PROJECT REPORT ON Indian Leather Garments

Faculty guide: Mr Sharad Shrivastav

Submitted byVibhor Maheshwari DFT -07 6thSemester

PROJECT REPORT ON Canvas Shoes

Faculty guide: Mr Vivek Raina

Submitted byVibhor Maheshwari DFT -07 6thSemester

ABSTRACT

As a part of my minor project I took up the study of the Indian Leather Garments. I took up this project to understand the Indian leather Market , the employment it provided category wise , the production capacity product wise , their market share, major leather related centres , the availability of leather , the export potential and the overall SWOT of the Indian Leather industry whereby Leather garments are a part of it. In detail report is discussing about the Indian leather garment in specific , with the information about the manufacturing centres , Indias export , global exporting countries , global importing countries , with the export potential , the growth rate , Indias share in the world market as well about the brands for which India makes the leather Garments. Report also tell us about the basics of leather garments , their use , how they are make , the type of leather used to make it , the other components required to make it as well how to maintain the leather garments. Lastly it tells us about the detailed story of the European Union , its market share , its growth , the type of product required and the competitor countries which also aims at E.U markets.

OBJECTIVE
To study the size and scope of Indian leather Garments market.

SUB- OBJECTIVES
To know the basics about the Indian Leather Industry. To understand the Indian Leather Garments industry. To understand the global Leather Garments market and about competitors. To study in detail the E.U markets and its potential.

RESEARCH METHODOLOGY
TYPE OF RESEARCH: Exploratory research DATA COLLECTION METHOD:

Secondary data collection: magazines, journals, internet. Primary data collection: Observation approach and informal interview with the faculties at
FDDI. RESEARCH TIMELINE: 13th December 2011- 28th March 2012

Table Of Contents

Indian Leather Industry. Structure of the Industry. Raw Material Supplies. Export Potential. SWOT analysis. Leather Garments industry in India. State wise manufacturing units. Basics about leather Garments. Global Scenario of leather garments. Indian Scenario of leather garments. Components required to make leather garments. Promising E.U markets for export. Conclusion.

Indian Leather Industry

The leather industry occupies a place of prominence in the Indian economy in view of its massive potential for employment, growth and exports. There has been an increasing emphasis on its planned development, aimed at optimum utilisation of available raw materials for maximising the returns, particularly from exports. The exports of leather and leather products gained momentum during the past two decades. There has been a phenomenal growth in exports from Rs.320 million in the year 1965-66 to Rs.69558 million in 1996-97. Indian leather industry today has attained well merited recognition in international markets besides occupying a prominent place among the top seven foreign exchange earners of the country. The leather industry has undergone a dramatic transformation from a mere exporter of raw materials in the sixties to that of value added finished products in the nineties. Policy initiatives taken by the Government of India since 1973 have been instrumental to such a transformation. In the wake of globalisation of Indian economy supported with liberalised economic and trade policies since 1991, the industry is poised for further growth to achieve greater share in the global trade. Apart from a significant foreign exchange earner, leather industry has tremendous potential for employment generation. Direct and indirect employment of the industry is around 2 million. The skilled and semi-skilled workers constitute nearly 50% of the total work force. The estimated employment in different sectors of leather industry is as follows: Sector Flaying, curing & Carcass Recovery Tanning & Finishing Full Shoe Shoe Uppers Chappals & Sandals Leather Goods & Garments Total Employment 8,00,000 1,25,000 1,75,000 75,000 4,50,000 1,50,000

Structure of the industry The leather industry is spread in different segments, namely, tanning & finishing, footwear & footwear components, leather garments, leather goods including saddlery & harness, etc. The estimated production capacity in different segments is as under Product Leather Hides Skins 64 million pieces 166 million pieces Capacity

Footwear & Footwear Components a) Shoes b) Leather shoe uppers c) Non-leather shoes/chappals etc Leather Garments Leather Products Industrial Gloves Saddlery 100 million pairs 78 million pairs 125 million pairs 6 million pieces 70 million pieces 40 million pairs 6000 pieces

The major production centres for leather and leather products are located at Chennai, Ambur, Ranipet, Vaniyambadi, Trichi, Dindigul in Tamil Nadu, Calcutta in West Bengal, Kanpur in Uttar Pradesh, Jalandhar in Punjab, Bangalore in Karnataka, Delhi and Hyderabad in Andhra Pradesh.

Raw material supplies There exists a large raw material base. This is on account of population of 194 million cattle, 70 million buffaloes, 95 million goats. According to the latest census, India ranks first among the major livestock holding countries in the world. In respect of sheep with 48 million sheeps, it claims the sixth position. These four species provide the basic raw material for the leather industry.The annual availability of 166 million pieces of hides and skins is the main strength of the industry. This is expected to go up to 218 million pieces by the end of year 2000. Some of the goat/calf/sheep skins available in India are regarded as speciality products commanding a good market. Abundance of traditional skills in training, finishing and manufacturing downstream products and relatively low wage rates are the two other factors of comparative advantage for India. Tanning and finishing capacity With tanning and finishing capacity for processing 1192 million pieces of hides and skins per annum spread over different parts of the country, most of which is organised along modern lives, the capability of India to sustain a much larger industry with its raw material resource is evident. In order to augment the domestic raw material availability, the Government of India has allowed duty free import of hides and skins from anywhere in the world. It is an attraction for any foreign manufacturer who intends to shift his production base from a high cost location to low cost base. Export Potential The leather industry, one of the major foreign exchange earners of the country recorded significant growth since the beginning of the decade. Today the share of the value added finished products in the total exports from leather sector are 80% as against 20% in 1970s.

