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Pakistan - Finished leather exports decline but footwear improves
10 January 2017

PTA Member - Agha Saiddain

The quantitative export of finished leather has declined by 32.72 percent in last five years from 24.985 million square meters in 2011-12 to 16,810 million square meters in 2015-16 whereas in terms of value, it went down from USD1.049 billion to USD0.981 billion during the same period.

Pakistan Tanners Association (PTA) former Chairman Agha Saiddain while talking to Business Recorder further revealed that finished leather exports fell by 25.98 percent from 5.939 million square meters in July-October 2015 to 4.396 million square meters in July-October 2016. In term of value, it showed a decline of 10.08 percent from USD126.209 million to USD113.487 million during the same period.

Likewise, leather gloves exports also registered a decline of 13.44 percent from 1.860 million dozen to 1.610 million dozen and in monetary term, it fell down by 15.22 percent from USD66.936 million to USD56.745 million during the period under review, he said.

The export of leather apparel and clothing also showed negative trend and slightly declined from 295,000 dozen to 287,000 dozens denoting a fall of 2.71 percent while in term of value it was decreased from USD111.444 million to USD107.147 million showing a loss of 3.86 percent, he said.

On the contrary, Agha Saiddain said the export of leather footwear registered a gain of 17.04 percent from 1,696 million pairs to 1.985 million pairs whereas in term value it moved up from USD24.662 million to USD26.937 showing a gain of 9.22 percent during the same period. 

He said the leather industry contributes five percent of the country´s export earnings and 2.67 percent of the manufacturing GDP. The leather industry was employment intensive providing jobs to more than one million people mostly to weaker section of the society, he added.

He said the regional countries including Bangladesh, India and China had shown 309 percent, 67.79 percent and 55.49 percent growth, respectively, in the leather sector exports during the period of 2007-8 to 2015-16 against Pakistan whose exports were squeezed by 19.59 percent.

He was of the view that the regional countries exports outperformed Pakistan mainly because of the attractive incentives provided by their respective governments while "we are striving to run our units amid an unfavourable environment due to higher input cost, high power tariff and diminishing population of animals as well."

Saddain noted the hide and skins were generally damaged due to lack of proper training of the butchers, adding that 33 percent of hides and skins were damaged due to a number of reasons. "Pakistan can earn addition amount of USD310 million per annum if these factors are controlled and mechanised slaughter houses set-up in the country."

"Our country is facing a serious trade deficit of USD23.96 billion by the end of financial year 2015-2016. The leather industry has a potential to grow into a USD2 billion industry if hides and skins are improved and footwear parks are set up in the country including Lahore," Agha Saiddain added.