisting that just a bit of support from the Ministry of Commerce can push exports to $3 billion in three years and make the industry the second biggest after textile.

“Leather quality of Pakistan is second only to Italy, but its exports of leather products are static, in fact they have declined in the financial year 2011-12,” said Pakistan Tanners Association Chairman Agha Saiddain while talking to The Express Tribune.

Citing growth of other countries, he said, exports of India’s leather industry grew to $4.86 billion in 2011–12 from around $1.96 billion per annum in the 1990s. Bangladesh’s exports of leather products have increased by 17% and Ethiopia’s exports have doubled in the last three years.

“All countries including China have recorded growth in exports of leather and its products and the only country lagging behind is Pakistan,” he remarked.

Globally, the imports of leather and its products rose from $80.2 billion in 2001 to $137.96 billion in 2010. According to Saiddain, though South Asia accounts for 26% of the global population of cattle, buffalo, sheep and goat, it has only a 3.57% share in global exports. On the other hand, Vietnam alone enjoyed 6.22% of global leather exports with bare minimum animal population compared to India, Pakistan and Bangladesh, he said.

With limited animal population, Italy also enjoys a 13% share in the global market. However, most prominent among them is China, which has a huge 37.5% global market share in leather trade.

“One reason for this excellent performance of China is value addition of 29% in the industry compared to 18% in South Asia,” Saiddain said.

He insisted that after Italy, Pakistan was still leading in leather products both in terms of technology and quality and all the industry needed was government’s support and incentives.

India, Bangladesh and China offered duty drawback and other incentives to their leather industries, which were much better than Pakistan, he said.

“All other governments, except ours, understand that leather is one of the most important sectors, which provides wider benefits because of its role in job creation, linkage to agriculture and rural economy, poverty alleviation and foreign exchange earnings.”

Saiddain asked the commerce ministry to study the incentives given by India, Bangladesh and China and provide a level playing field for Pakistani leather products.

“There is a dire need to change our policies and tune these to the policies of our competitors,” he stressed and asked the government to sit with industry stakeholders, particularly the exporters, to draw up a viable plan for giving a boost to exports.

Published in The Express Tribune, October 7^th, 2012.