Four days in Brazil

It's only a three-hour time difference from Leather International HQ in London, England, but after 24 hours of travel, we were finally at the 39th edition of FIMEC, at FENAC exhibition grounds in Novo Hamburgo. It kicked off in the midst of a $10-billion corruption scandal within the state-controlled oil company Petrobras and President Dilma Rousseff's inner circles. The topic always seemed to be in the periphery, but in no way did it cast a pall on the overall success of the show, which drew 35,000 visitors, 600 exhibitors and 1,200 brands.

Increased business was the overall consensus from this year's show, according to key representatives from the leather-footwear industry. They considered the 2015 edition a great opportunity for overcoming current economic adversity.

"We benefitted from extremely well-qualified visitors and this contributed to elevating the professionalism of the contact between companies and visitors," says FENAC CEO Elivir Desiam. "Exhibitors closed sales and got many other negotiations underway for the coming months, and now more than ever, FIMEC is the Americas' main trade fair, having consolidated its position as a fundamental tool for interaction between industry professionals."

According to Fernando Bello, president of the Center for the Brazilian Tanning Industry (CICB), footwear is taking an overall back seat to automotive leather at present. But FIMEC, which predominately focuses on the South American market, is a convergence point for industry entrepreneurs, has become more mature and professional, "with visitors focused on seeking innovation," Bello adds.

Crowd sourcing

There were impressive crowds during the four-day event on 17-20 March, displaying new developments, product launches and innovations, which helped reinforce the strength of Brazil being the world's second-largest emerging market.

The Concept Factory, brought together by FENAC, Coelho Assessoria Empresarial and the Brazilian Institute of Technology for Leather, Footwear and Related Products (IBTeC), reproduced in real time the infrastructure of a shoe factory. This was the sixth of its kind and turned out to be a big success in terms of illustrating the entire shoe production process.

"Process automation was the biggest new development," says Paulo Griebeler, IBTeC executive president. "We had a robot to spread water-based glue on the footwear, for instance."

Away from the fairgrounds, however, another dimension to Brazil's leather industry, and its concentration in this region of Rio Grande do Sul state, became clear during a whistle-stop tour otherwise known as the Image Project, arranged by CICB. Once called the National Capital of shoes, this south-west region of Brazil is home to numerous tanneries, and this project is designed to raise the international profile of fine Brazilian leather products, and reveal the potential of business.

SENAI

Tucked away off cobbled streets, the unassuming campus of the analytical centre of laboratories of the leather technological centre, SENAI, in Estância Velha, might blend into verdant surroundings, but the work it does here stands out on an international scale. In a series of labs, shown to us by chemist and technical analyst Lucas Zoldan, they carry out physicomechanical and chemical tests on leather in accordance with national standards.

The lab has ultra-modern instrumental chemical-analysis equipment to determine, for instance, measures of restricted substances like metals, certain dyes and chromium. There are other labs that assess everything from environmental monitoring and water processing to durability and fibrous structure of skins and leather, to reveal raw-material defects and problems from the beamhouse process.

This is one of two test-house institutes for Clark's shoes, and to make sure REACH requirements are adhered to, state-of-the-art equipment and facilities ensure any traces are exposed. A spectrometer with a plasma flame that reaches 10,000°C, for example, can measure all elements of the periodic table and restrictive substances. Any trace of chromium VI, for certain customers, is an automatic fail. And any PVC in samples for Nike is also a fail.

There is also a testing site for wastewater and solid wastes, as well as its own tannery.

IBTeC

This is a technical institute with a handful of laboratories for physically testing shoes and safety boots. Here, one million cycles of performance over six days for shoes and boots are run. It also tests for forbidden metals (organics), with another room to test PVCs (inorganics).

IBTeC's most recent data revealed that 15% of leather tested had problems with too much chrome, but they have seen improvements from these 2012 numbers and are seeing a purer form.

Other tests account for formaldehyde, and there is a room to test the overall comfort of shoes based on a multitude of criteria such as weight distribution, stress points and gait, for example.

Minuano

As part of the Milu Group, Minuano tannery, run by the four brothers of the Enzweiler family, has been the first name in hair-on hides for decades. The 42-year-old tannery in Lindolfo Collor, with 1,000 employees, concentrates predominately on furniture and is able to process 5,000 hides a day. We speak with José Marques, the export manager here and he explains that it's a little quiet on growth since a strong trend started in 2008. Back then, they were producing about 3,000 hides a day and used a different strategy in the market.

"Instead of people asking for articles, we introduced new articles and technologies," he explains, "And we opened our factory to the market, so we showed more. As a result, we invested a lot in quality pieces."