SWOT Analysis of the Indian leather industry

Strengths

High Growth Ready availability of highly skilled and cheap manpower Large raw material base Policy initiatives taken by the Government Capability to assimilate new technologies and handle large projects Continuous emphasis on product development and design upgradation

Opportunities

Threats

Rising potential in the domestic market Growing fashion consciousness globally Use of information technology and decision support software to help eliminate the length of the production cycle for different products Use of e-commerce in direct marketing

Major part of the industry is unorganised Limited scope for mobilising funds through private placements and public issues (many businesses are familyowned) Difficulty in obtaining bank loans resulting in high cost of private borrowing Stricter international standards High competition from East European countries and other Asian countries

Weaknesses

Lack of communication facilities and skills

Lack of warehousing support from the government International price fluctuation Huge labour force resulting in high labour charges Lack of strong presence in the global fashion market Unawareness of international standards by many players

Leather Garment Industry In India: The second most important product made out of leather is leather garments. Modern factories have been established at small scale during the last decade mostly in the vicinity of urban areas of Chennai , Delhi , Bangalore and Hyderabad. The leather garment is relatively high leather intencive commodity. Garment sector is essentially dominated by small scale sector with large scale industries having a very negligible share of less than 3 % in garments. Due to the increase in export demand the capacity for the leather garment industry has been rising and is presently 18 million pieces per annum. The share of leather garments in total export of leather and leather products has been rising and is presently around 24% , showing a growth at a rate of 9% CAGR since 95-96 . Indias Import in world import of garments is around 11%. Our main competitors are China , Itlay and Turkey.

State wise distribution of manufacturing units. Tamil Naidu: 598 Karnataka: 40 West Bengal: 436 Maharashtra: 48 Andra Pradesh: 10 Haryana & Punjab: 8 Uttar Pradesh: 22 Delhi: 43 Any other: 12 Source: the all India skin and hide tanners and merchants association.

Leather has been used in clothing for thousands of years and remains popular today.Manufacturers have a vast range of different leathers to choose from . A total of 19,350 million square feet of leather is produced globally each year worth US$43.8 billion (International Council of Tanners figures). Around 2.2 billion square feet (11.4 percent) is used to manufacture clothing. China currently produces more leather garments than any other country. However, competition is increasing from India, Pakistan and other Asian countries, all of which have substantial herds of sheep and goats. Italy, Spain and Turkey are also large producers of high quality garment leather for home and export consumption. There are generally three different types of leather clothing:

Classic Fashion Protective.

Classic There are many types of animal skins used in the production of classic leather clothing. The black or brown nappa jacket was worn by aviators and army personnel during World War II. In the 1950s, these jackets were worn by film stars and as a result flying jackets became a popular item during the 1960s. Originally made from

soft un-split full-grain sheepskin, nappa leather is now also made from goatskin or grain split cowhide. Chromium tanned dyed-through leather is normally preferred because it can produce the softness and colour fastness required and, if necessary, be adapted to give some water resistance. Nappa leather is usually lightly finished with thin films of pigment bound in resins, such as polyurethane or acrylics. The better quality and more expensive nappa leathers are dyed and finished as aniline, with fewer grain defects and no finish coating. Sometimes a clear coating is applied, perhaps with dye, but without pigment. Nappa cowhide is produced internationally in smaller quantities than sheep and goat, but has the advantage of having a larger skin area, around 40 square feet compared with an average of five to eight square feet from goat and sheep. Suede leather for jackets in black, tan or brown is also popular. Leathers with the best properties for clothing tend to be made from sheep, lamb, goat or kidskins. These produce very soft leathers with a pleasing handle and are finished by abrasive action on the flesh side of the full skin to create a velvet-like suede appearance. Cowhide suede splits are produced from the flesh split and usually abraded on the original grain side of the split. These are often regarded as the cheaper end of the suede market. Suede leathers may be manufactured with a degree of resistance to rain by using chemicals such as silicones or fluorocarbons during tanning. Double-face sheepskins and lambskins are so-called because they are produced with the original wool attached and the flesh side abraded (sueded). These skins are primarily used to make luxury garments that provide thermal insulation in cold climates. Pigskins are produced in both nappa and suede finishes but have less scope because of the highly visible and characteristic hair follicle holes remaining after the bristles have been removed. Skivers, which are the grain split of the sheepskin (without wool), can be used to make nappa-type finished clothing leathers. However, the tear strength is low and seams require reinforcement. Skivers are more successfully used in the production of hats. Suede or nubuck leather impregnated with fats and oils is also available but it should be noted that the movement of these impregnants during wear can cause discolouration and present difficulties during cleaning, especially dry cleaning. Chamois leather, named after the Chamois, a goat-like antelope native to the European Alps, is made by oil tanning the flesh split of a sheepskin. The resulting leather is very soft and has been used for making garments such as dresses, underwear and bikinis. Chamois leather is highly absorbent to water and dirt, which is why its major use is in cleaning windows and automobiles. When used for clothing, chamois leather requires care to be taken both during wear and subsequent cleaning.

