Consolidation is on the cards

15 August 2003

Luis Ernesto Collazo, sales director, Le Fark (Mexico): 'Mexico's tanneries have continued to receive leather orders. However, most of the production is aimed at export markets. Domestic consumption remains low. In terms of quality, the Mexican process has improved due to the needs of the footwear sector, which is also benefiting from improved quality, delivery and product development. We see the Chinese market offering great potential to us. It's like a very large client from which we should take advantage of their manufacturing capability.' Rick Buechler, vice president, Seton Trading Group (USA): 'The main problems which Mexican tanners are facing are that of debt collection and the uncertainty caused by the exchange rate when buying American hides. A few Mexican tanners are, therefore, specialising in specific products. Unlike the Chinese market, which is growing, the Mexican market is stagnating or even contracting. This makes the Chinese market more attractive. Especially when leather processing in the world is getting more difficult as there is an overcapacity of leather producers.' Oscar Medina Plascencia, managing director, Medina Torres (Mexico): 'There seems to be a polarisation where the large companies are every time larger and the small ones tend to disappear. The surviving small companies are bound to specialise in a niche market or look for alliances with suppliers and clients. The general trend seems to be pointing towards bovine leather for the automotive and furniture upholstery sectors. There is becoming less reliance towards the footwear sector, especially when synthetic and textile materials are replacing leather on a large scale. Worldwide overcapacity in the tanning sector is close to 50%. Companies which have the right specialisation and technology according to demand, will survive.' Daniel Medrano, international sales man-ager, Industrias del Arlanzon SA (INDASA) (Spain): 'The leather sector in Mexico is not moving forward due to the lack of initiative when proposing fashion items and competing against high-tech and fashion orientated markets. This is often due to the lack of financial stability in the country. Concerns over the growth of the Asian markets are starting to be less frightening. We need to stop seeing China as an enemy and see it more as a country for opportunity.'

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