Leather industry takes off23 March 2006
With exports of tanned leather, leather garments and leathergoods to the tune of US$950 million in the year to June 2005, the total production of leather has gone up to around $700 million. Muhammad Naseem Shafi, managing director of the Shafi Group, said that the export of tanned leather, according to the Department of Statistics, is $304 million for the year July 2004 to June 2005. There were also $639 million worth of leather garments, leather gloves and leather products sold overseas. This means that leather worth about $400 million has been consumed for the manufacture of these items. In a bold business move, the Shafi Group have undertaken the production of finished leather in China on a contract basis under their own technical know-how and personal professional skill. This is the only tannery in Pakistan which so far aims to supply finished leather to their Far East customers by producing it locally. Shafi said: 'We have sent out technicians from Pakistan with a good know-how of tanning leather. We purchase wet-blue and crust and give these to local tanners for finishing on a job basis.' He said that they had been working in this way for the past two years through sub-contractors and supply around 25,000 pieces per month of finished leather. According to Shafi: 'Our goat leather is used by the shoe industry for uppers and lining.' He said that the European industry had shrunk. 'With this situation, our exports of tanned leather have dropped both in France and Germany. 'I cannot say that there is a shortage of leather for us. The production of tanned leather has increased with the expansion of various tanneries. If we see the exports record during the last ten years, there has been a steady development of the leather industry that would naturally increase the demand for more raw hides and skins for the industry. 'At present we are importing wet-blue from India, Türkiye, Saudi Arabia, Indonesia and Bangladesh. For wet-blue from Saudi Arabia, we face little problem. Live cattle are also imported from there. 'The technique of processing wet-blue varies with the quality of various skins and hides. The chemicals are changed with the quality of raw skins. Bovine wet-blue is imported from Ukraine, Türkiye, Russia, USA, Brazil and European countries. 'The wet-blue from Kenya, Sudan and Uganda is used for low-grade garments. Sheepskin from Iran is used for costly garments. Cheap shoes from China have created problems for the local shoe industries of India, Pakistan and Bangladesh.' Replying to a question as to why the leather magnates have shifted to the textile industry instead of the shoe industry, Shafi said that in Pakistan the infrastructure for producing shoes has not yet been fully developed. The shoe industry needs footwear components for which Pakistan needs to have a developed industry. 'For the development of the leather industry, we should have a Leather Export Council like in India with an elected chairman and a secretary with the rank of joint secretary for maintaining a liaison with the Ministry of Commerce and Industry and with some allocated funds from the Export Development Fund. This council should have allocated funds according to our requirements.' Shafi pointed out that in India, the Ministry of Commerce has allocated considerable financial assistance in the form of a grant under the auspices of the Integrated Development for Leather Sector programme for modernisation. The Pakistan government levies a charge of 0.25% on all exports for the Export Development Fund. He said that the flagship company of the group, Muhammad Shafi Tanneries (Private) Limited, produce about two million sq ft of goatskin leather per month from raw to finished and may well be the biggest tannery in the world for this type of production. The Shafi Group includes seven manufacturing units in the leather sector including four tanneries, two leather garment units, one footwear unit and one unit producing speciality chemicals: * Muhammad Shafi Tanneries (Pvt) Ltd, Karachi (tanning goatskins) * Siddiq Leather Works (Pvt) Ltd, Lahore (tanning bovine) * M Muhammad Shafi & Company, Karachi * Motif Leather Works, Karachi (producing fashion leather garments) * Hafeez Shafi Tanneries (Pvt) Ltd, Lahore (tanning division) * Hafeez Shafi Tanneries (Pvt) Ltd, Lahore (garment division) * Shafi (Pvt) Ltd, Lahore (producing footwear) * Shafi Reso Chem, Lahore (speciality chemicals production) In an interview with Leather International, Muhammad Mussadiq, director of Siddiq Leather Works Ltd, said that the Pakistan leather industry has a bright future because of the changing global situation, as imports of raw skins and wet-blue are duty free. He said Pakistan is a country with good quality raw material in bovine, sheep and goat. In addition imports of hides without duty from all over the world are increasing. These are then processed into finished leather with traditional skills. He believes that the demand within the country is improving with