Fashion Nowadays leather is highly fashionable and many famous designers put leather garments in their collections on the catwalks of Milan, London or Paris. Colours, effects and styles vary from season to season. Furs, or the combination of leather and furs, are also used. Nappa and suede (mostly sheep and goat) are also seen in fashion clothing as they can be produced with a very soft, smooth handle, which makes them ideal for producing effects such as folding and ruching. The bright colours produced by the fashion industry challenge the tanner to make leathers that are both colourfast and fade-resistant. Designers also like to combine different skins and other materials in the same garment, which can present problems for the cleaning industry. Protective Leather, mainly full grain nappa, is popular with motorcyclists for both the protection it offers and its style. The thicker leathers tend to offer more protection. Most clothing is made with leather around 1-1.5mm thick but 2mm thick leathers can give excellent protection in accidents, often combined with tough materials such as Kevlar. However, the thicker the leather, the more likely it is to be uncomfortable and restrict movement. Reinforcement is often built in to motorcycle clothing to give extra protection to elbows and knees. Leather used for motorcycle garments is sometimes adorned with studs, tassles, epaulets and screen-printed with pictures and logos. Kangaroo leather is used for motorcycle garments in limited quantities and its advantage is that it has a higher tear strength for lower thicknesses, compared to cow and sheep leather.

Summary of leather used for clothing manufacture Origin of leather Sheep and lamb Type of leather Nappa Suede Double-face Chamois

Skiver Cow Nappa Nubuck Split Goat and kid Pig Exotic and fur-bearing animals Kangaroo Full grain and suede Full grain and suede For example snake and mink Nappa mainly

Leather clothing was once used for army, naval and air force uniforms and while it is still used in some applications, for example in gloves, there is more demand for military-style garments for the general public, such as flying jackets with a nappa sheepskin outer and wool inner lining. Leather garments, made mainly from cowhide or splits, are used to provide protection in industrial situations in the form of leg guards, sleeves, jackets or aprons. Fire, heat and water resistance may be built into the leather to give the protection needed. Cutting leather In cutting and matching the panels of leather during garment manufacture, it is essential that the main panels are from the firmer, better quality areas in the centre of the skins to avoid structural variations which can give rise to looseness, especially in the flanks of sheep leather. Lapels, collars and pocket fronts should also be cut from firmer leather. Leather from different batches should not be used in the same garment to avoid colour change problems in wear, especially after cleaning. When mixing other materials with leather, care must also be taken to avoid colour transfer from one material to another.

Caring for leather garments During the transport and storage of leather garments, prior to sale, temperature and humidity must be controlled to avoid staining and damage from mould and bacteria. Strong lighting and pollutants may also cause discolouration of the leather. Pressure marks and creases, due to packing clothing items too closely together, may be difficult to remove later. It is important for the garment producer to supply proper aftercare information to the final customer. Finished grain leathers may be wiped clean with a damp cloth. Worn or scuffed areas can be restored with specific leather products, often found at shoe repair businesses. Brushing suede after wear with a dry sponge or soft cloth whilst the leather is slightly damp will restore the nap. Light soiling may be removed with specialist cleaning products, a rubber block or pumice stone. All garments should be dried naturally, away from direct heat and stored on a well shaped hanger. Cleaning Cleaning leather clothing is complex and often requires specialist attention. Initial inspection and discussion between the cleaner and the customer is essential. Potential problems after cleaning include shrinkage and changes in colour and appearance due to previously undetected faults in the leather. Natural defects such as scars, vein marks and wrinkles may become more apparent after cleaning and correctly selecting the appropriate cleaning solution is vital. Oils lost during cleaning may need to be replaced. Adhesives used in manufacturing the item may dissolve or soften and also need replacing after cleaning. Testing Laboratory testing of any leather prior to production is essential. The main physical tests are tear strength, flex crack resistance of the finish (in normal and cold conditions), and dimensional stability to dry cleaning. Depending on the finish, the colourfastness tests required are resistance to rubbing, light, water, perspiration, water spotting and dry cleaning. Innocuousness tests for chromium VI, pentachlorophenol (PCP) and banned aromatic amines from some azo dyes should also be carried out. Finally, SATRA can carry out permeability and breathability tests on materials or articles to help develop comfortable leather garments.

