Saurabh Gupta | 25 May, 2009
Productivity is one of the major challenges that the leather industry is facing nowadays, said Habib Hussain, Chairman of Council for Leather Exports, in an exclusive interview to SME Times.

Excerpts of the interview...

What according to you is the biggest challenge that the leather industry is facing nowadays?
Habib Hussain: I think the challenge that any industry is facing is global recession. And hopefully we should see at the end of that and not to confront the same situation in future. After that, productivity is a challenge before the leather industry in general and the small companies who have grown big in particular. As Mr. Mukhtaul Amin was mentioning in his speech that the difference between the largest Chinese shoe company and the largest Indian shoe company is quite substance. I think one of the reason for this is productivity.

We have to make sure that the leather component industry grows substantially but currently they need a lot of help and handholding to register this growth. So these are the challenges that I think the industry is facing right now.

What is the council doing to meet these challenges?
Habib Hussain: We are continuously informing the government about the hurdles we are facing and along with this we are also organizing the business2business (B2B) fairs for promotion of the leather and the component industry. These fairs are like a platforms for all domestic and global business players of the industry to meet and to get trade deals. These B2B fairs are not only giving them trade deals but also making them aware about the new technologies.

Do you see lack of technology up-gradation as a challenge for the leather industry?
Habib Hussain: I think technology-wise we are well served. I think everything is global now and I don't see any challenge technology-wise. India is up there not only in technology but also creativity wise. Technology partnerships with major merchandising houses in USA and market leaders in Europe are advantages in the integrated developmental plan of India. Investment backed technology support for footwear component industry is being sought to be outsourced.

What would you like to say to the small manufacturers of leather goods?
Habib Hussain: That is mainly for the domestic market that doesn't apply for the export market at all. My mandate is for the export market but as a general question I think there always will be a market for small scale industries and also for the cottage industry. But otherwise over the years as happened elsewhere in the world you are going to see consolidation.

The leather footwear industry has shown a remarkable growth last year. How do you see the growth in leather footwear exports this year?
Habib Hussain: In spite of slowdown in the West, this year we also going to see about a 5 percent increase in leather footwear exports over last year. But the increase would have been much higher in the first-half. We had an increase of about 23 percent in the first-half that came down by 18 percent in the second-half. We hope that the trend will be revised in the coming year. Currently it accounts for an export value of US$1212 million, holding a major share of 41% in India's total leather trade. Considering this fact, we have set an ambitious target of US$ 4.5 billion in respect of footwear export from India by 2010-11 where the overall export of leather products will reach US$6.98 billion, wherein footwear alone will account for a share of 65% in India's total leather export trade.

How do you see FY-10 vis-a-vis leather exports?
Habib Hussain: I am very very optimistic about the industry. I think India has a huge potential for growth in this industry and we think that will achieve more. Future growth of the footwear industry in India will continue to be market driven and oriented towards the European and the US markets.

What are you expecting from the new government?
Habib Hussain: I must say that the new government is required to understand the problems of small businessmen, including availability of liquidity at reasonable interest rates. Along with this, the leather goods manufacturers are facing the problem of high input cost, which leads to increase in the prices of final goods. So...we are getting ready with revised long term plan, which we hope to present to the government some time in July to August before the new government.