Adapting to remain competitive

15 August 2003

These days each customer wants their own leather, which is unique to them. This makes life more difficult as we have to supply many small batches of specific leather types in a range of colours. But it is the only way we can compete', says Silvino Navarro, managing director, Incusa. Navarro is the second generation of the family to control the tannery, part of the Lederval Group, which was founded by his father Silvino Navarro and his business partner Manuel Ríos in the 1950s. Last year Navarro senior retired from day to day control of Incusa although he is still actively involved in the overall activities of the group and remains as chairman. The core business of the tannery, which is located in the town of Silla on the outskirts of the Mediterranean city of Valencia, is leather for footwear upper production mainly for the strong domestic footwear sector. In recent years the upper leather tanners in Spain have had to face strong competition from the Far East and Eastern Europe as well as their traditional rivals in Western Europe, particularly from Italy. Much of the high volume business has now relocated and left local businesses with the dilemma of looking for new types of business or face bankruptcy. The overall volume of footwear upper leather made in Spain fell in 2002. Full industry statistics were published in the June issue of Leather International and can be found on []. 'Many of our traditionally larger customers, that we have depended on, have left Spain. We have a great footwear industry in this country but many are relocating to Eastern Europe, the Far East and North Africa to remain competitive', Navarro told Leather International. 'Therefore, we have to strive in terms of quality, fashion and technology and provide niche products for our customers.' Last year the whole business was assessed and a company wide restructuring initiated which is continuing to take place. Navarro has overseen the reorganisation of the tannery layout and they have taken on a new younger team of technical staff and at the time of our visit they were installing new IT systems throughout the business. Around 140 people work in the business. 'Since the restructuring I am much more optimistic about our performance in 2003. Raw material prices are more stable and I believe our staff can deliver leathers which have highly technical specifications and are in line with fashion', he said. 'Thankfully we still have many world class footwear companies located in the towns of Elda and Elche close to us. The concentration of shoe makers and footwear component producers still makes Spain a strong footwear market. However, labour costs are getting higher and many of the brands are sourcing leather from one location and actually manufacturing somewhere completely different', he added. Tannery modernisation Incusa manufacture approximately 800,000 sq ft of finished leather per month and 60% is sold directly into the domestic market. The remainder is exported all over the world. To remain competitive the tannery layout has been modernised and new machinery installed. At the heart of the post tanning operation is the highly mechanised vacuum drying system supplied by Italian manufacturers Cartigliano and Bauce. Following the sammying/setting operation on a Bauce machine six sides are automatically conveyed onto one of six vacuum drying tables on the Cartigliano machine. Following vacuum drying the sides are loaded on to overhead conveyors to condition before finishing. The whole operation only requires four operators and is the most efficient method available on the market. Fleshing and splitting operations are carried out on limed hides. The splits are sold within the group to the Dercosa tannery and any lime fleshings are dried, treated and recycled into pellets which are sold as fertiliser. Chrome liquors and wastewaters are both recycled and the waste chrome sludge is dried in a recycling plant at the rear of the tannery. 'To survive in the leather industry in Spain now requires a big investment in automation, environmental control and new product development. We are now in an ideal position to compete on the world stage', concluded Navarro.

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