9 April 2024

Leather: Industry - Europe complains, Asia grows and Latin America can be the great alternative

In the recent newsletter from Leatherbiz Market Intelligence – the portal of the British magazine World Leather – published on March 12, the publication refers to the increasing contrast between the situation of the leather industry in Europe and Asia. And it predicts that the European manufacturing sector may see its current demand problem worsen. By Mauricio Herzovich, Director CueroAmérica.

It says that in Asia, low leather prices and production costs have helped create an environment in which leather manufacturers, who serve the retro-loving sports footwear market, the furniture sector and brands of clothing, they are seeing an increase in demand.
Meanwhile, in Europe, the bulletin says, leather producers may have advantages in delivery times, reliability, creativity, transportation costs, carbon footprint, smaller batch sizes and, above all, flexibility, but they are struggling to make this profitable. Leatherbiz acknowledges that “the paradox is that politics and the self-imposed mania for certification and regulation in Europe are hampering the entire supply chain and may make it impossible to continue.”

Their conclusion is that, sooner or later, the low level of “capacity utilization rates” that many leather manufacturers in Europe are experiencing will have their consequences. If orders continue to fall short of the production capacity of European tanneries, that capacity will have to be reduced, it says, adding: “We have to accept the economic reality.”

This gloomy outlook for Europe does not reach Latin American industries, which for various reasons have clear advantages. After the pandemic and the disturbances it caused in global maritime transport, and now with the complications that for different reasons obstruct the passage of ships through the Suez and Panama canals, “nearby production” or in non-conflict regions.

And Latin America, which maintains a significant availability of first-class hides and industries, can become a great alternative.

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