APLF and theSauerReport to address hide market issues
26 March 2009According to Ron Sauer the leather industry is facing a chronic over-supply of raw materials, which may have a dangerous impact on the market. The situation is likely to get worse - certainly in the near future and is also likely in the medium to longer term.
The hide market crash is a ripple effect caused by the global economic crisis: plummeting sales in the automobile and household furniture sectors, both big leather consumers, caused a radical decline in demand for animal skins. A similar trend has followed in other leather articles like apparel, small leathergoods and footwear according to the press release issued by organisers of the APLF.
So, what is being done to address the situation? theSauerReport is co-organising a brainstorming session with the APLF in Hong Kong next week, where top industry professionals will exchange ideas, experiences and solutions.
The seminar will address concerns such as:
- how the industry will deal with the lowest raw material prices ever seen and what to do with the worldwide surplus of raw material
- how to resolve all the financial and contractual problems that the crisis has already caused
- how consumer demand will develop
The Hide Market Crash: Implications on the Leather Industry
This primary cause of the problem today is disparity in supply and demand. Hides and skins are available in only very slightly lower numbers but demand for leather may be down as much as 30-40% over all.
‘The leather industry has no control over the supply of its raw material. As long as there is a demand for meat - and there is, in spite of the crisis, hides and skins, a byproduct, are produced in hundreds of thousands, every day', says Ron Sauer, founder of theSauerReport.
Cattle hides, which are the source of 70% of global leather production, have lost about 50% of their value since October 2008. Tanners saw their orders reduced tremendously by the reduced demand for the final products.
Businesses now are trying to survive in midst of chaos. Orders were cancelled or renegotiated at much lower prices, shipments and payments were delayed, factories closed, workers made jobless, essential credits cancelled and reduced.
The leather industry is facing serious and dangerous challenges ahead. The seminar aims to help the industry to address these problems together?
Seminar Information
When: Thursday, 2 April, 10:30am to 12:30pm
Where: Room 607 Hong Kong Convention and Exhibition Centre
Note: This is a 'free-to-enter' event but those wishing to attend must register first.
