A worldwide success story

6 February 2002

When the Ecco Group purchased a tannery complex in Dongen in the Netherlands they were fulfilling a long held belief by founder Karl Toosbuy that to remain in the forefront of footwear manufacturing they should have control over every aspect of the process from the sourcing of the raw hides right through to the presentation of their shoes at retail level. When Karl Toosbuy was invited to address the annual meeting of the International Council of Tanners in Bergen, Norway, in 1988, tanners hoped to learn what a major customer felt could be achieved between buyer and seller. To their consternation, what they got was the clear message that they were not providing the leathers or the service which Ecco required and so Ecco planned to commence their own tanning operation. This they did, the following year, in Portugal where they already had established a joint venture footwear manufacturing plant. Toosbuy told the tanners that they did not understand the technical requirements for leather used in shoe making and could not meet delivery dates. He said that high cost footwear manufacturers could not compete with production centres such as Taiwan, Korea and Brazil and were, therefore, reliant on the up-market, specialised shoe sector in Europe where the competition was tough and the demands for quick delivery and fast response to fashion changes were increasing. To survive, European producers such as Ecco had to farm out stitching operations to lower cost countries on the one hand and invest in new labour-saving technology on the other. He summed up Ecco philosophy as 'dynamism, goal directed work and quick adaptation to the market.' Toosbuy predicted that Ecco's requirements would only intensify in the future and the same could be expected for other footwear manufacturers. 'Only the tanneries recognising the conditions of the future and solving the problems will be able to endure in a European market which will for certain be reduced.' Ecco first started making leather in Portugal in 1985 but this was in a small way, working from crust. In 1989 they moved into retanning and date their entry into the world of tanning from this time. Next came the combined leather finishing and shoe upper manufacturing facility in Indonesia in 1991. This was followed in 1997 by the opening of a beamhouse so that Ecco began tanning from the raw for the first time. The tannery in Thailand went into production in 1999 but was officially opened in April 2000. By this time Panos Mytaros had joined the group to head up the newly formed leather group function and plans to coordinate the group's worldwide leather activities from Holland were announced. In January 2001, Ecco bought the Tanco complex in Dongen. It was built by the Coreman family in 1985, changing its name to Corle in 1996 after a family split. The original development of the site included an effluent treatment plant which also served other local tanners. The beamhouse includes a multi channel drainage facility and although this has not been put to use in the past it is expected to play an important part in the research under RESTORM which will seek to recycle all waste from the tannery. Four tanneries are involved in the RESTORM project (18 partners in total). The breakdown of the partners is as follows: 4 tanneries, 7 universities, 4 research organisations, 2 private companies, and 1 association. The other tanneries involved are Pittards, UK, and Colomer and Igualadina in Spain. In total Ecco have a significant share of the budget (approximately 16%) and are the largest tannery contributor. The project is worth 1.37 million Euros to Ecco over the four year duration and will involve 155 man months (13 man years of effort) from Ecco during that time. Ecco will be involved in all aspects of the RESTORM project but will particularly focus on the optimisation of a closed loop tannery using recycling and recovery techniques including sulfur management and also the development of a biochemical beamhouse processing utilising novel enzymes specific to skin substrates. In addition, Ecco have an interest in the development of new biomaterials and textiles based on collagen. The project is still awaiting final contract although it is anticipated that the project will start in April, 2002. RESTORM is an acronym for Radical Environmentally Sustainable Tannery Operation by Resource Management. A centre for the future In Dongen, as you enter the site, the first building on the right used to be the Unico tannery but this has been emptied out and now serves as the hide store. A new tannery building has been provided for Unico elsewhere on the site. Behind the hide store, the beamhouse has been refurbished with the addition of two new, fully automated wet-blue drums. Next come the three fleshing and lime splitting units of which one is a recent addition followed by one bank of computer controlled liming drums and one bank for chrome tanning. Ecco are able to offer consistent wet-blue and say they are selling more and more as their capacity has been expanded. Their location in the Netherlands gives them good access to raw materials, enabling them to provide a reliable source for wet-blue to their customers. They can also mix in wet-blue from Indonesia. Chief among their customers are local Dutch tanners who were already being served by the complex. One such is Jan-Maarten Rompa, managing director of Rompa Leder. He was responsible for the building of the retanning department in 1998/99 and has now sold out to Ecco while becoming a major customer for Ecco wet-blue. Last year Ecco required around 25 million sq ft of leather/splits and leather lining for their footwear operations. Of this, 90% is produced by their own tanneries: Indonesia (15 million sq ft in 2001); Thailand (8 million in 2001) and Portugal (3 million in 2001). Surplus production was sold to other shoe factories. In 2002 Ecco expect to produce 17 million sq ft in Indonesia, 10.5 million in Thailand and 3.5 million in Portugal. Again, 90% of this will be used for Ecco shoe production which is increasing year on year. Of the total tannery production, including Holland, 25% will be used for sales to other companies. All of the wet-blue required by the finishing operations is from the group's own beamhouses in Indonesia and Holland. Ecco's intention is to continue selling 25% of annual production, which is expected to increase by 10-15% every year, to customers who need to obtain leather from a reliable partner. The Dutch operation is intended as an international centre for leather. In addition to the tannery, there are brand new offices and a large R&D department. Last year Michael Redwood was appointed leather R&D director, bringing with him a wealth of experience in both tanning and finished product manufacturing. Holland will be responsible for all research and development for the leather group both in terms of tannery practice and for the creation of new leathers. They intend putting a lot of effort into improving the technical features of leather. Employment of technical people and training will be carried out in Dongen, Panos Mytaros says: 'I see Ecco as a new centre for the future; the future of leather. We understand what the customer needs as we are a shoe company and not just a tannery. We test our leathers in production before a customer is even asking for the leather.'

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