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Jalandhar leather units on the brink of closure

Ashish Sharma  |  New Delhi/ Jalandhar 

The city's famous leather units are on the verge of closure due to multiple crises they are facing like stiff competition from Chinese products, shortages of quality hide, and the growing popularity of synthetic leather.
They are disappointed that the February 28 Budget did not do much to enthuse the leather industry,
The absence of incentives has not only deterred major leather goods manufacturers from entering the state but has also forced the existing units in the state to either migrate or think of other options.
Problems of the leather industry have got multiplied due to alleged apathy of the state government also as be it shortage of quality hides or providing basic facility to the industrialists, the government was least bothered to give any heed to the problems.
"Volume production strategy implemented by china has done a huge damage to the business here which could be seen in decreasing orders. A unit in Jalandhar on an average at its peak capacity manufacturers 500 to 600 leather garments per day whereas 20,000 pieces a day is the order of the day in china. Compare a leather footwear in Jalandhar that produces 4000 to 5000 foot wears which is nominal in comparison to Chinese manufacturers which produce over one lakh per day" A prominent leather goods manufacturer of the city, who had travelled extensively in china revealed.
"China has flooded with international market and market indices are favourably inclined in its favour as it has supplied 200 per cent more goods in the market than what the demand actually is and thus they have turned the market indices in its favour" he claimed.
The ambitious plan of the government to develop Jalandhar as a leather township has fallen flat as no major leather goods manufacturer has come to Jalandhar in last five years but rather some of the famous industries like Bawa Shoe Company, manufacturer of "Lotus Bawa" shoes has already closed its plant in the city to shift it to the Baddi in Himachal Pradesh, where the industry was getting several benefits apart from the special tax holiday.
According to sources, against a target of setting up 108 tanneries in the leather complex, just 46 are presently operational whereas the plan to set up 120 fabrication units has failed to take off as not a single fabrication unit from outside the state has come to the leather complex.
Ajay Sharma, Executive Member, leather Goods Promotion Council said that due to prevailing social and political pressures, the leather industry in Punjab has to contend with the shortage of quality hide and sins despite the fact that Punjab has second highest number of cattle heads after Uttar Pradesh.
Ironically, with just one organized slaughterhouse operation at Derrabassi, a large numbers of animals are taken outside the state (Uttar Pradesh and Delhi) for slaughtering.
"Past one decade has seen marked decline in the quality and quantity of raw hides and skins available to the leather industry," says Ashok Sharma, member of the Council of Leather Exports, Jalandhar.
Also the slaughtering of cattle and buffaloes banned in the state, most of the hides and skins received in the market come from carcasses of animals, which die due to old age or other ailments, industry sources said adding that apart from this, leather has also been defective because of pets like ticks, pox, scabies and flay cuts due to unprofessional flaying (skinning).
"Past one decade has seen marked decline in the quality and quantity of raw hides and skins that are available to the leather industry. More than 75 per cent of the raw material is of rejection, grade, though the defects could be easily eradicated" says Ashok Sharma, member of the Council of Leather Exports (CLE), Jalandhar.
The synthetic has now taken over the original as the natural leather industry of Punjab has been hit hard by its imitation resulting in negative growth with each passing day.
The market share of synthetic leather is increased to almost more than 30 per cent mainly due to lack of awareness among buyers regarding the features of original leather resulting in a negative impact on the growth of leather industry in the region.
The industry in the region complains that synthetic leather is imported from China and Taiwan. And, now within the region also many industries have shifted to the trading or manufacturing of synthetic leather, which is killing the leather industry in Punjab.
Sharma revealed, "The total market of genuine leather is four billion U S Dollar and 50 per cent of the leather is supplied in the domestic market. But in the past two years, there has been no growth in the sector. Apart from this decline of 30 per cent had been observed in the garment sector and stagnant growth in the footwear sector".
This clearly signifies negative growth in natural leather industry due to increasing market share of synthetic leather, he complained.
Sanjeev Gupta, Director, Oscar Leathers, a Punjab based company, said that people in the country are not aware of the synthetic leather.
Apart from this, there are no strict rules and regulations in our country to stop the import of synthetic leather that can also be harmful to health, he added.

First Published: Thu, June 01 2006. 00:00 IST