In the wake of the outbreak of coronavirus, which has badly hit exports of leather goods from the leather complex in Bantala, there are some green shoots visible in the Kolkata leather industry with fresh orders of industrial safety gears pouring in from the US.
The US has been mainly sourcing industrial safety gears from China but the outbreak has prompted the US to shift the sourcing point. This can partly offset the losses the tanners have been making with their exports consignments of leather goods lying packed for weeks following the outbreak of coronavirus.
According to Imran Ahmed Khan, general secretary of the Calcutta Leather Complex Tannery Association, there have been hundreds of e-mails pouring in placing orders of industrial safety gears from both the US and Europe. The orders that have come during March are worth more than `100 crore and these consignments will have to be delivered by air.
"This is a new segment in which the tanners of Calcutta Leather Complex will have to work. If we can deliver according to the quality requirements the orders will continue to come to us," Khan said, adding initially "we had the problem of sourcing sodium sulphide, which was imported from China to process raw leather.
But, now we have secured it from a local supplier, which will enable us to manufacture the industrial gears.
But the problem lies with the export consignments of finished leather goods, worth more than Rs 500 crore, which are lying locked in the tanneries itself. Bantala Complex has 400 tanneries and 60 leather goods manufacturing units, which export leather goods like footwear, wallets, bags, belts and industrial goods worth Rs 5,000 crore per annum. The main markets for export are Italy, Germany,South America, Far East Asia and America.
China was the sourcing point of raw material for processing raw leather but with the advent of coronavirus, production had to be dragged down by 35-40%, most tannery owners said. Although local sourcing would enable them to make up for 15-18% production that would be more than sufficient at the present demand scenario.
Importers from Italy and Germany are asking to keep their orders on hold. "I have processed 12 tonne of leather worth more than Rs 1 crore to make wallets and footwear for my importer in Germany but now he is asking me to keep the order on hold. The processed leather are now lying for more than 25 days and I have no clue what to do with them," Zia Nafis, a tannery owner said "Demonetisation was a great blow to the leather industry and before we could recover coronavirus came as another great blow," Ramesh Juneja, president, Calcutta Leather Complex Tanners Association opined.