Improvement Seen at Shanghai Leather Show

SHANGHAI — Market conditions for Chinese and Asian leather producers are improving, but challenges persist.

That was the assessment of exhibitors at the 11th All China Leather Exhibition, which ended its three-day run Sept. 4 at the New International Expo Center here.

“This year has been very good,” said David Trow, marketing account manager for Silver Fern Farms, which sells New Zealand spring ram skins. “I’ve found that for our business the response has been very positive. We achieved all our targets, meeting three major and over 10 minor customers.”

Su Chaoying, secretary general of the China Leather Industry Association, said in a speech at the exhibition that China’s exports and imports remain down, but are starting to get better. China’s exports of fur, leather and leather goods dropped 10.8 percent in June compared with May, but that was an improvement on May’s 12.3 percent decline from April. Leather imports fell 17.7 percent in June and 28.1 percent in May.

Total leather exports in the first half of the year were valued at $18.24 billion, a decline of 7 percent year-on-year, and sector imports slumped 24.8 percent to $2.04 billion. However, China’s leather production capacity continues to expand and output in June grew 8.2 percent month-on-month.

The exhibition’s senior event manager, Perrine Ardoin, also heralded the beginning of a recovery for the leather industry despite a drop in exhibitors to 1,050 from 1,126 in 2008.

“Many key professionals at the fair talked optimistically about economic recovery,” she said. “At the opening of the fair we believed it to be business as usual and this was more than confirmed by busy foot traffic on fair grounds. Exhibitor participation was strong, but this is the result of activity from the other end of the supply chain: buyers who may have been holding back in view of the uncertain forecast are now under pressure to replenish their inventory.”

Silver Fern Farms’ Trow said he sees improving market conditions for finished garments. His company exports 40 percent of its ram skins for rugs and garments to China and about 80 percent of that is reexported to other countries.

“The trend this year is the stability of the market,” Trow said. “Last year it was falling, but this year it has stabilized. I’ve seen this stability for the last seven months, as companies are willing to continue to work on their bases.”

His optimism was echoed by Leyli Do anöz, department chief of Trade Fairs & Promotions for Turkey’s Aegean Exporters Association.

“Turkish leather companies have seen the light at the end of the tunnel,” Do anöz said. “During the crisis, everyone prefers to stay at their homes waiting for the light, but Turkish business people don’t like waiting and see the crisis as an opportunity.”

The Aegean Exporters Association this year brought 17 tanneries, two machinery companies and five chemical companies to the fair.

“It is more than last year and we expect even more companies to come next year,” Do?anöz said. “We have some companies that are very satisfied. Most companies have existing relationships and partnerships in China, and are here to show up, and show their commitment.”

However, confidence in a possible rebound was not universal, especially among local and regional exporters.

“It’s been OK, but we haven’t really found any potential customers,” said Clyde Wang, a product manager for Henan Prosper, a shoe leather producer that bills itself as the world’s biggest shearing supplier. “People are here to look around, but are not serious buyers. And the demanded price levels have gone down somewhat. Our conditions are high, but this year the buyers are not very professional and not what we need.”

Patcharapuck Satittawesombut, president of Thai purse makers Union & Worldclass, said: “Last year was better than this year because there were better people coming. The economy is not good and this year is even worse than last year, and fair attendance is lower.”