Good Morning & Welcome to our weekly news round-up! Here, we bring you the entire week's global news, insights, data, and facts from the "leather, footwear, and leather goods" industry. In a simplified and easy-to-understand manner, saving you time while keeping you informed and updated.

Here’s What to Expect in This Week's Global Leather Industry Roundup

Indian Leather Industry News
1] Union Budget 2024: Here’s Everything You Need to Know About Its Impact on the Indian Leather Industry
2] Relief for Tannery Owners as Punjab CM Mann Commits Extra Funding for Jalandhar CETP Upgrade
3] Indian Leather Industry Set to Achieve $13.7 Billion Export Target with New Budget Measures Says CLE Chairman
4] Union Minister Piyush Goyal Urges Leather and Footwear Industry to Aim for $50 Billion by 2030

International Leather News
1] Brazilian Leather Industry Secures Over $25 Million in Business from Vietnam & New York Leather Fairs
2] Pakistan Leather Industry on the Brink of Collapse, PTA Chairman Urges Government Action
3] Egypt’s Deputy PM Al-Wazir Inspects Robbiki Leather City Addressing Investor Concerns

Collaborations
1] Tata International Partners with CLRI to Boost Sustainable Leather Production to 50% Within 4 Years
2] Ecco and Spinnova Collaborate on Eco-Friendly Leather Waste Fiber Respin Set to Launch in 2025

Footwear News
1] Relaxo Footwear’s Q1 Financial Results in 21% Profit Fall to Rs.44 Crore (~$5 Mn) with Rs.748 Crore (~$90 Mn) Turnover

Leather Goods News
1] LVMH Reports €41.7 Billion Revenue in H1 2024 with Fashion & Leather Goods Leading Growth at €20.8 Billion

Expert Columns
1] 7 Key Reasons Why India Is the Top Choice for Leather Goods Manufacturing

Industry Insights
1] Can Uncaged Innovations’ $5.6 Million Seed Funding Make Bio-Based Leather the Next Big Thing or Just a Passing Trend?

LEATHER NEWS

Union Budget 2024: Here’s Everything You Need to Know About Its Impact on the Indian Leather Industry

In the Indian Union Budget for FY 2024-25, unveiled on July 23, 2024, substantial reforms aimed at boosting the leather industry's competitiveness have been introduced.

The budget notably eliminates customs duties on wet white, crust, and finished leather, reducing them from 10% to zero.

The export duty structure has also been rationalized, with significant reductions for various leather products, including a decrease from 40% to 20% for crust hides. Despite these reforms, industry reactions indicate concerns about insufficient support for tanners and the need for further investments. Overall, these measures aim to enhance export competitiveness and provide a boost to the Indian leather industry.

Relief for Tannery Owners as Punjab CM Mann Commits Extra Funding for Jalandhar CETP Upgrade

In a significant boost to Jalandhar’s struggling tannery sector, Punjab Chief Minister Bhagwant Mann has committed to covering an additional 15% of the Rs 28.64 crore (approximately US$3.4 million) needed for upgrading the Common Effluent Treatment Plant (CETP).

Originally, the upgrade costs were to be shared with the Centre contributing 70%, the state 15%, and stakeholders 15%. Following a request from tannery owners, the CM has increased the state’s contribution to 30%, amounting to Rs 8.6 crore (approximately US$1 million).

This decision, prompted by the industry's financial struggles and declining operational capacity, aims to address environmental compliance issues and help restore the sector’s client base. The upgrade is crucial as the number of operational wet units in Punjab has halved and their capacity has significantly dropped.

Brazilian Leather Industry Secures Over $25 Million in Business from Vietnam & New York Leather Fairs

In July, the Brazilian leather industry had a standout month with significant participation in international fairs, including Shoes and Leather Vietnam and Lineapelle New York.

Brazilian companies reported over $3.1 million in immediate deals at the Shoes and Leather Vietnam fair, with an anticipated $10.55 million in potential business over the next year. The event’s results were three times higher than the previous year, highlighting Vietnam's growing role in Brazil's export strategy.

At Lineapelle New York, 14 Brazilian exhibitors secured $2.55 million in deals, with projections reaching $14.9 million by July 2025. Looking ahead, Brazil will continue its global presence with upcoming events in China, Italy, and Mexico, reinforcing its commitment to expanding its leather trade internationally.

Pakistan Leather Industry on the Brink of Collapse, PTA Chairman Urges Government Action

The Pakistan Tanners’ Association (PTA) has issued a dire warning about the severe crisis facing the country's leather industry, highlighting the urgent need for government intervention.

Muhammad Mehr Ali, PTA Chairman, pointed out that new taxes imposed in the 2024-25 Federal Budget, including a 2% Additional Customs Duty and a 5% Regulatory Duty, are intensifying financial strains on the industry, which is crucial for Pakistan’s GDP.

The sector is also suffering from a critical shortage of financial capital, with the government owing approximately Rs2.5 billion (around US$9 million) in unpaid taxes and duty drawback claims. This financial instability has already led to the closure of several units and threatens the survival of many others. Without immediate government action, the industry faces potential collapse, endangering export revenues and economic stability.