Global Scenario: The global import of leather garments declined from US$ 3840.91 million in 2005 to US$ 3367.21 million in 2009. Indias share has increased from 8.68% to 12.73% during the said period. A Statement showing global import of leather Garments, Indias export and share during 2005-09 (Value in Million US$) 2005 Leather Garments WORLD IMPORT INDIA'S EXPORT 3840.91 3779.08 3986.18 4142.79 3367.21 333.30 309.91 345.34 426.17 428.62 2006 2007 2008 2009

% SHARE OF INDIA 8.68% 8.20% 8.66% 10.29% 12.73% Source: ITC, Geneva Major Exporting countries of Leather Garments 6 years (Value in Million US$) Countries China Italy Pakistan Germany Turkey USA France 2004 2005 2006 2007 2008 2009

2313.77 2289.77 1659.85 1307.77 1008.22 792.75 421.92 418.50 481.25 598.63 637.79 465.45 314.32 419.76 436.46 451.27 475.27 350.78 206.86 222.42 237.47 271.29 309.11 259.75 234.21 204.37 208.88 232.39 256.11 192.95 111.06 175.43 165.97 226.90 216.36 170.38 131.50 125.56 139.13 156.62 179.62 162.54

Hong Kong 215.21 207.41 178.17 185.14 175.85 151.87 Spain 70.32 73.52 66.72 88.25 114.20 122.94

Netherlands 48.31 Denmark 32.47

52.11 45.03 68.29 63.90 45.51

56.91 57.34 70.56 61.88 51.39

73.03 70.41 72.84 64.24 53.68

85.94 82.06 79.08 67.15 58.35

78.04 52.78 63.85 57.78 53.64

Switzerland 62.65 Belgium UK 57.68 50.50

Source: ITC, Geneva Major Importing countries of Leather Garments 6 years (Value in Million US$) Countries USA Germany France Italy Spain UK Japan 2004 2005 2006 2007 2008 2009

1250.38 1081.70 983.34 853.04 641.87 437.24 443.47 420.94 415.97 469.61 523.19 449.97 242.00 260.91 271.30 285.68 361.49 326.33 228.97 213.92 239.18 271.84 293.31 230.49 215.76 216.47 201.88 225.25 238.11 205.87 212.97 207.92 199.27 226.95 224.20 184.60 173.13 170.99 171.27 185.27 177.75 166.32 96.73 115.74 143.32 159.09 132.57

Netherlands 91.74

Switzerland 105.38 105.51 108.55 124.69 141.79 118.58 Hong Kong 165.29 155.44 131.61 143.27 140.55 113.61 Belgium Canada Turkey Austria 106.16 111.50 108.10 114.06 128.72 119.42 105.36 104.23 111.43 111.38 105.63 79.24 17.11 76.72 23.32 76.83 41.60 49.19 95.16 114.72 74.48 87.69 91.25 84.80

Denmark Russia Greece Sweden Poland Portugal China

42.02 31.56 86.56 41.38 10.71 37.62 13.18

54.93 19.49 65.09 42.43 13.16 35.74 14.80

72.49 70.53 89.64 60.86 31.99 58.00 76.15 63.40 59.73 57.27 51.89 40.81 41.63 44.85 45.29 33.34 20.67 31.36 43.88 32.62 29.30 36.56 36.30 32.35 18.26 31.04 46.31 42.39

Source: ITC, Geneva

Indian Scenario: Leather garments form a significant segment of the Leather Industry in India. Leather garments production capacity is estimated to be 16 million pieces annually. India produces different types of leather garments i.e., jackets, long coats, waist coats/shirts, pant/shorts, motorbike jackets, industrial leather garments, leather aprons etc. India is the second largest producer of leather garments, next only to China, which produces 70 million pieces of the total global trade volume of about 120 million pieces. It is a matter of great pride that Indian leather garments have been making giant strides in the world of fashion. National Institute of Fashion Technology and National Institute of Design lends design support to make continuous fashion statements. These Institutes provides well trained personnel and imaginative designers. Indias acknowledged strength is leather tanning and its ability to produce a wide variety of fashion leathers. Indias export of Leather Garments increased from US$ 309.91 mn in 2006-07 to US$ 400.83 million in 2010-11, growing at a CAGR of 6.64%. Indias export of leather garments accounts for a share of 10.43% in Indias total leather trade of US$ 3844.86 million in 2010-11. Indias position as the third largest global supplier of leather garments is only going to strengthen given the availability of quality raw material coupled with skilled craftsmanship.

