29 August 2018
Taking place in Shanghai from 29 – 31 August, ACLE is celebrating 20 years since its launch in Beijing in 1998 alongside the 30th anniversary of the founding of the China Leather Industry Association in 1988.
This year the focus of the ACLE is on innovation, with a series of areas to display, and activities to discuss the future and endless opportunity of leather. Details of the 2018 Special Event Agenda at ACLE are presented in a separate format in the media pack.
Backdrop of the 20th anniversary of ACLE
2018 has been a challenging year for the global leather industry. There are ample supplies of raw materials available for the tanning industry and more in the pipeline with over 4 million hides sold but not yet shipped in US warehouses and cattle on feed numbers between 8% – 9% higher than one year ago.
At the same time, despite buoyant auto sales and a sound performance in the furniture industry, demand for shoe leather which traditionally accounted for over 50% of global leather demand continues to fall as it has done since 2015.
The supply / demand picture described above has unfortunately been exacerbated by ongoing trade tensions between China and the US with both countries threatening huge tariffs on each other’s exports. This economic / political scenario has tended to undermine confidence in trade generally and could well have hit China’s footwear exports to the US and US hide and leather exports to China.
The boom in sneaker demand and production that mainly uses synthetics allied to plentiful bovine hides being produced from the meat industry has forced prices lower to levels not seen since the financial crisis of 2008/2009.
Thus, the backdrop to ACLE 2018 is by far from encouraging but key questions about the leather sector must be asked:
Where is the demand?
Nevertheless, such supplies are neither in China nor in the emerging leather sector of the ASEAN nations that are accelerating their progress by taking advantage of their lower labour costs compared to China.
Vietnam, as China’s main competitor in the leather footwear sector, has to import 70%+ of the leather it uses. The nearest main sourcing hub where buyers from Vietnam and other nations such as Cambodia can meet international supplies is at ACLE in Shanghai.
For this reason the Organisers of ACLE – APLF Ltd and the China Leather Industry Association (CLIA) – expect buyers from China’s leading tanneries as well as tanners from other ASEAN nations that need to import raw materials supplies and require a hub from where to source them. The Organisers will be promoting the fair not only in China but also in ASEAN.
Imports needed to feed China’s leather sector
According to official CLIA figures, leather imports to China in 2017 were as follows:
– Raw hides and skins were 1.25 million tons in quantity and US$2.2 billion in value.
– Semi-finished leather imports were 706,200 tons in quantity and US$1.46 billion in value,
– Finished leather amounted to 116,800 tons in quantity and US$1.99 billion in value.
Total leather imports by China in 2017 from international suppliers in value were: US$5.68 billion
This is where the export sales opportunity lies for international tanneries wishing to serve the Chinese leather sector with the added bonus of coming into contact with buyers from ASEAN nations at ACLE.
2018 is a special year for China’s leather sector and ACLE
This year marks the China Leather Industry Association’s (CLIA) 30th anniversary that since its founding has led to great improvements in China’s tanning industry, reaching state of the art levels in sustainability standards.
At the same time, it is ACLE’s 20th year as the platform where those changes were brought forward and have positioned ACLE as the best showcase of this shift in manufacturing, which, as Manufacturing 4.0, encompasses automation, technological innovations to allow sustainable processes and added efficiency.
This process in China’s industry over the last three decades has transformed it from a low cost manufacturing export-driven economy to a technologically advanced and sustainable manufacturing nation driven by demand from the huge domestic market.
Focus still on China’s automotive sector
Auto sales continue to boom in China that is by far the world’s biggest buyer of new cars. This has encouraged specialist firms such as Adient, Faurecia and Lear that serve the automotive seating industry to set up plants in China.
With more than 24 million new passenger vehicles sold in China in 2017 and some 5 million light trucks and other vehicles this is, historically speaking, the biggest opportunity for auto leather seating that has ever existed.
The strength of the auto market is buoyed by an annualized increase in retail sales of 9.7% far outstripping any other major economy.
And don’t forget footwear
Despite progress being made essentially by Vietnam in footwear exports to the US and Europe, China’s leather shoe production is still light years ahead of what is produced in Vietnam and the rest of the ASEAN nations put together.
According to the report presented by the CLIA during APLF, China manufactured 4.48 billion pairs of leather shoes in 2017. Vietnam manufactured just a respectable 404 million. In the case of both countries much of this leather in semi-finished form is imported to be finished in local tanneries to feed the production lines.
At the same time there are other key sectors for leather demand that simply cannot be ignored.
Quality Buyers from China and Overseas
With more than 22,000 buyers attending ACLE each year of which 19,000 originate from the major manufacturing and tanning provinces of China, ACLE is by far the most dynamic business platform available to penetrate the Chinese markets.
These are the main buyers who will visit the 1,087 exhibitors participating at the fair.
This year, the organisers has invited groups of Vietnamese manufacturers and Chinese furniture producers to visit ACLE. Chinese designers are also invited to attend workshops on leather garments, footwear and leather goods, conducted by renowned experts from Italy and the Netherland. All of the groups will also attend 15 minute Leather Naturally Talks, held by Leather Naturally and visit the Leather Naturally Zone in E1 and Technological Innovation Trend forum in E3.
ACLE international presence for 2018
The exhibition halls at the Shanghai New International Expo Centre (SNIEC) in Pudong, will be taken by tanners and the world’s leading chemical suppliers seeking to consolidate their business in China itself and harvest new contacts for the future.
These companies come from the world’s leading tanning nations such as USA, France, Spain, Germany and Brazil amongst others and companies supplying chemicals for the tanning industry will be the most renowned internationally and these often use ACLE as a platform to launch new technologies and products to the China market.