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Article Published In Vol.4 (Nov-Dec-2016)

Current Trends and Identification of Critical Factors that are Hindrance in the Progress of Leather Industry in Pakistan

Author : Muhammad Sultan Bhatti, Muhammad Usman Sheikh, Danyal Asgher, Nazia Mansha and Fareeha Zafar

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Pakistan is losing its share in international market as compare to regional countries in leather sector due to high cost of production. It is declining from 1.2 Billion dollar to 900 Million. But still it is showing some positivity as because the 900 Million earned in 9 months. (Rana, 2016) Chairman Gulzar Firoz mentioned that the export of leather jackets declined by 19%, gloves by 16.5%, footwear by 31% during the first five months of 2015-16 and leather industry contributes 2.6% to GDP and only 5% to country’s total exports and providing jobs over one million skilled and semi-skilled workers. Pakistan’s share is 0.5% in world market for leather and leather products in inconsequential as compared to China’s 19%, Italy 9%, Vietnam 4% and India 2.5%. Furthermore, a decline of 20.5% has been observed in the recent export figures. Gulzar Feroz said “The industry imports raw skin and leather, it has to pay 3% custom duty, in the past duty was at 1% then increased to 2%”. The country produces best quality of raw material (raw skin and leather) of cow, buffalo, goat and sheep, but stocks, were not increasing due to very slow or stagnant growth in livestock. Currently, tanners are operating under-capacity and had to imports raw material. Pakistan imports raw material and related products from the developing countries and exports value added products to developed countries like USA and Germany. (Rafiq, 2015) Raw leather is imported from Saudi Arabia, China, Kenya, Sudan and Tanzania. To meet the need of 2.5% of their total demand. Whereas, it is highly recommended that the import duty on leather raw-material must be exempted, once the raw-material has been value added and exported again. Made in Pakistan ‘label’, Supply of Gas, diversification in leather portfolio, trainings to have well trained labor should be provided timely, fully equipped laboratories; the availability of flaying machines possibilities must be covered up and identification of potential markets and the role of Government in the war against terror are the few highlighted recommendations.

Keywords: Leather, Raw Material, Leather Products, Hides and Skin

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