EXPORTS of leather and leather products are picking up because the industry has improved its working and international demand is rising. Going by the current trends, the full year earnings from this sector may go beyond $1 billion.

However, one structural problem keeps haunting the exporters. Tanneries are unable to procure hides and skins in the required quantities. During this Eid-ul-Azha only 1-1.2 million hides and skins could be procured in Karachi against 1.5 million last year.

To meet its requirements, the industry would have to import some quantity of tanned leather. The shortage can be overcome on a permanent basis by the government incentivising farmers for rearing more livestock and by curbing smuggling of live animals. However, export also suffers from lack of brand power and missing business links between small and big export houses.

Leather-made products like belts, purses/valets, undergarments, leather boxes, briefcases, leather-made covers for household articles and decoration pieces contribute only marginally to export earnings. Small manufacturers of these products which have a lot of export potential continue to cater to the domestic market because they do not have the skills for managing exports.

Big exporters manufacture such products only when they have orders from foreign buyers. Seldom do they realise that they need to include manufacturing of small leather items as a regular product-line to create for themselves a niche, both in domestic as well as in the international market and to establish brand power.

This disconnect needs to be bridged for exporters to remain competitive in foreign markets. Many years ago Turkey faced the same problem which it overcame and now India is following suit. That is why growth in Indian leather industry and exports is faster than of Pakistan. In Karachi alone, there are scores of small manufacturers of leather articles. They occasionally try to establish long-term relationships with big manufacturers but their enthusiasm is hardly reciprocated.

Once I had orders worth more than $50,000 from Spain for miscellaneous leather products. I ran from pillar to post to know if big leather industries can sell to me leather wastages of high quality at competitive prices. I planned to use them for producing what the buyers had ordered for. Finally I got what I wanted through a ‘broker’ but at high prices which reduced my margins.

Later, I was told that the group of people I was dealing with were employees of a large local tannery. They used to buy tanned leather wastages from there at damn cheap prices and sold them to shoe-makers in the neighbourhood.

In Jodia Bazar one comes into contact with several brokers of tanned leather. But it is difficult to find suppliers of fine quality tanned leather wastages that can be used in manufacturing miscellaneous export items.

Yet another problem is finding skilled people well-versed in the art of making leather goods. In localities like Korangi, Orangi, New Karachi, Nazimabad and Liaquatabad there are small-scale factories for leather manufacturing. But these are mostly run by semi-skilled workers and unskilled helpers under the supervision of one or two semi-literate seniors.

The government has released funds for development of value-addition in leather sector under its three-year trade policy 2009-12 but most of the funds have gone to large exporters and small exporters got nothing. That is unfair. With a few millions of rupees spent on upgrading of production chain of small value-added leather goods, the government can give a big boost to exports.

Nowadays the use of computer designing in value-added products is very common. The costs are at unmanageable levels for those who outsource the designing of value-added products to software development houses or hire computer experts to do the job. Government funds should also be allocated for development of dedicated computer designing institutes for leather industry and all exporters irrespective of their size or market outreach should be encouraged to avail of the expertise which would be available at such institutes.

The writer is an exporter of small leather articles.