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Leather production constrained by lack of investment in tanneries and components

CAIRO: There is a by-product to the nation s beef consumption. The conversion of animal skin into leather products has created a community of artisans and an industry for clothing apparel. International leather consultant Maher Abou El-Khair explains the roots of the industry in Egypt. The production of leather products initially developed through interaction with …


CAIRO: There is a by-product to the nation s beef consumption. The conversion of animal skin into leather products has created a community of artisans and an industry for clothing apparel.

International leather consultant Maher Abou El-Khair explains the roots of the industry in Egypt. The production of leather products initially developed through interaction with Italian manufacturers after World War II, but the industry remained a handicraft until the 1960s, when there was a boom in exports to the Soviet bloc.

Since the dissolution of the Soviet Union in 1991, production of finished leather goods has primarily served the domestic market. Abou El-Khair says that the penetration of the export market now presents a tremendous opportunity and challenge to the industry.

Unlike textiles, Egyptian leather does not have an international reputation, according to Sherif El-Metainy, chief executive officer of Elegant Fashions, and this is an obstacle to attracting foreign buyers. El-Metainy explains that European importers would rather turn to producers in Pakistan and India that have a long history of manufacturing leather at a lower cost than Egypt.

Nevertheless, Abou El-Khair says that the skin from cows, sheep, goats and other animals is of exceptional quality in Egypt due to the method of grazing such animals and the nutritional content of domestic feed. The fact that approximately 80 percent of animal skin is exported in a semi-processed form is a testament to the high quality of Egyptian leather.

But the dearth of investment in local tanneries, which convert semi-processed leather into finished leather, has resulted in finished leather that is not up to the standards of foreign markets, according to El-Metainy. This is part of the reason for the export of most semi-processed leather.

The growth of domestic production of leather end-products will not only increase demand for finished leather, it will also stimulate an industry for related components. Abou El-Khair estimates that 80 percent of the finished leather products manufactured in Egypt are in the form of shoes.

A substantial portion of the cost of manufacturing shoes is made up of soles, insoles, adhesives and other non-leather inputs. Local production of such components forms a necessary base of a leather footwear industry. While component factories do currently exist in Egypt, Abou El-Khair says that there is substantial opportunity for growth in both domestic and foreign markets, particularly to African countries where there are established footwear industries but no domestic component production.

For finished goods, Abou El-Khair says that exports to former Soviet republics need to be revived and that there are opportunities in Africa and in other Arab countries. He adds that Europe is an important market because it sets global fashion trends.

The United States is a large potential market, but El-Metainy explains that orders from U.S. buyers tend to be very large and with a tight delivery period. Egyptian producers generally do not have the capacity for such orders and local tanneries do not supply leather fast enough to meet delivery deadlines.

El-Metainy concludes that leather manufacturers are trying to transform their business from an artisan trade into a modern industry. Meanwhile, a growth in exports will require establishing relationships with foreign buyers, promoting Egyptian leather products as was done with Egyptian cotton and ready-made garments in recent years and increasing investment in tanneries and component factories.

Abou El-Khair explains that component manufacturing projects can be done in collaboration with leading suppliers in Spain and Italy. The development of tanneries, adds El-Metainy, requires technology in the form of machinery and chemicals, and Turkish, Spanish and Italian companies possess the technology and are well-suited as partners in such projects.

Topics: FJP

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