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Leather industry in Pakistan.

Leather Industry in Pakistan

The history of leather industry in Pakistan is as old as the country itself. At the time of independence there were only a few tanneries producing sole leather and that too at a very small scale. However, since then this industry has been flourishing and has never looked back. In the early days of independence some tanneries were established in Karachi. In 1950's some were established in Lahore and adjoining areas.

The 1960's saw the installation of more units in other parts of the country like Multan, Sahiwal, Kasur, Gujranwala and Sialkot. These units were well-equipped with the latest and modern facilities. More advanced units were established in the 1970's and Pakistan started production of finished leather. The era of 1980's saw a period of improved quality production.

Raw Material

Pakistan is fortunate that the raw material required by the industry is available in the country in abundance. Local availability of raw materials and low wage cost gives the country a competitive edge in the world market. The following are the types of basic raw materials which are being used by this industry: - Cow hides - Buffalo hides - Goat skins - Sheep skins

Trade with Other Countries

During the 1960's Pakistan's exports were restricted to wet blues. In the 1970's finished leather processing was started on a large scale. Major centres for selling of our leather products were Western Europe particularly France and Italy. In mid 1970's Spain was included in this list for goat skins whereas, buffalo and cow hides were bought by France and Italy. Eastern Europe with the exception of Romania is a small market for Pakistan.

Japan is the sole customer in East Asia. China bought a substantial quantity of finished sheep leather which proved to be a turning point for our leather exports. In 1980's South Korea also joined this list and from here the exporters obtained useful experience of mass scale production and quality control.

During the 1980's Italy and Spain remained in our buyers list for goat skins, and cow and buffalo hides. France gradually dropped out from the scene. At present the list of importing countries of our leather and its products is quite large. However our efforts for exploring the market in USA, Canada and Scandinavian countries have not yielded the desired results so far.

Export Promotion

In order to boost exports of leather and its products, the following issues must be resolved at the earliest. - New markets must be explored and

steps for promotional activities be

taken. - Measures must be taken for

increasing the unit value of the leather

products by concentrating on improving the

quality. - Line of production must be diversified. - Encouraging BMR of the existing units

by which production of leather is

increased and timely supply to the leather

goods producers is ensured. - Supportive policy measures should be

adopted for the entrepreneurs.

Incentives Provided

The government has extended certain incentives to uplift this industry in the shape of rebates on exports, exemption on import duty on the import of machinery for the manufacturing of leather products and certain another tax exemptions. Moreover, the government has recognised the importance of personal selling. Hence assistance to the exporters for extensive travelling to any part of the world for exploring the markets of leather and leather products has been extended by the government.

NCBs and DFIs are also extending their full co-operation in the shape of providing the required financial assistance for the purchase/import of machinery and to meet their requirements of working capital.

Joint Ventures

Foreign investors, especially from Netherlands have shown interest in joining hands with Pakistan in this industry. By entering into joint ventures with those experienced tanners and traders, we can improve the quality of our products by using Dutch Chemicals, machines and expertise, which will ultimately lead to fetching more share in world market.

IDPB's Role

IDBP is a major financier of leather tanneries in the formal sector. Investment in leather units have increased over the years and IDBP's assistance has played an important role in upgrading and modernising the leather industry. IDBP is keenly interested in developing leather export business through SMEs through out the country.
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Article Details
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Author:Afzal, Naeem
Publication:Economic Review
Date:Jan 1, 1991
Previous Article:Future of leather industry is bright.
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