industry analysis report indian leather industry

LEATHER PRODUCT INDUSTRY

INDUSTRY PROFILE

INTRODUCTION

India accounts for approximately two percent of the world trade in leather and

leather products. To be on the fast track of growth and to have a larger cake in the

international business, continuous technology up gradation and modernization are the

most powerful driving forces like in any other manufacturing sector that dreams steady

growth and expansion. With this being the primary objective, India's Council for Leather

Exports (CLE) has taken a number of initiatives. To propel the combined efforts of the

tanning and manufacturing sectors, the Central Leather Research Institute (CLRI), the

Fashion Technology and Development Institute and CLE as the main cog in the wheel, an

action plan has been chalked out. The growing international demand apart, the action

plan also suggested measures to face Indian leather's industry's major competitors in

Asia: China, Indonesia, Korea and Taiwan.

To boost the country's leather industry, the Indian federal government has

earmarked a Rs 4.5 billion (US$ 95 mn) grant to be made available to the industry over a

span of five years but that's not without any string. The fund availability is conditional

upon the sector's attracting an annual investment of Rs 2.2 trillion. In 2002, investments

in the leather sector stood at Rs 410 million. Footwear and their components account for

about 25 percent of India's total leather products exports. These two markets also offer

Indian leather industry vast scope for exports of saddler and harness.

Besides the European market where Indian leather products already enjoy a strong

presence, the US too is emerging as a very strong and promising export destination for

Indian leather industry. US today accounts about 25 percent of a massive US$ 96 billion

global trade in leather and leather products. The importance of European market could be

gauged by the fact three major EU countries-Germany, Italy and UK- today accounts for

approximately 42-45 percent of leather and leather products exports from India. These

three countries together exported leather products worth US$ 814.82 mn in 2001-02

against country's total leather and leather products exports valued at US$ 1.93 bn. CLE is

APGMS, Rajampet. 1


trying to make a dent in new markets. Focus countries include the Latin American

countries, Israel and Japan. Japan is the fifth largest importer of leather & leather

products in the world. Japan now imports over US$15 million worth leather and leather

products from India. In fact, between 1998-99 and 2001-02, India's exports leather

products to Japan have more than doubled. According to the latest available provisional

data, exports in the first 10 months in fiscal 2002-03 to Japan stood at US$ 7.53 mn

against US$ 7.30 mn during the comparable period of 2001-02. CLE aims at raising

India's share in Japan's total imports of leather and leather products to 2 percent by 2005-

06 from the current level of 0.5 percent which in other words means forex earnings to the

tune of US$ 70 mn in next three years from the 2001-02 level of over US$ 15 mn.

Italy is yet another favored export destination for Indian leather industry. Through

joint ventures with Indian companies, CLE has helped bring in Italian leather footwear

manufacturers to set up export production bases in India. In fiscal 2001-02 India exported

US$ 262.49 mn worth of leather and leather products against US$ 241.07 mn in 2000-01

to Italy. The global downturn however like other sectors had severely impacted leathers

exports by India. The first 10-month exports to Italy too showed a slow growth. Exports

during this period in fiscal 2002-03 stood at US$ 132.21 mn against US$ 151.90 mn

year-on-year basis. It is unlikely the year attained the US$ 2-billion-target set for fiscal

2002-03.

India is the second largest footwear producer in the world. It accounts for 20

percent of India's total export of leather and leather products. Major markets include the

UK, USA, Germany, Italy, France, Netherlands, Canada, Sweden and Russia. Of total

exports of footwear from India, around 64 percent goes to UK, USA and Germany.

India's new Export-Import policy for 2003-04 has among others gone in favour of

leather industry. CLE chairman S S Kumar maintains: "As far as leather & leather

products are concerned, the changes made in the EPCG Scheme in regard to criteria of

export obligation on the basis of duty saved, allowing import of 10 year old machinery,

and permitting import of spares for existing plant & machinery etc would make the

scheme more attractive and useful. Further, allowing the exporters to export any other

APGMS, Rajampet. 2


products in fulfillment of export obligation under the scheme is a major step forward and

would provide greater flexibility in a ailment of the scheme. The industry welcomes these

measures".

The lowering of value addition norms under the DFRC Scheme from 33% to

25%would benefit the exporters and the industry feels that extending the benefit of the

scheme to deem export is a right step encouraging the domestic suppliers of raw materials

and inputs to the exporters. CLE is of the view that the duty free import entitlement

benefit extended as a premium to the status holders achieving higher growth rate of more

than 25% in FOB value of export in free foreign exchange, will encourage the status

holders towards attainment of the incremental performance. "The status holders would

now be able to achieve competitive levels of production by such duty free entitlement",

Kumar maintains adding "allowing annual Advance licensing facility to the status holders

will enable such units to go for planned procurement of raw material and components

based on annual production programme".

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.

APGMS, Rajampet. 3


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 globalization of Indian economy

supported with liberalized 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:

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.

APGMS, Rajampet. 4


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.

