EXPORT & IMPORT

LEATHER EXPORT

WHAT

IS

LEATHER

Leather is a durable and flexible material created via the tanning of putrescible animal rawhide and skin, primarily cattle hide. It can be produced through different manufacturing processes, ranging from cottage industry to heavy industry.

TYPES

In General there are 4 leathers in solid form.

Full-grain Top-grain Corrected-grain Split

There are two other types of leather commonly used in specialty products, such as briefcases, wallets, and luggage:

Bonded leather

By cast leather

CNB EXPORTS

Artificial Leather

Nappa Leather

Goat Leather

Aniline Leather

Buffalo & Cow Leather

PVC Leather

Finished Leather...

The leather industry occupies a place of prominence in the Indian economy in view of its massive potential for employment, growth and

exports.

INDIAN Leather Export Industry

The exports of leather and leather products gained momentum during the past two decades.

1965-66

1966-99 69558 millions

320 millions

The leather industry has undergone a dramatic transformation

Policy initiatives taken by the Government of India since 1973 and 1991

The industry is poised for further growth to achieve greater share in the global trade.

Apart from a significant foreign exchange earner, leather industry has tremendous

potential for employment generation.

Tanning & Finishing - 1, 25,000

Chappals & Sandals - 4, 50,000

Leather Goods&Garments-1, 50,000

Structure of the industry

Hides Skins

The leather industry is spread in different segments, namely, tanning & finishing, footwear & footwear components, leather garments, leather goods including

saddler & harness, etc.

64 million pieces

166 million pieces

The major production centers for leather and leather products are located at Chennai, Ambur, Ranipet,

Vaniyambadi, Trichi, Dindigul in Tamil Nadu, Calcutta in West Bengal, Kanpur in Uttar Pradesh, Jalandhar in Punjab,

Bangalore in Karnataka, Delhi and Hyderabad in Andhra Pradesh.

Export Potential

The leather industry, one of the major foreign exchange earners of the country recorded significant growth since the beginning of the decade

Category 1998-99 Finished Leather 265.2

Leather Footwear 290.2

Footwear Components 243.7

Leather Garments 368.6

Leather Goods 429.0

Saddler and Harness 33.4

Total 1630.1

1993-94 1994-95 1995-96 1996-97 1997-98 1998-990

20000

40000

60000

80000

100000

120000

140000

81520.38

101143

117223.4

110343.2

61570.61

69557.8

Rs. M

illio

nEXPORT OF LEATHER AND LEATHER PRODUCTS

Country 1998-99 Share in total exports in 1998-99

Germany 15462 22.23 %

USA 10826 15.56 %

Italy 8317 11.96 %

UK 9744 14.00 %

France 3240 4.6 %

Spain 3103 4.46 %

COUNTRIES EXPORTING LEATHER FROM INDIA

Russia 1009 1.445 %

Portugal 1240 1.78 %

Australia 1465 2.10 %

Denmark 808 1.16 %

Netherlands 2127 3.06 %

Hong Kong 258 3.25 %

Others 9958 14.32 %

Total 69558 100 %

CNB

EXPORTS

Our company had established a great market at domestic & national level.

Now company founds that we should move on over to the international market.

The company is aiming for Germany & European (EU) to export the mass amount of leather and leather goods as demand

for leather is high is Germany and so than in other countries.

Marketing of leather and leather products in Germany & the EU

The leather sector offers a good potential which Indian entrepreneurs can exploit in Germany and other EU markets

characterized by

ever growing competitiveness in terms of

price and quality, on one handand

the environmental considerations, on the other.

Features of Indian leather export market.

•The world's second largest import and export market

•A difficult buyers' market with hyper competition and high expectations

•A dynamic multi-faceted market with rapid technological development and innovations A market where a considerable amount of buying power is devoted to satisfying individual needs

•A market influenced by the rising average age of the population and low birth rate

•A market where environment awareness and eco-friendly production becomes more and more a pre-requisite for successful marketing of products

Major

Leather

Export

Markets

SalesFRANCE

GERMANY

UK

USA

HONGKONG

ITALY

SPAIN

8% 13%

15%

30%

31%

3%

Composition of Indian leather exports to Germany (1998-99)

Leather Leather Footwear Footwear Component

Leather Garments Leather Goods Saddlery and Harness

Leather Leather Footwear

Footwear Compo-

nent

Leather Garments

Leather Goods

Saddlery and

Harness

0

20

40

60

80

100

120

28.25

48.8656.03

109.5 113.2

8.51

Export of leather and leather products to Germany (1998-99)

Mill

ion

US

$

Market information through journals and

magazines

Quick Market Assessment

Trade Fairs

Agents

Marketing channels

Recipe for market intelligence

Environmental aspects for leather products

Depletion of certain species.

Unsound products

Taboo

Against some casts

Give rise to BLACK MARKETING & ILLEGAL killing of animals.

Strengths

High Growth

Ready availability of highly skilled and cheap manpower

Large raw material base

Policy initiatives taken by the Government

Capability to assimilate new technologies and handle large projects

Continuous emphasis on product development and design up gradation

Weaknesses

Lack of warehousing support from the government

International price fluctuation

Huge labour force resulting in high labour charges

Lack of strong presence in the global fashion market

Unawareness of international standards by many players

Opportunities

Rising potential in the domestic market

Growing fashion consciousness globally

Use of information technology and decision support software to help eliminate the length of the production cycle for different products

Use of e-commerce in direct marketing

Threats

Major part of the industry is unorganised

Limited scope for mobilising funds through private placements and public issues (many businesses are family-owned)

Difficulty in obtaining bank loans resulting in high cost of private borrowing

Stricter international standards

High competition from East European countries and other Asian countries

Lack of communication facilities and skills

OUR COMPANY ADOPTS THE FOLLOWING STRATEGY & STEPS AT INTERNATIONAL MARKET.

Make a commitment to exporting.

Plan, plan, plan.

Conduct research to find the right market.

Conduct research to find the right market.•Primary market research •Secondary market research

Devise marketing strategies for your target market.

Enter the market.•Direct exports•Indirect exporting

Get your product or service to market.

Explore financing options.

Understand the legal and regulatory issues.

Put it into practice.

Team Canada Inc (TCI) helps you along the way.

BARRIERS & DIS-ADVANTAGES OF LEATHER EXPORT

For Small-and-Medium Enterprises (SME) with

less than 250 employees, selling leather goods and services to foreign

markets seems to be more difficult than

serving the domestic market.

The lack of knowledge

Trade regulations

Cultural differences

Different languages and foreign-exchange situations

Financial management effort: To minimize the risk of exchange-rate fluctuation

Customer demand: International customers demand more services from their vendor like installation and start-up of equipment, maintenance or more delivery services.

Communication technologies improvement:

Management mistakes: The management might tap in some of the organizational pitfalls, like poor selection of overseas agents or distributors or chaotic global organization.

Challenges

Exporting to foreign countries poses challenges not found in domestic sales. With domestic sales, manufacturers typically sell to wholesalers or direct to retailer or even direct to consumers.

When exporting, manufacturers may have to sell to importers who then in turn sell to wholesalers.

Extra layer(s) in the chain of distribution squeezes margins and manufacturers may need to offer lower prices to importers than to domestic wholesalers.

Need of CORE MARKETING IN LEATHER EXPORT

Focuses your efforts on the right markets and opportunities – where you are most likely to win

Forces you to understand your prospects and competitors so you can differentiate and innovate

Creates a “go to market system” that optimizes lead generation and close rates

Develops an operational plan to execute the “go to market system”

Determines how marketing and sales activities will be tracked, measured and optimized

THANKING YOU