Indias Export of Leather Garments Major markets 5 years Major markets for Indian Leather Garments are Germany with a share of 25.75%, USA 5.34%, UK 5.29%, Italy 14.12%, France 13.89%, Spain 10.96%, Netherlands 4.07%, Denmark 4.63%, Canada 1.59%, Belgium 2.04%, UAE 1.04% (Value in Million US$) Countries Germany USA UK Italy France Spain 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 55.67 45.12 21.41 47.36 22.79 60.21 53.41 36.72 22.51 52.63 23.43 42.95 10.83 1.18 11.34 8.51 2.74 7.04 2.40 5.16 3.32 1.91 69.40 27.76 23.23 58.64 27.10 47.69 11.25 1.91 12.35 8.94 2.41 8.62 2.55 5.13 3.93 5.33 100.26 22.20 27.92 70.13 42.28 48.47 15.72 3.60 23.86 7.86 3.92 7.96 4.30 7.45 4.19 4.13 109.18 17.04 25.07 64.96 55.53 51.08 16.87 5.64 19.74 8.64 4.08 6.46 4.63 8.46 3.64 4.33 103.21 21.39 21.20 56.60 55.67 43.91 16.30 4.48 18.57 6.38 3.29 6.34 3.68 8.18 2.55 4.15

Netherlands 8.95 Australia Denmark Canada 1.37 10.15 10.06

Switzerland 3.18 Sweden Austria Belgium Portugal UAE 5.74 2.45 6.06 5.91 1.03

Source: DGCI& S Major brands like Pierre Cardin, Tommy Hilfiger, Versace, DKNY, Hugo boss, Liz Claiborne, Ann Taylor, Nautica, Kenneth Cole, Charter Club, Daniel Hector source Leather Garments from India. With modern technology with state-of-the-art

machinery installed in the production units, India is come to be recognized as a major producer of quality leather garments in the globe. Leather Garments industrys accelerated development and growth is being aided by the capacity expansion and modernization efforts of the private industry and the Government of Indias encouraging policy measures. Components Required in Leather Garments: 1: leather. 2: Lining. 3: Fusings & Interlings. 4: Trimmings : Buttons , Zippers , etc. 5: Threads. 6: Labels. 7: Ribs. Support Material Required For Leather Garments: 1: Interlinings: Fusible. 2: Linings. 3: Adhesives. 4: Shoulder Pads. 5: Sleeves Header. 6: Tapes. 7: Collar Stays. 8: Closures: Zippers , Buttons and Button Holes , Snap and hooks , elastics , Hook and Loop tape. 9: Trims: Bindings , Edgings ,Pipings , Laces ,Flat Trims , Prints , Knit Trims and Labels.

Promising EU export markets for leather clothings. Overview The market for leather clothing in the EU is large and has contracted since 2008 due to the recession, especially in the southern and central EU countries. However, in the large EU markets and some of the eastern EU markets, in the last two years. there has been an upward trend. At the fashionable end of the market, affluent people continued to spend on leather jackets, but also on other leather clothing items - with lifetimes shortened to 2-3 years. The interest in these items (leggings, trousers and dresses) was driven by the idea of leather being a natural product, which does not need too much care. Nowadays, the idea of wearing leather has become more widely accepted. In Germany, France and UK, sales picked up in 2010 thanks to the continued shift from formal wear to casual and leisurewear, with more rustic and smart casual and sporty designs in leather clothing. Jackets are most common and take up the largest part (80%) of the leather clothing market. Nowadays leather is highly fashionable and many well-known designers include leather in their collections on the catwalks in Milan, Paris, London or Copenhagen. The EU leather clothing market valued 47 billion in 2010; this represented approximately 22% of total EU clothing sales ( 208 billion). Despite the recent EU contraction, (0.8% since 2006), global demand for leather clothing continues to outpace global production. To put the EU demand in context, just over 2.1 billion of leather clothing were manufactured in the EU in 2010. Much EU production was exported, the majority of which was destined for other EU countries and increasingly to the so-called BRIC countries (Brazil,Russia, India and China). The market has become very competitive, particularly in these uncertain economic times. Fast fashion retailers continue to provide new ranges in lower quality leather and products in faux leather or man-made material (leggings, jeans trousers). This has resulted in a downward pressure on prices. Opportunities still exist in many places, particularly specific product or market niches, countries where (older) affluent consumers or younger consumers continue to spend much on leather clothing, countries where local producers are under threat from imports, and other countries with currently low levels of developing country imports. The declining position of EU production that is likely to decrease further in most EU countries, results in increasing demand for imported leather clothing. Especially now that imports from the larger supplying countries China and Turkey decreased since 2009. Opportunities and threats - consumption

