20 May 2019
We are now regularly hearing about hides being thrown away. We heard it first about skins in New Zealand, and then about hides in Latin America, followed by sheepskins in the UK. Now it is coming from the USA of all places. The latest I have read is from an article about Ethiopia, where the tanners were blaming the problem on the ban on part processed leather exports. Underlying it, without doubt is a reduced demand for lower grades.
Rather more decades ago than I like to recall Bob Higham (you may remember him as an Editor of Leather International long before APLF and ACLE began) and I spent some time looking at alternate uses for the bottom 5-10% of hides, in the belief that the cost of transforming them into leather was too much for the price likely to be achieved. We looked at sausage casings and gelatine, spending quite a bit of our time and money on travel, but never found a commercially viable approach, nor very much industry interest.
Demand for leather has always more or less met the supply and this is part of the reason – the other part is probably foolishness – why tanners have been nervous about strategic marketing. It is also in a way why Bob Higham and I obtained no traction with our bottom five per cent concept. Instead industry thought that with limited supply it would be easy to create a demand that could not be met, interfering with a delicate price balance out of which the tanner struggles to retain a very small margin. Yet quite suddenly it appears this equilibrium between demand and supply has been broken; exactly what many of those who pushed for the foundation of Leather Naturally feared, as they foresaw many issues looming over demand going forward.
What will happen if certain grades stop selling?
Since the meat industry became industrially established to feed growing urban populations hides and skins went from abattoirs to tanneries largely via auctions. As these ended in recent years tanneries started direct relations with abattoirs or worked via hide dealers to get the hide types and grades they wanted. We must now ask the question of what will happen to this supply chain if certain grades stop selling?
From a purely tannery centric point of view there will be too many tanneries for the work available, which is already causing problems in some parts of the industry and was covered in some degree in What are Tanneries for Part One. Looking wider we must consider the long-term future of the unwanted hides and skins. Their current destination in landfill is a consequence of there being no other volume outlets than the leather industry, a natural outcome of history. So burying is merely the cheapest available option today for some plants. It would be wrong to consider that this will be the long-term solution if tanneries will not buy them.
Hides and skins come into the segment that abattoirs define as inedible products, which include blood, viscera (intestines), hair, bones, fat as well as hides and skins. They may not be immediately edible – although some items have historically been given to pigs directly – the outlets include pet food, cosmetics, biofuel, animal feed and the oleochemical industry. This latter is often described as “ingredients derived from organic raw materials such as natural oils and animal fats (tallow) that offer sustainable and high performance alternatives to many petrochemical originated products”. They are used in agriculture, cosmetics, pharmaceuticals and food.
Hides and skins which are essentially collagen mixed with fats and a few other materials, could take this route, although it seems a waste; but there has been demand for them to go into casings for sausages and into gelatine. Currently for gelatine only raw and limed trimmings or unwanted splits are routinely used, although whole pigskins are also frequently utilised.
The economics of all these, along with the extraction of other chemicals present such as hyaluronic acid (the very valuable hydrating skin treatment sold in the cosmetic industry) have never really been tested with leather usage taken out of the equation. So currently the loss of the tanning outlet leaves no established supply chains, and landfill is the first choice.
The quantities involved are enormous, as the tanning industry has kept saying in recent years, so if tanneries continue to be unable to take some grades new supply chains will certainly be set up and a different set of economic solutions will start to be applied to the hides and skins business. Whether that will be initiated at the abattoir or the hide dealer we will have to wait and see, but there is no stability in throwing hides away.
Could a new outcome actually compete with leather for the better hides?
If a new business network is established taking certain hides and skins away from leather into another end uses a new economic and technological network will be established. The outcome will inevitably be unpredictable. Could it prove to be more secure and stable than the leather industry? Could one result be that in due course it will actually compete with leather for the better hides? We certainly cannot assume that any alternate uses for our raw material will neatly dovetail into our requirements for grades and pricing.
Without question it would be better for the leather industry to sweep up all the hides and skins directly from the abattoirs and find the solution themselves. First, and best to get really creative and make sure they all end up as finished leather. The world cannot afford to lose the sustainable resource of leather, and tanners themselves have to admit that we did much of the damage by turning so many lower grade skins into a plastic lookalike commodity.
If there are some hides and skins that do not make leather then the tanners should look to redefining the “rendering” business. Going beyond the old wet and dry rendering into really looking at which of the options is best for the environment and the industry to deal with any raw material that might not make it into leather. We need hides and skins for leather and should work to avoid new external supply networks to dispose of them being established outside of our control.