respect to good quality leather shoes. Regarding environmental issues, the progress in Pakistan and Punjab is progressing with the assistance of the Dutch government. All tanneries are being surveyed with respect to production planning and effluent discharge. This is being carried out systematically with the expert help of consulting company NEC (National Environment Consultant) in Lahore. Most of the big tanneries are already operating primary treatment plants and in some tanneries secondary treatment plants have also been commissioned. Siddiq Leather Works are leading manufacturers and exporters of cow calf and buff calf finished leather for shoes, garments, leathergoods and upholstery. Part of the Shafi Group, Siddiq have a production capacity of 1.6 million sq ft per month and export to more than 40 countries around the globe including Vietnam, China, Malaysia, Türkiye, Spain, Portugal, Japan, Thailand, Korea and many more. Siddiq are an ISO 9000 & 14000 certified company, having an up-to-date effluent treatment plant to protect the environment. The research and development department at SLW is focused on creating the best new leather articles and colours as per customer requirements. Some stalwarts of the Pakistan leather industry believe it is necessary to import foreign technicians who can help Pakistani tanners to produce fashion leather which is in much demand in Europe and America. S M Naseem, managing director of M Ismail M Aslam Limited and Farukh H Shaikh of Hub Leather (Pvt) Ltd, a sister concern of MIMA, and Rashid Arshad Zahoor of Noor Leather Garments, told a local TV panel that Pakistan will be facing a shortage of raw materials in the near future. This is in spite of the fact that throughout Pakistan, more than Rs10 billion worth of animals were sacrificed during this Eid. The shortage of cows and bulls were made up through imports of animals from India through Rajisthan. Cows cannot be sacrificed in India so they push them to Pakistan. Pakistan is number one in south Asia for producing classic leather but cannot cope with the demands of fashion leather which mostly comes from Europe. European importers tend to want immediate shipment of fashion leather on an urgent basis. Two years previously the government made it possible for tanners to import some technicians from Korea where Pakistani garments were in demand at that time and where the requisite skills were available. Now leather producers would like technicians from Europe, preferably from Italy. The leather institute, run by the Pakistan Tanners Association (PTA), is training students for elementary work in the tanning industry, but to produce leather for fashion garments is a more sophisticated job for which the technicians from the European tanneries are more suited. Visiting Karachi for the first time, Ms Delia Heneghan, director, international office, University of Northampton, UK, interviewed the students who want to take up admission at the University which includes the British School of Leather Technology. In Pakistan there are about two dozen students who hold degrees in leather technology from Northampton University. Of these, most are relatives of the proprietors of tanneries since the difference in the standards of living between the two countries makes it difficult for middle class students, even of a high education, to be able to afford such expenditure. Effluent treatment The Combined Effluent Treatment Plant in Karachi, the first of its kind in the country, has been installed with the total capital cost of Rs492 million. It is now reported to be ready to function and is capable of treating 43,000 cubic meters per day of the liquid and solid waste coming from the tanneries plus domestic waste from the Korangi Industrial Area. President General Pervez Musharraf is expected to inaugurate the plant in March. The plant has been established to benefit the tanning community of the Korangi area and the general public by providing an optimal system for conveyance, treatment and disposal of tannery effluents, sludge and solid waste; improving working conditions within tanneries and reducing health hazards in the area; transforming the Korangi tannery cluster into an environment-friendly group and helping in improving image of Pakistani leather and leather products in the international market. Gulzar Feroz, president of Pakistan Tanneries Association (SZ) Environmental Society, told Leather International that the PTA had long recognised the need for controlling environmental pollution. The scope of the project has six components, ie setting up a combined effluent treatment plant (CETP), up-grading the effluent collection and conveyance system, provision of pre-treatment facilities in tanneries and in-house improvements, installation of chromium recovery and recycling plants in tanneries, setting up a solid waste management programme and an occupational health and safety programme. The plant is based on Up-flow Anaerobic Sludge Blanket (UASB) technology, having the lowest operational