Positive trends for Made in Italy leather

Italy’s tanning industry

shows signs of blossoming…

2006 was a recovery year which hauled along most of Italy’s tanning production areas – A promising start to 2007

The upward trend which began last year for the Italian tanning sector was confirmed by year-end 2006 financial figures: in fact, industry ratings for the leather sector, although not definitive over twelve months, illustrated a positive trend both in terms of quantities and revenues, confirming a favorable moment for Made in Italy in international markets. The start of 2007 has been generally satisfying. In Tuscany, chrome and vegetable tanned leathers held their own, with encouraging signs for footwear sole leather. In the region of Veneto, early figures show mixed results, while in Campania various delays in starting up production were recorded. And in Lombardy, sales of kidskin for shoemaking have been halted somewhat, with leather for the apparel sector remaining stable. More ascertained data is available, instead, for the first quarter of 2006. An analysis of this data shows that oscillations in economic figures depend on a variety of factors such as the type of leather, its usage and manufacturing destination, and geographical areas. In raw materials, bovine hides registered an overall growth, with increases of 4.7%; a similar trend was recorded for veal skins (up 3%); and the situation remained essentially stable for sheep and kid skins, which faced up to a slackened demand. Looking to finished hides, Italian production figures show an upward trend, with average growth at + 2.3% for the 2006 quarter over the same period for 2005: production in the mid and mid-high brackets is up, while the mid-low range remained stable. Figures relative to 2005 underscore a production of 4.86 billion euros, with total quantities amounting to 162,539 square meters of leather, and 40,587 tons of sole leather; export figures reached 3.21 billion euros. Demand from the Far East has spurred sales, along with a satisfying recovery in demand from European countries and North America, while Eastern Europe showed a slight decline. Various factors have contributed towards consolidating this improvement in Italy’s tanning production, in spite of certain “disturbing” elements which continue to persist with respect to the growth trend’s stability. Of course, at the base of all this is the capacity of entrepreneurs in various production areas of Italy to react, regenerating and reconverting their production specifications, while adapting them to the new needs of the global market and interpreting its new dynamics.

First and foremost is quality. Following the disorientation generated by competition from emerging economic countries, Asian in particular, in the average tanning segment, over the past year Italian tanners have become more acutely aware of their capabilities, strictly related to the qualitative content of their processed leather. Superior quality is, in fact, the added value which has allowed Italy’s products to remain at a higher level. Quality which can be perceived constantly at every stage within the industry, right down to the end consumer: from chemical products to interventions aimed at protecting and preserving the territory and the environment; research in design and creativity, spearheading new trends, colors, treatments and finishings, and technical processing aspects; with specific consulting to customers, demonstrating availability and competence in responding quickly to their client base. These distinctive factors have begun to be appreciated by emerging markets, which consider Italian leather not simply as a product to be reproduced and copied in their factories, but instead as valid towards the realization of their manufactured goods for sophisticated consumers whose tastes in fashion are evolving continuously. Although this scenario might appear quite favorable, this is certainly not the time to rest on one’s laurels. For Italian tanners, several problem issues tied to raw materials and the euro/dollar exchange rate still remain. Tracking down good quality raw materials has become a difficult task, considering the Italian tanning sector’s dependency on foreign supplies for over 90% of its production; and what’s more, markets producing raw hides and skins are increasingly tending to hold on to their product in order to export it with already as semi-finished and finished leather. Not to mention the high prices raw hides are fetching of late, which is generally the case after a downturn, with the recovery sending prices upwards; and of course, the euro/dollar exchange rate, whose see-sawing trends create turbulences which condition both price listings and export flows.

Maristella Pastura