30 March 2017
This 20th edition of the All China Leather Exhibition (ACLE) will take place at the New International Expo Centre in Pudong, Shanghai from 30 August to 1 September 2017. This year the fair will be preceded on 29 August by the 3rd World Leather Congress (WLC) due to take place in Shanghai and APLF Ltd is proud to be the Founding Sponsor of the Congress. Its theme running through it being “The Leather Revolution”.
The proximity of the 3rd WLC and 20th edition of ACLE offer a unique opportunity for the global leather sector to come together and participate at both the congress and trade fair. These two complementary events promise to be the most important organised in recent times in China for the leather sector. More details on the 3rd WLC are available during this week’s fair from the APLF Press Office.
The total exhibition area covers 92,000 square metres and 8 halls of the exhibition centre. Halls E1 – E3 are halls for international tanneries, machinery and chemical suppliers; Halls E4 – E7 and N5 are dedicated to domestic exhibitors. As at the end of March 80% of the exhibition space has been reserved and ACLE will continue to be China’s definitive leather event as the gateway to the world’s most dynamic leather manufacturing country. 1,100+ exhibitors from 36 countries and 24,000+ visitors are expected.
As in previous years there will be nearly 20 group pavilions from the leading leather making countries present at the August / September event confirming the importance of ACLE as a key business platform to supply China with the raw hides, semi-finished leather that its industry requires to continue functioning as well as the speciality chemicals from the world’s leading producers. The whole supply chain for the leather making process can be seen at ACLE.
According to the latest report on the performance of China’s leather industry for 2016 published at the beginning of March by the China Leather Industry Association (CLIA) – co-organiser of ACLE together with APLF – total sales revenue in 2016 rose by 3.2% year-on-year to US$212 billion. Overall exports closed at US$76.4 billion, down by 11.3% compared with last year while imports also decreased by 7% year-on-year to USD8.9 billion.
China needed to import 668,974 tons of semi-finished leather in 2016 worth US$1.5 billion. Finished leather imports for the same period were 131,987 tons with a value of US$2.1 billion.
Although leather import figures were lower compared to 2015, such huge imports illustrate the export opportunities available to western tanneries already working with or prospecting new Chinese customers. ACLE is the ideal business platform where to make contact and negotiate with the decision makers from China’s 550 leading tanneries and the footwear factories that manufactured 4.6 billion pairs of leather shoes in 2016 (+0.9%).
Transition still underway
The Honorary Chairman of the CLIA, Su Chaoying, summed up the overall transition taking place in China’s economy. The move from manufacturing and exports dominating the economy and a focus on the growth of consumer spending has resulted in a continued slowing of China’s GDP growth from 6.9% in 2015 to 6.8% in 2016. This year’s official target is 6.5%. Nevertheless, the growth engine is gradually shifting to more consumer-driven growth with a constant flow of people moving into the middle classes. Overall consumer spending continues to grow and is extremely buoyant at an annual rate of +10.9% and this was reflected in terms of the interest in imported footwear in 2016 that increased by 15.9% to reach 112.4 million pairs.
The major driver behind leather demand and an important component of consumer spending has been the automotive sector that enjoyed a record year both globally and in China in 2016. Worldwide new car sales were 88.1 million units of which 28 million were transacted in China – an amazing growth rate of 13.6% year-on-year. Forecasts indicate that this trend should continue in China through 2017 at a growth rate of 5% which could mean that 30 million new vehicles could be sold in China this year.
Nevertheless, we cannot dismiss the fact that the slowdown in the China leather sector has also been influenced by the ongoing crackdown on polluting industries by authorities has led to the closure of many tanneries in the north of the country. The aim of the clean-up is clear: this is a policy of structural environmental changes in tanning activity to preserve the environment and which will help yield long term benefits not only for China’s environment and citizens, but also encourage more sustainable exports of finished leather and supplies of the same to local leather manufacturing.
With such sustainable leather making processes and environmental care, Chinese leather will be much more marketable as consumers become more aware of the eco-benefits of modern leather making processes.
Since the election of the 45th President of the United States last November major stock markets have moved sharply higher indicating that investors are optimistic about the future of the economy. And this is despite the fact that the USA has now withdrawn from the Trans-Pacific Partnership (TPP) and is looking to renegotiate the North American Free trade Agreement (NAFTA) with Mexico and Canada. “Free Trade but Fair Trade” is the new slogan from the US Administration and the leather sector as well as others will have to wait until the revised trade policy towards China becomes clear in the coming months.
As we mentioned last year and this is a fact not to be forgotten:
“……most countries would make huge sacrifices to attain the economic performance of China as a whole and its leather industry in particular. China’s trained manpower, superior infrastructure and logistics still make it the main outsourcing destination for footwear and leathergoods despite advances being made by low-wage economies in the ASEAN region”.
In a nutshell China’s manufacturing capability cannot possibly be replaced even with the combined capacity of shoe making and leathergoods manufacture of all its Asian competitors put together. It will always have to import raw materials to feed its production lines and hence cannot be ignored by western suppliers.
Five months to go to ACLE
There are signs that leather has fallen back into favour with many designers after its price fell back from the record highs reached in September 2014. This price spike meant that in 2015 leather had priced itself out of the market and designers and manufacturers maintained their profit margins by using more petroleum based synthetics for all types of footwear, especially sport and casual sneakers.
Prices for leather are still not particularly low but forecasts from the US hide industry indicate that one million more hides could be available this year. In addition, manufacturers are clear that they will not pay more for leather and machinery technology companies are making efforts to create processing and finishing methods that will yield top class finishes from lower grade material, for example, this reducing the tanners main cost of acquiring top class hides that prejudice profit margins.
With several new factors to contend with this year and the advent of the 3rd WLC right before the trade fair, ACLE promises to be an event where businessmen can start drawing conclusions about where the leather industry in China and South East Asia is headed, and whether the theme of the 3rd WLC “The Leather Revolution” coincides with the changes in China and the reality at the trade fair.
A as business platform and meeting place where opinions can be exchanged and information gathered, ACLE is the venue par excellence as the European leather sector gets back into gear after the traditional August vacation break.