The state of Rio Grande do Sul (RGS) in the south of Brazil has traditionally been the heart of the country’s leather industry. However, leather exports from the state plummeted by 17% in the first 9 months of this year by volume, whilst the national leather industry fared better with exports increasing by 1%. The decline suffered by RGS was sharpest in September when external sales fell by 25% compared with August. Exports to the four main destinations fell to the area’s four most important clients: Hong Kong, United States, Italy and China. In the same period the Brazilian industry as a whole experienced a 7% growth.
Cezar Muller, president of AICSUL, the region’s tanning association, highlighted the fact that ‘the leather sector is suffering the same difficulties as other sectors in the state, with those who export suffering most.’ He continues: ‘the facts point to a negative development of industry in Rio Grande do Sul’ and cites the example of a 8.5% decrease in the number of jobs in August 2005, compared with the same month last year.
The region currently suffers from significantly higher rates of taxation than other Brazilian states.