The retail and general consumer environment presents a number of opportunities for DC exporters. However, it will be of a growing importance to offer originality and craftsmanship to differentiate from the fast-fashion clothing being available now in almost all EU markets. + Economic activity and per capita consumption. Besides the basic needs for clothing and the weather conditions, leather clothing consumption varies per EU country. It depends on the consumer target group, interest in fashion, importance of being well dressed and the available budget for clothing. In this respect, Italy ( 143 per capita), Austria ( 153), France ( 139), Denmark (132) and most of the other Scandinavian countries would be of interest to DC exporters. In addition, Italy, France, UK and Denmark play an opinion-leading role in new fashion trends. Whereas Spain, the Netherlands, Belgium have a high proportion of young and middle aged people who spend much on leather clothing and who are more receptive to new designs. For this reason alone, these countries should be also interesting to DC exporters. + Large markets. Germany ( 8.8 billion) and Italy ( 8.6 billion) had in 2010 the largest expenditures on leather clothing. However, as table 2 indicates, the consumption in France, UK, and Spain were also important, particularly for womens leather clothing.These top five countries account for 78% of the entire EU market for leather clothing by value. Therefore, you could add these countries on an export prospect list. + Growth markets. Between 2006 and 2010, total EU demand for leather clothing (by value) decreased by an average annual rate of 0.8% (see Table 2). Although leading markets such as Germany, UK, France and the Netherlands, have grown over the period as a result from the shift toward more casual wear. Leather clothing collections were available to a wider audience featuring more differences in styles from basic/rustic to elegant/chic. Growth has been also strong in Austria, Poland, Scandinavian countries, Czech Republic, Slovakia, Romania, Bulgaria, Slovenia and the Baltic States. On the other hand, there are still some markets that contracted throughout the review period, particularly the Italy (-1.1%), Spain (-1.9%) and Greece (-1.9%) being seriously affected by the recession with a growing proportion of consumers who were cutting back their spending. For similar reasons, demand in Belgium, Ireland, Portugal and Hungary fell in 2010 as they were severely hit by the financial crisis. + Overall market growth will resume. The EU will continue to be a challenging market for leather clothing even if consumer spending on clothing is expected to be restrained in 2011. However, interest in fashionable leather clothing remains strong.

In most of the western and northern EU countries, the population is aging and it is expected that middle-aged people and older people want to look younger and fashionable, without keeping up with fast changing trends. They will prefer items that could be of leather, which are of a better quality and can be worn longer. Contrary to the fast fashion, more consumers tend to look now for more quality in clothing, which could be in terms of: material, fit, design, style, finishing, environment, durability and integrity in production. This diversity in tastes and criteria offers good opportunities for DC exporters. There are good prospects for leather clothing in eastern EU countries. There is anemerging middle class and a growing number of (Russian) tourists. Slovakia in particular,the Czech Republic, Slovenia and Poland offer greater scope for market growth as incomes and spending patterns are slowly catching up with the other EU countries. There are also opportunities for niche markets such as the plus-size segment for women, ethnic fashion and in new varieties in smart-casual clothing. More information can be found in the module Trends and Segments. ith the correct market approach, DC exporters could benefit from this opportunity. Opportunities and threats - production EU production of clothing decreased between 2006 and 2010 (-6.1%) and more production is outsourced to lower cost countries. However, production is likely to be higher than that indicated in Table 2, as Eurostat figures do not always include production figures for smaller artisan companies, and these make up a large proportion of EU output. + Declining producer markets. There are a number of EU countries that will provide good opportunities for exporters based on weak or declining domestic production industries. Germany and France in particular have lost a lot of their traditional production to outsourcing. In other large producing countries such as Spain (-4.4%), Poland (-12.2%) and Portugal (-26.1%), the recession and the slump in exports, competition from Asia and the stricter environmental regulations (tanning, dying, production) hit the leather industry hard. This had led to a further closing down of factories and unemployment. +/- Leading producers. Italy ( 1.3 billion) is the leading producer of leather clothing in the EU. The Italian industry has nevertheless decreased by less (-1.2%) than the EU average (-6.1%), while France ( 272 million, -3.8%) and the other leading producers UK and Spain, also have decreased at a rate well below the EU average - see Table 2. There will be numerous opportunities to be found by identifying those producers vulnerable to market conditions that may wish to form partnerships with DC producers.

+/- Other growing producers. Forecasts for domestic leather clothing production in the EU remained depressed. There will be a growing penetration rate of Asian imports.The concentration is expected to intensify in order to stay competitive. More mergers and take-overs will result in a further decrease in the number of suppliers. There are few countries, however, that have registered an increase in production. The notable exceptions are Austria and Ireland. This might be an opportunity for market entry. In addition, the clothing industry in the large EU countries is now more optimistic with new export opportunities in emerging markets. They might be interested in new outsourcing suppliers, which implies challenges to DC exporters. Opportunities and threats - trade flows EU imports of leather clothing was valued at 14.9 billion, an average annual decrease of -0.8% from 15.4 billion in 2006. Imports of leather clothing to the EU are decreasing at a similar rate as the market demand, while EU production is declining. This suggests that importers are achieving greater success in EU markets than domestic producers. Between 2006 and 2010, EU imports from DCs fell by an average annual rate of -1.5% (from 9,632 to 9,052 million) and by -8.8% in volume (from 33,263 to 23,025 tonnes). This was largely attributed to falling supplies from China and Turkey . See also later on in this section. + EU countries with above average DC supplies. Germany, Italy, Spain and theNetherlands, have an above average share (61%) of supplies from developing countries. In terms of value, German imports ( 2.7 billion) represented 30% of all DC exports ( 9.1 billion) to the EU. The sheer size of this market for DC exporters means it cannot be ignored. The other large EU countries, France, Belgium Denmark and Sweden were also important markets for this reason. -Countries with below average DC supplies. The notable country in this respect, which offers few opportunities to DC exporters, is France. France is the second largest EU importer ( 2.6 billion), but a below average importer from developing countries ( 1.3 billion, 52%). Other countries with particularly low levels of imports from DCs are Poland (21%), Portugal (17%), Austria (14%), Finland (27%), Greece (32%), Ireland (19%) and many of the eastern EU countries. However, Austria and Slovakia are growing clothing importers, so it would be a challenge for DC exporters to find opportunities here. +/- New Member State importers are below average. There is a mixed picture from the new Member States. In all cases, they have a low DC share of imports (Czech Republic and Lithuania have the highest). Apart from Poland (232 million), Czech Republic ( 155 million) and Slovakia ( 84 million), DC supplies are quite low in absolute terms. However, it is likely that DC imports will increase to these countries in the future, as they become further assimilated into the EU.

