IKEA approve Royal Leather as supplier

23 August 2012

The world renowned Scandinavian home furnishing company IKEA have approved tanners, Royal Leather Limited as its supplier of finished leather from Pakistan. IKEA produces 180 million catalogues and is one of the biggest home furnishing companies in the world with an annual turnover of €63 billion. It has 305 stores in a number of countries in Europe, North America, Asia-Pacific and the Caribbean and Middle East.

Marketing Director of Royal Leather and former Central Chairman, Pakistan Tanners Association Agha Saiddain told Pakistan’s Business Recorder that Royal Leather would be first supplier of finished leather in Pakistan, Bangladesh and Sri Lanka to IKEA. India had only a single supplier which has been dropped by IKEA, following its decision to increase its purchases from Italian suppliers.
IKEA granted the supplier status to Royal Leather for its environmental and social compliance capacity. Agha Saiddain said that the leather industry in Pakistan is facing ever-severe hardships because of a shortage of power and gas. Exports of wet-blue and a shortage of raw materials has badly hit the industry, as well as soaring prices for raw materials.
He said that the shortage of raw material was because of increased exports of wet-blue, smuggling of live animals to Afghanistan and massive power cuts. Domestic leather and leather products were no longer competitive in the international market. As a result, leather exports, including crust and finished leather have declined by 15% during July 2011-May 2012 period.

He said that the 800 tanneries in the country were functioning at 70% of their installed capacity for a number of reasons. He urged the government to take immediate steps to save the second largest export industry of Pakistan which was once earning more than $1 billion in foreign exchange to the national exchequer.

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