The 2016 All China Leather Exhibition in Shanghai took place at a truly key moment for the global leather industry. Raw material prices have been falling for over a year and the major dealers arrived in the hope that they could confirm that the bottom had been reached. However the world economy has not picked up and with the exception of the automobile sector most tanners are running below capacity. In many areas leather is heavily challenged by synthetic materials and textiles. Yet all exhibitors had come to Shanghai to try and understand the implications of the Chinese economy slowing to below a growth figure of 7% while its manufacturing costs have risen to such an extent that it is no longer able to be the low cost manufacturer to the world.
The Honorary Chairman of the China Leather Industries Association, Mr Su Chaoying, was interviewed at the end of the Fair and clearly explained what lies behind many of these points. With great clarity he talks about the implications of China in transition from a low cost exporter to a major consumer nation. During the Fair we learned that a maturing China will have young but well educated consumers with fast developing tastes and Mr Su Chaoying discusses these consumers and their attitude to leather. For tanners worldwide the new Chinese consumers of today are in many ways typical of what we can expect in the future in much of the rest of the world.
While these consumers offer great opportunities to the world leather industry this creates challenges for the Chinese tanners, who will have to adjust from export orientation to meeting the consumer demands at home. Mr Su shines a spotlight on what we learned during three hectic days in Shanghai.
At the end of the show prices certainly had not fallen. Some hide dealers think we have seen the bottom. What was clear was that the meetings on the stands and in the corridors were intense, and the sun shone throughout. It is already clear that arrangements are in hand for the 2017 edition where the 3rd World Leather Congress will also be happening.