Category 1998-99

Finished Leather 265.2

Leather Footwear 290.2

Footwear Components 243.7

Leather Garments 368.6

Leather Goods 429.0

Saddlery and Harness 33.4

Total 1630.1

APGMS, Rajampet. 5


(Value in million Rs.)

Country 1998-99 Share in total exports in

1998-99

Germany 15462 22.23 %

USA 10826 15.56 %

Italy 8317 11.96 %

UK 9744 14.00 %

France 3240 4.6 %

Spain 3103 4.46 %

Russia 1009 1.445 %

Portugal 1240 1.78 %

Australia 1465 2.10 %

Denmark 808 1.16 %

Netherlands 2127 3.06 %

Hong Kong 258 3.25 %

Others 9958 14.32 %

Total 69558 100 %

APGMS, Rajampet.

1993-94 1994-95 1995-96 1996-97 1997-98 1998-99

0

20000

40000

60000

80000

100000

120000

140000

81520.38

101143

117223.4

110343.2

61570.61

69557.8

Export of Leather and Leather Products from India

Rs. M

illion

6


Top ten Indian leather exporters

Tata International Ltd.

Florind Shoes Ltd.

Punihani International

Farida Shoes Ltd.

Mirza Tanners Ltd.

T. Abdul Wahid & Company

Hindustan Lever Ltd.

Super House Leather Ltd.

RSL Industries Ltd.

Presidency Kid Leather Ltd.

Indian Leather Footwear Industry

India is the world's second largest producer of footwear; its production estimated

over 700 million pairs per annum. At about US $ 300 million per year, footwear accounts

for 18 percent share of total exports of leather exports.

Various types of shoes produced and exported from India include dress shoes,

casuals, moccasins, sports shoes, horacchis, sandals, ballerinas, and booties. Major

production centres are Chennai (Madras), Delhi, Agra, Kanpur, Mumbai (Bombay),

Calcutta and Jalandhar.

Most of the modern footwear manufacturers in India are already supplying to well

established brands in Europe and USA. The large domestic market and the opportunity to

cater to world markets makes India an attractive destination for technology and

investments. Equally relevant is it for the footwear components industry, at this juncture,

it is posed for real growth and diversification.

APGMS, Rajampet. 7


Indian Leather Goods Industry

Items produced by this sector include, in addition to bags, handbags, handgloves

and industrial gloves, wallets, ruck sacks, folios, brief cases, travelware, belts, sports

goods, upholstery and saddlery goods.

The major market for Indian leather goods is Germany, with an offtake of about

25 per cent of the leather goods produced in India followed by USA, UK, France and

Italy. With products ranging from designer collections to personal leather accessories,

this sector has a share of 20.53 per cent in the leather industry, while maintaining an

average growth rate of 11 per cent recorded in the last five years.

Indian Saddlery Industry

India is one of the largest producers of saddlery and harness goods in the world.

The saddlery industry was established in the 19th century primarily to cater to the needs

of military and police. From then on initiatives were taken to develop, the industry and

today there are over 150 units in the organised sector, out of which approximately 105 are

100% export oriented units.

Kanpur, in the state of Uttar Pradesh, is a major production centre for saddlery

goods in India accounting for more than 95% of the total exports of saddlery items from

India. Kanpur, because of its specialisation in tanning and finishing of buffalo hides is the

only centre in the country where harness leather, which is major input for saddlery

industry, is manufactured.

The export of saddlery and harn'ess items have showed an annual growth rate of

about 40% reaching DM 64 million during 1998-99. The major importers of Indian

saddlery are Germany, USA, UK, France, Scandinavia, Netherlands, Japan, Australia and

New Zealand.

APGMS, Rajampet. 8


Indian Leather Garments Industry:

The Leather Garment Industry occupies a place of prominence in the Indian

leather sector. The product classification of leather garments comprise of jackets, long

coats, waist coats, shirts, pant/short, children garments, motorbike jackets, aprons and

industrial leather garments.

Indian leather garments, which entered the world market only in the mid-eighties

with exports of Rs. 15 crores in 1997-98, account for about Rs. 1530 crore in 1997-98.

The major export destination of leather garments from India is Germany. In 1997,

German imports of leather garments aggregated DM 1786 million of which DM 304

million worth of imports went from India. India, China and Turkey were the major

suppliers of leather garments for the German market, as they accounted for about 78% of

the market share.

Other markets for India include Italy, U.K., U.S.A. France, Spain and

Netherlands. Recently, successful attempt had been made for exports to Denmark,

Switzerland and Canada.

Indian leather industry - Investment & Sales

The ratio of investment : sales value is 1: 2.25, which is very low when

compared to other industries. This is mainly due to low capacity utilization of the units.

The capacity utilisation of units in respect of hides converting raw into unfinished

leathers is estimated at 49%, raw to finished 60% and unfinished to finished 70%.

In the case of skin based tanneries, the respective percentages are 64, 67 and 70.

