The nearly Rs 12,000 crore finished leather industry in Kanpur is facing almost 50% losses owing to the closure of about 250 leather tanneries over the past four months, forcing some of the units to shift to Kolkata in West Bengal.
However, even after the culmination of Kumbh, nearly 90% of the tanneries in Kanpur have still not started functioning since the state green watchdog UP Pollution Control Board (UPPCB) has not issued the necessary clearances, allege tannery owners.
In the meantime, some players are looking to expand their operations to West Bengal and about a dozen of them have already received the allotment letters by the West Bengal government for setting up their units.
While the Kanpur leather industry is staring at uncertainty, the domestic finished leather space is witnessing a severe beating in export volumes even as other leather segments continue to grow. Finished leather commands the third largest share of 14% in the broader leather industry sphere, which is topped by leather footwear and leather goods at 38% and 25% respectively.
“The tanneries had started to shut from November 18 onwards and it has been more than 4 months now that this industry has virtually come to a standstill,” Small Tanners’ Association member Nayyar Jamal told Business Standard adding he had even met UP chief minister Yogi Adityanath seeking relief, yet no respite was in sight.
The price of raw hide has also dwindled by more than 60% from Rs 2,000 a piece to about Rs 700 a piece over the past few months, since processing has virtually stopped November 15 onwards, he lamented. Since, the raw hide is now being sent to other places, mainly Kolkata, the prices of the commodity had even crashed in the Kolkata market to Rs 500 a piece or even less, Mohd Ibrar, managing director of Kolkata-based Adiba Leather said over telephone. This is because in Kolkata, supply has increased beyond processing capacities.
Council for leather exports (CLE) central region chairman Javed Iqbal said the drop in the domestic finished leather space was largely owing to the shutdown of tanneries in Kanpur, which was among the major leather processing hubs in India apart from Jalandhar, Kolkata, Chennai and others.
Former CLE chairman and leading Kanpur-based leather exporter Mukhtarul Amin said the buyers have already started looking to other markets, such as Brazil, Bangladesh and Thailand, especially with regards to heavy buffalo processed leather for which Kanpur is famous for.
“We are in touch with the state government authorities, chief secretary and the pollution department in this regard and hope things get sorted out soon,” he said, adding the Kanpur industry would book loss of almost Rs 6,000 crore due to this indefinite closure, especially in the Jajmau industrial area, where most of the units are located.
“The closure continues to bleed the tanneries heavily and most of them are already financially drained,” he lamented, adding that fund constraints of the tanners would also prohibit their expansion to other places.
Kanpur leather cluster, which also includes the adjacent Unnao district, is estimated at Rs 12,000 crore, including Rs 6,000 crore worth of exports to the Gulf, Europe, China, Iran and other countries. It provides direct and indirect livelihood to almost a million people, including 200,000 directly.
Meanwhile, UP MSME minister Satyadev Pachauri, who has also been fielded by the ruling Bharatiya Janata Party (BJP) from Kanpur parliamentary constituency, maintained the state government would not compromise on the issue of pollution in Ganga. “The leather industry will have to follow the pollution control norms and regulations now.”
UP comprises three major leather industry hubs viz. Kanpur-Unnao, Agra and Noida. Of the Rs 20,000 crore worth of annual UP leather industry, about 50% is accounted for by the export market. The state accounts for almost a third of India’s annual leather trade and exports.
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