But now they are going to stabilise to adjust some other points and then start to grow again. "The world doesn't allow us to grow so fast at the moment," he adds.

Minuano is not able to produce small volumes - like 200m - for fashion either. It works for articles that require 1,000m and up since it is the world's biggest producer of hair-on hides. "So if you're an exporter who follows the tendencies of the market, then hair on is still fashionable," he says. "We buy fresh raw materials, salted and wet-blue, which can create a lot of complications. But we're very well positioned in the market and have good relationships with slaughterhouses in the area. Salted hides come from a little farther afield in another state. And then the wet-blue comes from central Brazil. We need reliable suppliers everywhere, but we exist because of the hair-on."

In terms of competition, Minuano has some in Brazil but it's mostly in Europe. "There are big players in the Brazilian market for furniture, but we don't compete against each other," Marques explains. "Our main competitors are in Italy and Asia; the US is slow now, but is growing again. It's a wake-up call."

Soubach

Out past the ranches and rice fields, we cut through gaucho country to reach the Soubach tannery, where they produce for shoes and handbags. The company was bought out last year by a family steeped in banking, so there is a lot of strategy prioritised at the moment to make the business thrive in light of the real being strong against the dollar, and despite director Pedro Tunholi not knowing much about the leather business. He's staying cautious for now, however, as businesses across the country are struggling.

"There is potential to expand for exports, but the domestic market is suffering," says Tunholi. Longevity has its place, though, and the name Soubach has been synonymous with quality for 25 years.

Tre Anytry

Behind a nondescript white gate at Tre Anytry tannery is a treasure trove of marine and exotic leathers. Founder Leandro Jose Scur explains how he started with crocodile 21 years ago and then moved to snake; the passion he has for the business is obvious. The scale of this tannery is miniaturised compared with others we visited, but the hard work and dedication is the same. All skins, which arrive in either crust, pickled or wet-blue, are hand painted with water-based paints, which takes about two to three hours a meter, and the vintage cold-war-era press-and-polish machines belie robust efficiency and superior finishes. Plus, they use water only from rain and reuse it, so their water emission is zero.

Here, Scur has stingray, snake, elephant and crocodile that are traceable to their country of origin. The meat from these animals is also consumed, especially in Asia. Every year, quotas of skins and how species are sustained are determined by decisions made by scientists, not the industry. Some quotas are set at zero as populations aren't growing. On the other hand, there might be a high quota, but the skin isn't particularly fashionable at the time. Either way, when a quota is down, the price goes up, and it's the same quota for all traders. For Scur, it's a tricky balance to measure the risk of purchasing specific skins, based on quotas, price and unpredictable trends.

IBAMA (Brazilian Institute of Environment and Renewable Natural Resources) also conducts audits to ensure traceability and regulatory adherence on each quota, and the inter-governmental agreement CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora), which ensures that international trade in specimens of wild animals and plants doesn't threaten their survival, issues secure ID stamps for each hide to document its authenticity.

"So when customers come, we have to have all documents in order beforehand or face prosecution," says Scur, as being wary of black-market trade is part of the business, especially in exotics.

And all skins in Brazil come from farmed animals; there is no commercial use for wildlife animals - although eggs are sourced and 10% that were born in captivity go back to the wild.

"I've had the same traders for many years," says Scur. "This is a long-term business, not a fast one. You have to honour your quota to maintain relationships. You have to be patient."

Higra

This family-run pump company in São Leopoldo, founded in 2000, delivers products to a range of industries like mining, agriculture, leather, steel and gas for wastewater treatment. Broader economic circumstances are impacting Higra, but it is looking to expand to the US and is focusing on Houston to set up its first base outside Brazil.

Alexsandro Geremia, the company's culture guardian officer, is optimistic about growth based on the benefits of its products, which explore hydro-efficiency and how it uses 40% less energy than other pumps.

Higra's business, born out of sustainability, focuses on four pillars: culture, economics, social and environment, and is dedicated to a culture based on people being the foundation of the company with training systems to keep all of its 60 employees involved in the development of products.

So now they're focused on investing in people. Geremia wants to double the sales force this year, and next year is building more infrastructure here in São Leopoldo, which will unfortunately envelop the adjacent soccer field.

"Now is the time to invest," Geremia says "Things are cheap and there are more qualified people looking for work."

OCM

This intimate tannery in Novo Hamburgo focuses only on hair-on, wet-blue hides with hand-made, high-definition silkscreen prints for handbags, shoes and accessories. The site is on preservation land, so no chemicals are found here; only water-based paints can be used for the silkscreens and all waste management is self contained.

At the moment, they're developing new patterns to test on hides, including roses and butterflies. And in the workshop, two employees squeegee paint across each hide six times to ensure the right, most consistent print.