Daily Times

KARACHI: The export of leather goods and allied articles would suffer a loss of around $300 million to $350 million in case the government fails to ensure uninterrupted supply of electricity and gas to the leather industry for next two months.

This was necessary for the smooth processing of hides and skins of sacrificial animals collected on eve of Eidul Azha as well as the need of the leather sector for smooth execution of exports orders and fetching precious foreign exchange for the promotion of country’s exports.

Pakistan Tanners Association (PTA) senior member Agha Saiddain said this year more than 18 million hides and skins were received from across the country, adding that goatskins stood at 8.93 million, bulls at 4 million, sheep at 3.2 million and camel skins at 600,000.

He said this raw material industry desperately needed uninterrupted supply of power and gas to enable the leather manufacturers for smooth processing of these perishable hides and skins within the humid climate of country, otherwise PTA’s leather manufacturing units would be in great problem in processing the raw material to become finished leather with necessary addition and face financial loss.

He said mishandling and inexperienced way of preserving skins by stakeholders during the three days of Eid also inflicted a loss of around 20 percent of the collected stuff. The country would also be deprived of the foreign exchange in failure of timely execution of export orders for meeting the foreign buyers’ demands, he added.

The leather sector exports have declined by around 19 percent during the last seven fiscal years from $1.221 billion in FY 2008-09 to $1 billion in 2015-16, Saiddain said, adding that the growth rate of leather exports reduced to 14 percent during the last seven years as against positive growth in the region with 49 percent, 42 percent, and 105 percent in China, India and Bangladesh respectively.

He said the Commerce Ministry should discuss problems of this important sector, which was providing jobs to about one million people across the country. “Pakistan has lost 36 percent global market share whereas the global growth rate from 2009 to 2015 was 42 percent. The global share of Pakistan was 1.3 percent during 2007-08 in the total global market size of $99 billion. The global market has grown to $141 billion during 2015 whereas Pakistan exports reduced by 15 percent during this period,” the PTA member informed.

It was strange that a country rich in livestock has just 0.77 percent global market share as against global share of 38 percent, 15 percent, 6.6 percent, and 3.55 percent for China, Italy, Vietnam and India, respectively, Saiddian lamented.

He said the governments of these countries were paying special attention to the leather sector of their respective countries being labour intensive and providing jobs to the weaker section of the society. “India alone has injected Rs 4,000 million, Rs 9,130 million and Rs 12,510 million under 10th, 11th, and 12th Indian Leather Development Plans, respectively. On the other hand, under Strategic Trade Policy Framework (STPF) 2012-15, Leather Export Promotion Council was formed without any single initiative by the government during last two years,” he added.

PTA has been requesting time and again to the government for ‘priority status’ of the sector, but the Leather Export Promotion Council never took a single practical step towards the betterment of the sector, he deplored, adding that export of wet blue leather was another important factor retarding the growth of leather sector.

“Pakistan was at the second position after Italy as far as quality of leather was concerned and under these circumstances, it was not difficult for leather industry to achieve the same growth rate of 50 percent,” the PTA member concluded.