ACLE 2019 Final Report – ACLE sets the stage for coping strategies

11 October 2019

ACLE 2019 Final Report – ACLE sets the stage for coping strategies

The All China Leather Exhibition (ACLE) took place in early September amid the announcement of China’s latest round of retaliatory tariffs toward the US. These new tariffs may mostly affect China’s salted and wet blue hide imports. The continuous escalation of China-US economic and trade frictions have greatly harmed the worldwide economy including the leather industries of China, the US as well as of other countries. However, as always the industry is resilient and optimistic, as expressed by ACLE’s exhibitors who have demonstrated remarkable ingenuity in shouldering the crisis: by prioritizing their different markets, adjusting their pricing strategies, adapting their production to sustainability requirements and last but not least, by educating consumers about the benefits of leather.

Coping with the crisis

While leather professionals admit persisting trade war and political uncertainties weigh down inhibit their success, they are learning how to make the best of a bad situation and capitalize on their advantages.

Many participants say they keep things in perspective and lessen the impact of the economic tensions by rearranging their production sites like the Swedish silicone manufacturer Elkem and the Chinese leather manufacturer Henan Prosper which have been able to switch production between their different manufacturing sites according to the markets they serve. “The trade issues have an impact on our business,” admits Henan Prosper’s Vice President, David Zhou. “But I foresee that negotiations will go on and will result in the easing of the situation,” he concluded. Zhou was proved right as hardly a week after the end of ACLE, the US administration announced a two-week postponement of the planned five per cent tariff hikes. Another round of high level talks is scheduled to take place in October.

Others like the French tannery Cuirs du Futur have adopted a seminal pricing strategy, adapting their prices to the present situation. “40 per cent of our turnover is in the US and our production is in China, so we are in no good position,” deplores their Export Manager Laurent Bové. “We try to recover some markets by keeping our prices down,” he added.

Some are exploring new emerging markets, like India, which, by common consent represents a promising one.

Several take advantage of slower business to acquire certifications such as the French tannery Raymond Jeune, which is currently applying to the Leather Working Group (LWG) certification which it hopes to obtain next year. “This certification is increasingly requested by our customers. It has become mandatory and unavoidable for tanners,” Oliver Raynaud remarks.

Some countries like Brazil are also establishing their own national certification, such as The Brazilian Leather Certification of Sustainability (CSCB) that testifies to a company’s sustainable production process.

The recrudescence of vegetable tanning and chrome free leather

Before chrome tanning became popular, vegetable tanning, which does not involve any heavy metals, was used for centuries. Trends indicate it is increasingly being used today as it is deemed more sustainable and less harmful to the environment than chrome tanning. According to Olivier Raynaud of the tannery Raynaud Jeune, offering vegetable tanning builds customer loyalty and attracts new customers.

We see vegetable tanning picking up again and we are happy about it as both the environment and our company benefit from this trend,” says Antonio Battaglia, Silvateam’s Leather Division Director.

APLF Hong Kong 2019 Best of APLF Award winner SCRD is also benefitting from the trend. Their Retan H, HN and Retan HB range are renewable and sustainable organic raw material and were rewarded as highly sustainable solutions for leather tanning. Unlike other vegetable tans, SCRD’s are 100% sourced from fruit and leaves, hence they cause no deforestation. Furthermore, they are obtained simply by grinding the raw materials, necessitating neither the water nor the chemicals required for traditional extraction processes. “Thanks to the increasing demand for vegetable tanned leather and the opening of new markets in Mexico we have over reached our budget this year,” acknowledged SCRD’s founder, Francois Raoul Duval.

However, the footprint of leather production goes beyond the tanning process. The rearing of livestock is linked with high water usage, deforestation and greenhouse gas emissions which contribute to climate change, giving leather production a bad reputation by association.

Hence, the main didactic themes this year at both the Shanghai Shake-up and Leather Naturally talks as well as at other workshops were how to improve the image of leather among consumers, especially young ones, and how to encourage designers to include leather in their collections and appreciate its value as a natural, renewable, durable, versatile and attractive material.

Not surprisingly, climate change and environmental issues are the two main sources of inspiration for the spring /summer 2020 collections as demonstrated at the APLF colors and material trends presented at ACLE by Olivier Guillemin in collaboration with the Centre Francais de la Couleur. It is apparent that their popularity will transcend the next couple of seasons, as concerns about these issues are likely to grow.