Doubleface demand sluggish

30 November 2004

There have been few doubleface seasons in Türkiye that have emphasised the decline as much as the present one. The situation can be outlined as follows: * The capacity of most tanneries is too big. * Demand is insufficient, perhaps at an all-time low. At the height of the season, many tanneries are working to half capacity. * Türkiye's traditional markets in Europe are stagnant, although some individual tanners are working this market exceptionally well. One experienced tanner has identified a different sort of problem with diminishing quality in lambskins. The wool side is coarser and the flesh side has striations not in keeping with first quality skins. This tanner believes that animal husbandry and genetic tinkering to enhance meat characteristics are altering the protein structure of hides. Chrome salt producer, Kromsan, had sales of 20,000 tonnes of chrome in 2003. Unconfirmed reports indicate that they will not meet their 2004 sales target. Imported lamb and sheepskins registered 10 to 11 million skins for Jan-Sept, 2004. For the twelve-month period January to December 2003, this figure was 29 million skins. Total skin imports for 2003 reached 67 million pieces. Doubleface production, on the other hand, has halved since 2002 to 40 million processed lambskins. Turkish tanners report fewer buyers of doubleface skins but existing buyers give larger, more economical orders. Tanners who invested in high technology are competing well but these are in the minority. One leather professional noted that: 'Some companies are waiting for customers to knock on the door.' For elite tanners, Russia is a beacon market. Russians now produce their own garments but, with only 80 or so tanneries, the fashion sector looks to Türkiye for highest quality finished leathers. Besides this, serious Russian buyers know there are no bargains, short-cuts or substitutes for quality these days. Both Turks and Russians know they must pay the correct market price for quality leather. China take note. Spanish skins have been selling for e11-12 each for the current doubleface season and nobody is quibbling because supply and demand, for once, are well balanced. China's demand for Australian and New Zealand skins has been such that the price of these has now risen to negate the traditional 25-30% price differential with European skins. Türkiye currently has about 1,000 working tanneries but imported skins and hides still compensate for local shortages of raw materials. Russia, by contrast, has 80-100 tanneries but plentiful animal numbers and a ready local supply of skins. Türkiye's production capacity must come down. What else can it do, with tanneries closing or working slow-time at the peak of the season? Logically, it should only be a matter of time before Turks start to invest in Russian tanneries.

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