Another aspect of the heightened security measures being taken by China (they are expected to be relaxed after the Paralympics) is that many prospective exhibitors and visitors were unable to obtain business visas. A leading multinational chemicals supplier said that he had been unable to get visas for his colleagues in India and Pakistan and as a result had cancelled their proposed regional meeting.
Many others resorted to travelling in on tourist visas as the normal Chinese invitation would no longer suffice and official backing by local authorities also had to be obtained.
Once admission was attained it soon became clear that hide traders were not happy. Hide prices are continuing to fall and they can see no immediate signs of recovery. A leading hide trader told Leather International that he believed we are entering a long term global recession which was unlikely to end before 2010. He had seen two other similar recessions, one in 1991 and the other in the early 80s.
He said there was still a steady market for better quality hides for footwear but upholstery grades were weak. Low grade hides (African) are also weak. Sales can be made in American steers, European bulls, better quality UK and Irish ox and better quality splits which are suitable for velour are ok but this is only a small part of the market. The middle and lower end of the market is suffering.
Overall it is the larger hides for upholstery which are hardest hit. John Gorman, speaking for the Australian Hide Skin & Leather Exporters Association, confirmed that while the hide sector is depressed due to the world situation, skin exporters were faring better as they were in demand for nappa and doubleface. Most of the association’s members were happy with the fair.
As much as 85% of Australian hides, skins and leather go to China making them possibly China’s second biggest supplier at around A$1 billion. Australian exporters are able to capitalize on their clean and green image which is a good selling point. This is an island continent free of disease and their strong quality control makes them a preferred choice.
Hide and skin trader Robert Bachrach of Transhud, Sweden, told us that he used to say that if you lost one customer there would be another one standing on the next corner. Now there is no other customer, and no corner! He has always been known for his dry sense of humour.
Many felt that the fair was quieter than last year but when we spoke to a US chemicals exhibitor, he told us that as he hadn’t attended last year in person as far as he was concerned the fair had grown (from 2006) and he was very pleased with what he saw as a healthy show. There were other exhibitors who said they had experienced a better show than last year and Pittards said they had a great show and even wrote orders.
Others, such as a Turkish chemicals supplier, were well satisfied and had seen all the people they hoped to. Despite this, he still felt it might be as late as 2011 before the market corrects itself.
Heim were celebrating their first anniversary. They made their debut at last year’s ACLE and announced that they had launched their new website: www.heimleather.com to keep customers up to date with their news.
One of the few surviving Spanish tanners spoke of competitors who were closed or dwindling down to nothing and said he believed that for Spain the pain could continue for another ten years. Whether he himself will survive he said is down to continually reinventing his company, finding innovative processes and products. If he reaches the stage where he can no longer do this, then he too will have to close.
The ability to adapt to changing circumstances is paramount. Nigel Payne of Forestal Mimosa, said the market for mimosa has slowed. When shoe manufacturing slowed dramatically some manufacturers in China switched production to knee high boots. Mimosa extracts are ideal for adding the necessary substance to the leathers to keep them standing tall so business was good. Now bag and shoe making is recovering and the market for long boots is at an end… for the time being. Oh the vagaries of fashion!
China is still recognised as the biggest and most important market and this is not expected to change. The spectacular growth period, however, is well and truly over and the writing has been on the wall since China changed its vat and import/ export duty laws. The new reality for the leather and allied industries in China is still in formation and we will have to wait and see where it settles.
With the exception of the hide traders, everyone we spoke to was bemoaning the fact that they are having to raise prices at a time when business is tough enough. All costs have escalated: raw materials, energy, all forms of transport including shipping etc.
Much has been said and written about the need to tackle environmental pollution. But it doesn’t end there. China is also confronting a lack of sufficient water for its population as well as energy shortages. This does not bode well for industries seen as either polluting or huge water consumers.