Supplies from developing countries were on the rise More than half (61%) of EU imports came from developing countries and supplies were led by India ( 3.4 billion/7,142 tonnes in 2010), as is shown in table Total Imports India 3368 China 2021 Pakistan 1839 Turkey 1206 Ukraine 121 Vietnam 93 Morocco 76 Sri lanka 72 Mauritius 69 Source: Eurostat 2011 Import Share 23% 14% 12% 8% 0.8% 0.6% 0.5% 0.5% 0.3% Change0910 7.6% -7.4% 10.5% -8.2% 10.3% 29.2% 8.2% 67.4% 137.9% Volume in tons 7142 6693 6422 1378 352 336 137 125 62 Leather type

It is interesting to note that India has overtaken China since 2009. India could benefit from the devaluation of the Rupee and there is much availability in good quality leather. This also applies to Pakistan with a better organised leather industry. There were clear signs that China has become less popular as a supplier. The labour cost in China increased as a result of a higher living standard. Freight costs increased as well. Another important reason is the devaluation of the Euro against the dollar. As the Chinese yuan is pegged to the dollar, its rise has led EU buyers to source elsewhere, for example closer to home. Another reason to source more from nearby (developing) countries is that more consumers want fashionable and quality leather clothing for the lowest price. So, for buyers it would be less risky to purchase smaller quantities on a regular basis. Even if this implies competition from eastern EU countries, there is still an opportunity for developing countries to supply,as many are still lower in price than the Mediterranean countries. In addition, the declining position of EU production has meant a rising demand for imported clothing from new developing countries The market for leather garments in the EU 1 Types of products

In official trade and production statistics, only one number is available for leather garments. Therefore no distinction can be made between the actual types of products, whether they are for men or women, which kind of leather was used etc.In general, it can be said that market information about leather garments is difficult to obtain. Leather garments cover mainly different kinds of leather jackets and coats. This category is estimated to take up 85% of the EU market under study. The remainder consists primarily of trousers, leggings, skirts, dresses, body warmers, waistcoats, underwear and bikinis, which at present are in fashion. However, this is a

wave motion. Items such as hats, gloves, belts and similar articles are not discussed. Information on some of these items may be obtained from the CBI and ITC reports on "Leather goods". If possible, a distinction will be made in the surveys between leather jackets and/or coats and other leather garments. Besides by type of product, the market for leather garments can be divided into combinations of the following criteria: Variety of origin (sheep/lamb, goat/kid. pig/piglet, cow/calf etc.); Finishing techniques - variety of finish (suede, split, shammy or chamois, nappa, nubuck etc.) Quality/price ratio - low, medium (sometimes classified into lower and higher medium) and high; Fashion - based on materials, style and colour; a difference can be made in classic fashion, casual fashion and highly individualistic fashion; End users - women's and men's wear and (to a much lesser degree) childrens wear; Functional aspects - some categories of consumers prefer functional aspects above fashion,aspects in leisure and/or profession, like for motorcycle driving (protective aspects) and for sexual activities (gay- and SM-scene). Leather used The material - type of leather - used determines for a large part the price category in which the article will be sold. In general, the term hides is used for the whole pelt from large animals (cattle, horse, etc.), in contrast to the term skin, the pelt of young (like calf and lamb) or small (like goat and sheep) animals. Cattle hide, general term for hides before tanning from a bovine of any breed or sex, usually mature, includes bull hide, steer hide, cowhide, and sometimes kip skin. Lamb and sheepskin (with or without wool), cowhides, calfskins, goatskins and pigskins are all used for leather garment production and all have their own characteristics. Finishing techniques Suede: leathers which are finished by buffing the flesh side (opposite to grain side) to produce a nap. The term refers to the napping process, and is unrelated to the type of skin used. Split: the underneath layer of side leather which has been split off. Devoid of a natural grain, it may be either sueded or pigment finished and embossed. The top layer of the hide, which contains the markings known as grain are called full grain

