Aug 2017

From China Desk

Notes on World Leather Congress held in Shanghai on 29th August 2017 .

If this is the highest forum for the leather industry, then it was a little disappointing. Speaker after speaker repeating same few words sustainability, traceability, transparency, long term customer relationship, RSL etc. Hardly any fresh thoughts except for Michael Shih, President of Tung Hong tannery.

Clearly industry is on the back foot, trying to fight back and change the narrative against all its enemies like PETA and the need to tell aloud tanners side of the story.

Lisa Howlett US leather industries association deputy president 5th generation tanner. Gave statistics how the leather production output in States has been coming down over decades.

Luca Boltri – Italian tanners association said Italy is catching up. Gave statistics for the whole industry.(World produces 1700 sq kilometres of leathers a year). Even now labour cost is only 15% of the leather value so Italy will continue to do well. They have become biggest buyer for US raw hides. According to his figures in shoe production first is China and second is India, followed by Vietnam , 4th Brazil and 5th Indonesia.

Of the total shoe production only 20% is leather shoes in numbers which accounts for 45% in value. He has a positive outlook for leather Industry. World population is increasing and is expected to touch 9 billion by 2050. Beef consumption also will increase. By 2025 US beef consumption will be US$ 400 million and raw export will increase by 20%.

Simon Yarwood CEO of World Leather Keynote address – He talked about making wetblue close to slaughtering areas & how to make industry survive in the coming decades. Mostly talking about how to satisfy customers requirements for traceability , RSL etc.

Erica Ng e- commerce consultant consumer behavior / retail: All management jargons. As a summary e-commerce will grow / mall-shopping will come down.

Ding Xia President JD.com Fashion business unit talked about their company and their growth. Figures are mind boggling. Their marketing festival single day sales is more than Belle annual sales. All in billions. 2016 their sale was 136 billion USD.

Mike Redwood Consultant Clayton leather group same thing sustainability, traceability, transparency, RSL how to address brand demands and customer requirements.

Song Xiaowu Senior VP President scaling up e-commerce to offset falling retail sales.

Gareth Brooks MD GF asia basically same as other speakers how to meet customers demands on traceability, transparency, sustainability, RSL. And about automation. In Dominican republic they are already making Timberland leather shoes and many functions already using robots. Leather is scanned and cut by robots. Nike following the same and there is a move to make shoes closer to the market.

Stephen Jeske GST automotive leather: He says his company is 80 years old and will continue for another 80 years because no alternative still like leather for car upholstery. (Inspite of the fact that Tesla has said they will not use any more leather in their cars).

Chad Martin Tyson GM – They have 24% market share in USA for beef. Same as others sustainability, transparency, traceability ,RSL. They have slaughter houses and tanneries in various locations in USA.

Jonathan Clark Prime Asia CEO same 4 words. Plus innovation / change adapt or perish. No talk about Nike using more synthetics or what he is going to do about it.

Fernando Bellese JBS sustainability manager says Industry is getting a bad name because of a few bad apples. Then went on to talk how JBS is doing a fantastic job to satisfy all their customers in traceability, effluent treatment, human resouces handling and RSL.

Lydia Lin ZDHC foundation started by Nike and another 7 brands years ago for implementing RSL now has around 80 members. They have their own set of standards for chemicals to be used. If we have to supply to these brands, we have to pass ZDHC standards for chemicals like REACH standard.

Dietrich Tegtmeyer IULTCS president (International union for leather technologists and chemists societies) defending chemical usage in leathers. Spoke against these blind RSL mafia and why many chemicals are not as bad as it is projected.

Michael Shih, President of Tung Hung tannery the only fresh voice in the whole session. He said he thought for a long time whether to talk like the rest or tell the truth. He said he doesn’t care he is already old and not worried about upsetting someone. He says, looks like its time to hang up his boots and go home since its not profitable anymore. He runs a cow suede tannery making 2 million sqft for brands. He says when US hides were at 100 USD, meat price was 3.4 USD per kg. He was paying 3.68 dollars per kg for hides. So which one is the by product? Hides or meat. So people like Tyson foods push up the hide price on one side. Then customers like Nike cut leather costs every season inspite of making billion dollar profit already. Then ask tanner for traceability, transparency, RSL – how is it possible? Tanner should clean up the environment but brand doesn’t want to pay 5 cents extra for environment. His was the only talk which got huge round of applause !