Shahid Iqbal

Introduction
Second largest Export Earning Sector Contributes atleast 5% to manufacturing GDP & 8% to exports Tremendous Improvement for growth with Quality and diversification Exports increased $77 million in 1978 to $671 million in 2001-2002 Pakistan has a natural advantage in the area of livestock population The import of Hides are mostly not because of shortage but rather product specifications

Manufactures in Pakistan make all that one could desire Our leather garments have exquisite features which give an exclusive touch to Pakistan's leather garments covering a broad spectrum of colors and shades. A wide range of products is produced by the industry. Share of value added goods in overall exports has increased.

The Leather industry as a whole is broadly categorizer in three major areas: TANNERIES PROCESSING RETAIL

Tanneries consume more than twenty different types of chemicals in large quantities for leather processing

Chemicals' manufacturers like BASF, Clariant and Bayer etc. have located their units in Karachi. Some clustering of the firms can be seen, as most of the tanneries are located in Korangi and Defence in Karachi

Pre-tanning: Tanning involves some form of bating, or chemical treatment of the raw hide. Tanning: Tanning agents are usually divided into three types; those of animal origin, vegetable products and mineral salts . Chrome tanning is the most widely used method Wet finish: Dyeing and bleaching Finish: Dressing

PTA is the apex body of tanners & leather product manufacturers in the country. PTAs main thrust has been on securing maximum concessions from the Central Government. It negotiates with Central and Provincial governments. It also organizes International exhibition in collaboration with Export Promotion Bureau. It has established National Institutes of Leather Technology and Combined Effluent Plant in Korangi Leather Cluster with the help of Export Promotion Bureau.

PLGMEA, has been recently established (2001). It represents Leather garments manufacturers that are exporters in the country. As such Pakistans more then 60% exports comprise leather garments and leather goods.

PFMA is located in Lahore, since the industry is mainly located in this city. This association is dominated by big footwear manufacturers such as Services Industry, Bata Industry Elegent Footwear industry, Topfit Ltd. etc.

PGMEA has its headquarter located in Sialkot. Its total membership is nearly 200. Most of its members are from Sialkot. It represents manufacturers of wide variety of gloves The associations like others associations have been trying to get incentives from the government

Quality
Low quality as compared to competition No new process adopted

Environment
Law & Order, politics, economics

Cost of production
Highest taxes, induced costs due to poor infrastructure

Energy Issues
Circular debt

Pakistan is confronted with various challenges to survive in international market

Hi-tech for quality products and availability of

skilled manpower to cater to the needs of the world market

Comparison and cooperation with Korea

Good quality leather is mostly exported and is not available for high value-added Leather Garments & Leather Products

Leather garments in Pakistan are made mostly from low grade & medium grade leather
stiff competition from Chinese & Indian products

Very high in Pakistan as compared to our competitors like China and India. The high cost of various inputs especially utilities and taxes make our products uncompetitive in international markets.

Pakistan can capture the lost market share provided the industry is enabled to reduce cost of production

Economies of the most developed countries faced slump after September 11 incident
loss of purchasing power of consumers was borne by high value items Consequently, sharp decline was observed in markets for leather

garments like Germany, France, Sweden, Denmark, Japan and Russian States. local industry has to suffer in the backdrop of September 11 events was the noticeable shift of buyers from Pakistan. buyers switched their production to India and China

Unless Pakistan offers some benefits to attract these buyers, they will continue to place orders to the competitors.

S.M. Nasim, Chairman, Pakistan Tanners Association (PTA) feels that leather sector currently operating at least 20 per cent below capacity, if it is made to run to the capacity; the leather sector has the potential to fetch one billion dollar a year. The industry is meeting its 75 per cent needs of raw hides from local resources while rest of the 25-30 per cent is met through imports. Pakistan imports leather from Saudi Arabia, Iran, and China, Dubai, Sudan, Kenya, Australia and Italy. There is a trend in the organized tanning industry to convert into the cottage industry just to avoid heavy taxation.

Export Duty Fox Furs are much in demand abroad

This should be removed from negative items list under

import/export order

Establishment of a Leather Board in Pakistan

Headed by a person exporting value-added leather

products

Value-added exports like leather garments where there cannot be any further value-addition should be exempt from Export Development Surcharge.

The new potential markets identified by the exporters where major focus could placed for promoting leather garments are Poland, Japan and Russia.

Leather and Leather products from Pakistan have carved a respectable place in the world market. Made-in-Pakistan label and brands born in Pakistan have yet to come. Footwear, the largest segment of the leather industry around the world has been surprisingly neglected in Pakistan. Despite having a strong industrial base, Pakistan's leather industry looks treading without shoes.

Introducing Brand Names Control on Smuggling & Diseases of Livestock Tackling Environmental and Labor Issues Focusing on Footwear Sector Reduction of Duties on Machinery Research and Development: Quality differentiation