Indian Leather Industry Set to Achieve $13.7 Billion Export Target with New Budget Measures Says CLE Chairman

In a strategic move to enhance exports and job creation, the Indian government has announced a reduction in export duties on wet blue and crust leather from 40% to 20%, alongside expanding the Duty-Free Scheme to include additional inputs like wet blue, crust, and finished leathers for footwear exporters.

This policy aims to support the leather sector's ambitious export target of USD 13.7 billion by 2029-30, a substantial increase from USD 4.69 billion in 2023-24.

Rajendra Jalan, Chairman of the Council for Leather Exports (CLE), praised the initiative, emphasizing that further reduction of the duty to 0% on crust leathers could potentially boost exports by USD 1 billion in the next 2-3 years. The measures also include support for women in the workforce through initiatives like hostels, crèches, and skilling programs, aiming to significantly enhance female participation in the sector.

FOOTWEAR NEWS

Relaxo Footwear’s Q1 Financial Results in 21% Profit Fall to Rs.44 Crore (~$5 Mn) with Rs.748 Crore (~$90 Mn) Turnover

Relaxo Footwears Limited reported a 21% decline in net profit for Q1 ending June 30, with earnings of Rs. 44 crore (approximately US$5.1 million), down from Rs. 56 crore in the same period last year.

Despite this, the company's turnover increased slightly to Rs. 748 crore (around US$90 million) from Rs. 739 crore year-over-year. Chairman and Managing Director Ramesh Kumar Dua attributed the modest revenue growth to challenging consumer sentiment, including election-related disruptions and extreme heat, which affected demand.

Rising labor costs and capital investments in production capacity, leading to higher depreciation, have further squeezed profit margins. The company opted not to pass increased costs onto consumers to remain competitive, impacting profitability this quarter. As Relaxo navigates these market challenges, restoring profitability in future quarters will be crucial.

LEATHER GOODS NEWS

LVMH Reports €41.7 Billion Revenue in H1 2024 with Fashion & Leather Goods Leading Growth at €20.8 Billion

LVMH Moët Hennessy Louis Vuitton reported a revenue of €41.7 billion for the first half of 2024, reflecting a 2% organic growth despite a challenging geopolitical and economic environment.

The group's profit from recurring operations reached €10.7 billion, with a robust operating margin of 25.6%, although net profit dropped to €7.3 billion due to exchange rate impacts. Key markets showed varied performance: Europe and the US saw positive trends, Japan experienced double-digit growth driven by Chinese tourists, and the rest of Asia also performed well.

The Fashion & Leather Goods segment achieved a 1% organic revenue growth, with Louis Vuitton and Christian Dior leading the way. Despite a 6% decline in segment profit, operating margins remained historically high. LVMH’s financial metrics include a 74% increase in operating free cash flow and a 12% rise in equity. The group remains optimistic for the second half of 2024 and plans to continue its focus on quality and brand desirability. An interim dividend of €5.50 is scheduled for December 4, 2024.

EXPERT COLUMNS

7 Key Reasons Why India Is the Top Choice for Leather Goods Manufacturing

by Sambit Bhattacharya | Vice President of Global Marketing at Rajda Industries & Exports Pvt. Ltd.

India's leather goods industry is a global leader, exporting products to over 50 countries, with the USA, Germany, the UK, Italy, and France accounting for approximately 79.57% of its exports.

In FY 2021-22 and 2022-23, India exported leather goods valued at $1.05 billion and $1.11 billion, respectively. The USA, the largest importer, accounted for 25.19% of these exports, with significant increases in imports valued at $598.8 million. India boasts an annual leather availability of 3 billion sq. ft., representing 13% of global production.

The country's manufacturing advantages include cost-effective production, a skilled workforce, and high-quality leather. It adheres to international environmental standards and sustainable practices while benefiting from strong government support and world-class infrastructure. India's leather industry remains a top choice for global brands due to its competitive pricing, advanced technology, and reliable delivery.

INDUSTRY INSIGHTS & ANALYSIS

Can Uncaged Innovations' $5.6 Million Seed Funding Make Bio-Based Leather the Next Big Thing or Just a Passing Trend?

UNCAGED Innovations, a New York-based biomaterials start-up, has secured funding from venture capital firms and Jaguar Land Rover to advance their grain-based leather alternative.

Their patent-pending BioFuze technology, which uses structural proteins from grains and other bio-based elements, aims to replace traditional animal collagen in leather. This process employs roll-to-roll manufacturing techniques, producing a material that mimics leather’s texture and performance.

The bio-leather is made from a range of materials including grain byproducts, natural rubber, and algae extract, and ranges from 0.6 mm to 3 mm in thickness. It boasts a significantly lower environmental impact, with 95% less greenhouse gas emissions, 93% less water usage, and 72% less energy consumption compared to traditional leather.

However, challenges such as performance, scalability, and consumer preferences may hinder its potential to disrupt the industry fully. Despite these hurdles, UNCAGED Innovations represents a promising step towards more sustainable materials in the leather industry.

Written, Reviewed & Published by Leathernews.org team