and maintenance cost. It is spread over 15 acres and would cater for the requirements of 170 tanneries. The plant will have a capacity to treat a total of 4,300m3 per day of tannery plus domestic wastewater. The construction of a CETP started in February 2001. The project includes more than 12 kilometres of collection and conveyance to bring in the tannery effluents from sector 7-A, 8-A, 15 and 17 of the Korangi area to the CETP. The existing practice of discharging the effluent into storm water drains will be discontinued after the plant comes into operation. A conveyance system will also be built to bring the domestic sewage from pumping station-II (PS-2) of the Karachi Water & Sewerage Board located within the Korangi Industrial Area. The work under this component of the project is being implemented and and is said to be proceeding at a satisfactory pace. The installation of a Chromium Recovery and Reuse Plant (CRRP) within the tanneries is the only option to control the chromium content in the effluent. Therefore, the project envisages the construction of CRRPs for all large and medium-sized tanneries. The implementation of this component is in progress and some of the tanneries in the area have already installed a CRRP while a few of them have even begun the process. The Solid Waste Management (SWM) programme is planned to make the tannery zone cleaner and improve working conditions within the area. The project has undertaken SWM as one of its components. A total of 19 specially designed RCC waste bins have been constructed in the entire Sector 7-A of the Korangi Industrial Area. The project vehicles would dispose of around 500 to 800 metric tons of solid waste each month from the tannery zone. The removal of the sludge deposited in the existing storm water drain is also a part of this component. The capital cost of the project is estimated at Rs492 million. The government of Pakistan is mainly financing the project through the Export Promotion Fund (EPF), while the tanners are also generating their share towards the cost and the government of the Netherlands is providing a technical assistance grant for the design of the project. The Sindh government is also contributing in the form of sharing in the cost of the land. The total financial plan comprises Rs334 million from the EPF, Rs96 million from the PTA, Rs40 million from the government of the Netherlands and Rs22 million from the Sindh government/City District government Karachi. In Punjab, the chairman of the Pakistan Tanners Association, North Zone, Khurshid Alam told the governor of the Punjab, that the PTA, with the assistance of Royal Netherlands Embassy, had also set up a modern laboratory of environmental sciences in the Asian region. They are also in negotiations with the BLC to gain recognition for tests being performed in the laboratory. In its report, the World Bank has applauded the PTA's efforts for ensuring an environment-friendly atmosphere. Complaining about the disposal of sold waste, he said about 70% of hides and skins come out of the process of sold waste that contained salt, chromium and sludge from treatment plants that might cause a hazard if it was not taken care of properly. He called for the designation of a 'landfill site' close to the tanning clusters along the Lahore-Sheikhapura Road, GT Road, Ferozepur Road and in the cities of Multan, Sahiwal, Sialkot and Kasur. He also demanded assistance from the Export Development Fund to meet requirements under the National Environmental Quality Standard. He also wants to see the upgrading of the Vocational Training Institute Gujranwala and degree awarding institute so that skilled manpower could be made available for the leather industry. He is calling for a 6% rebate for the leather industry for carrying out research and development as in the textile industry, improvement of Ferozepur Road conditions, concession on three toll plazas within 35 kilometers on the Sheikhupura Road extension in time for the consumption of old stocks for the purpose of sales tax exemption, downward revision of gas tariffs and provision of interest-free loans up to Rs2 million for the purchase of an industrial plot in the Multan industrial estate. Taking into account the press reports that the discharge of poisonous effluent from factories to the sea had caused the death of a large number of fish, Sindh Environment Adviser Noman Saigal has told tanneries and other chemical industries to stop work immediately. He was visiting Ibrahim Hyderi and other areas along the coast where huge stocks of dead fish were washed ashore. Saigal has directed the officials of the Environmental Protection Agency to issue notices with immediate effect to the tanneries and other chemical factories to stop discharging poisonous chemicals forthwith and install treatment plants in 15 days. Otherwise, he said, they would face legal action and their pipelines would be removed. 'In the case of violation of the environmental laws, the factories could be sealed off as well', he warned.