leather. When the hide is split into three layers, the middle and the bottom layer are known as split leather. Chamois: the product of oil-tanning the underneath layer (called a flesher) which has been split from a sheepskin. The chamois tanning method employs train oil, most often cod liver oil. The process is extremely labour intensive, and this is what makes chamois leather so expensive in comparison with chrome-tanned leather. Nappa: commonly used as a synonym for grain leather, or any smooth garment leather. Technically the term refers to sheepskin tanned in such a way that the underside of the hide has the appearance of grain leather rather than suede. Nubuck: a brushed grain-sueded leather; grain-sueded is a buffing process to raise the fibres on the grain side of a hide or skin to produce a velvet-like effect, known as nubuck leather. Different finishing techniques can give nubuck leather a dry, oil or wax appearance. Quality/price ratio The quality of leather depends primarily on the selection of skins and secondly on the production, such as the method of tanning and finishing. The better the quality of a hide of skin, the less it has to be treated. The number and severity of defects in the surface of the hide or skin determine quality. The fewer holes, abrasions and stains, the higher the grade. Grade is not an indication of how wearable the leather is, but is based upon the skins visual appeal and the percentage of the skin or hide which can be used. Higher grades have more usable area. Leather is a natural product and some imperfection will always be present. There are definite differences in quality between hides and skins from different countries.Buffalo, goat and pig leather are, because of price and quality, mainly sold in the lower price category, which is the higher volume market. The major categories of leather in the EU market are: Steer, cow or calf leather: garment cow, plong, calfskin, suede, nappa and nubuck cover several segments. Thinner and supple plong is a top grain cow leather with wonderful drape and covers the high segments. Cow or calf is relatively inexpensive and is strong and durable. The larger size of the hide means less piecing of a pattern and less waste. A thickness of 0.8-1.2 mm (which can be compared with 2- to 3- ounce weights in the USA, where leather thickness is expressed as the weight in ounces per square foot) is often used for jackets, coats and pants. Nappa covers the lower and nubuck the higher part of the mid segment. Pig and hog: primarily suede, it is the least expensive of the garment leathers. It is available in many grades, colours and weights. Pig suede up to 0.6 mm in thickness (1.5 ounces in weight), is suitable for shirts, pants, skirts, jackets and vests.

Sheep and lamb: nappa leather, suede, chamois, shearling and mouton. Lambskin, or nappa lamb, is especially soft and is suitable for jackets, coats, pants, skirts and dresses. Lamb suede has a good draping quality; it feels like silk and is used for blouses, pants and skirts. Chamois is sometimes used for garments and is quite stretchy. Shearling and mouton are tanned with the wool intact. Lamb is more expensive than cow and is available in thickness of 0.8 mm or less (2 ounces or less in weight). Goat and kid: primarily soft leathers. Goatskin is soft but very strong. It is moderately priced and available in 0.8 mm thickness. Its beautiful grain and soft feel make it an excellent choice for jackets. As quality demands are high, clothing exporters and manufacturers of leather garments should take the following into consideration in their production procedures: as leather garments are relatively expensive products, the processed leather must satisfy high standards of craftsmanship. After tanning the leather, it is recommended to soften it in a softening machine; the cutting section: in general it is recommended to use knives rather than scissors for cutting, to use glass or polypropylene (instead of tin or zinc) as the basis for cutting with templates, to have good light above the cutting table, in order to achieve optimum leather selection and to set up the (large) cutting table at an angle of 30 degrees; industrial machines should be employed, with upper and lower transport and double seam capabilities, to ensure straight and parallel stitching; puckering should be avoided; reinforcement should be added in pockets; supple tape is preferred to glue, which becomes hard when dry; seams have to be hammered down and a thickness of 4 to 6 layers of leather should be avoided; the interlining should be in a quality standard equal to the whole garment; the labelling: a well designed and good quality label is important; accessories like buttons, zippers, buckles etc. should be of good quality in the right (uniform) colours and clean (no rust or other impurities); product information concerning the sort of leather used and maintenance of the garment should be stated on a well-designed and clear quality card; the packaging should be such as to prevent damage during transport.

Customs/statistical product classification The classification system used for both Customs and statistical purposes in EU member countries is the Harmonised Commodity Description and Coding System (HS). In general the number clearly identifies a specific product and it is possible to see whether the garments concerned are for men or women and how they are made. Unfortunately, only one number is available for leather garments. Therefore no distinction can be made between the actual types of products and whether they are for men or women.

CONCLUSION
Leather and Leather Products sector is one of the important sectors among the various constituents of the manufacturing sector in India, mainly due to its contribution towards employment. It is one of the unique sectors which have the advantage of the both value addition and export potential. It also contributes significantly to total manufacturing output and exports from the country. Leather garments exports from India have been decreasing at the annual rate of 2.46% during 1995-96 to 2007-08. Germany is the leading importer of leather garments during 2007-08. The share of Belgium and Canada has increased over the years. Leather garments exports to Germany, Italy, USA, France, UK and Netherlands declined over the years. The livestock is the raw material for the leather industry. Cattle, buffaloes, goat and sheep are the four live stock species which provide the basic raw materials for the leather industry. India ranks first among major livestock holding countries in the world. In fact, India has the capacity to fulfill 10% of the global leather requirement. The annual availability of 218 million good quality pieces of hides and skins is the main strength of the industry. Along with rich endowment of raw materials, the industry has access to abundant supply of cheap labour. Over the years through government support the industry has been able to develop its R & D facilities considerably. Though there is much to be done in order to meet the challenges of globalization, the industry has established a sound base for the same.