The main reasons reported for under utilisation of capacity are raw material shortage,

high price of raw materials, lack of modernisation, financial constraints, power

constraints and stringent environmental regulations.

APGMS, Rajampet. 9


Marketing of leather and leather products in Germany & the EU

The leather sector offers a good potential which Indian entrepreneurs can exploit in

Germany and other EU markets characterised by ever growing competitiveness in terms

of price and quality, on one hand, and the environmental considerations, on the other.

With a strong foothold that the Indian leather industry has had for long in these markets,

and its advantage of raw material and labour resources, Indian leather exporters can, and

should, mount a concerted marketing campaign to wrest a share consistent with their

inherent strength and potential. This has to be done against the background of the well-

known salient features of the German market:

The world's second largest import and export market

A difficult buyers' market with hyper competition and high expectations

A dynamic multi-faceted market with rapid technological development and

innovations A market where a considerable amount of buying power is devoted to

satisfying individual needs

A market influenced by the rising average age of the population and low birth rate

A market where environment awareness and eco-friendly production becomes more

and more a pre-requisite for successful marketing of products

APGMS, Rajampet.

Leather Leather Footwear Footwear Component Leather Garments Leather Goods Saddlery and Harness

0

20

40

60

80

100

120

28.25

48.8656.03

109.5113.2

8.51

Export of leather and leather products to Germany (1998-99)

Milli

on U

S $

10


Recipe for market intelligence

Market information through journals and magazines

» Schuhmarkt

» Schuhkurier

» Lederwaren Report

Quick Market Assessment

» Window shopping

» Backward calculation of price

» Catalogues/ leaflets

Trade Fairs

» GDS – Dusseldorf » Herren Mode Woche - Munich

» Expo-Riva Schuh - Italy » Igedo Fashion Fair - Düsseldorf

» Leipzig Fashion Fair » SPOGA - Cologne

» Lederwarenmesse - Offenbach

The estimated employment in different sectors of leather industry is as follows:

Flaying, curing & Carcass Recovery:8,00,000

Tanning & Finishing:1,25,000

Full Shoe:1,75,000

Shoe Uppers:75,000

Chappals & Sandals:4,50,000

Leather Goods & Garments:1,50,000

Structure of the industry

APGMS, Rajampet. 11


The leather industry is spread in different segments, namely, tanning & finishing,

footwear & footwear components, leather garments, leather goods including saddlery &

harness, etc.

Footwear & Footwear Components

Shoes:100 million pairs

Leather shoe uppers:78 million pairs

Non-leather shoes/chappals etc:125 million pairs

Leather Garments:6 million pieces

Leather Products:70 million pieces

Industrial Gloves:40 million pairs

Saddlery: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, and 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 materialfortheleatherindustry.

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.

APGMS, Rajampet. 12


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

organized 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.

Top ten Indian leather exporters

Tata International Ltd.

Florind Shoes Ltd.

Punihani International

Farida Shoes Ltd.

Mirza Tanners Ltd.

T. Abdul Wahid & Company

Hindustan Lever Ltd.

Super House Leather Ltd.

RSL Industries Ltd.

Presidency Kid Leather Ltd.

Indian Leather Footwear Industry

APGMS, Rajampet. 13


India is the world's second largest producer of footwear; its production estimated

over 700 million pairs per annum. At about US $ 300 million per year, footwear accounts

for 18 percent share of total exports of leather exports.

Various types of shoes produced and exported from India include dress shoes,

casuals, moccasins, sports shoes, horacchis, sandals, ballerinas, and booties. Major

production centres are Chennai (Madras), Delhi, Agra, Kanpur, Mumbai (Bombay),

Calcutta and Jalandhar.

Most of the modern footwear manufacturers in India are already supplying to well

established brands in Europe and USA. The large domestic market and the opportunity to

cater to world markets makes India an attractive destination for technology and

investments. Equally relevant is it for the footwear components industry, at this juncture,

it is posed for real growth and diversification.

Indian Leather Goods Industry

Items produced by this sector include, in addition to bags, handbags, handgloves

and industrial gloves, wallets, ruck sacks, folios, brief cases, travelware, belts, sports

goods, upholstery and saddlery goods.

A surfeit of modern units in Chennai, Kanpur and Calcutta employing skilled

human resources and equipped with modern and sophisticated machinery account for a

diversified range of superlative small leather goods including bags, purses, wallets,

industrial gloves etc. made of quality leathers of cows, sheep, goats and buffaloes. The

products meet the requirement of bulk buyers and consumers in Europe, USA and

Australia.

The major market for Indian leather goods is Germany, with an offtake of about

25 per cent of the leather goods produced in India followed by USA, UK, France and

Italy. With products ranging from designer collections to personal leather accessories,

this sector has a share of 20.53 per cent in the leather industry, while maintaining an

average growth rate of 11 per cent recorded in the last five years.

APGMS, Rajampet. 14


Indian Saddlery Industry

India is one of the largest producers of saddlery and harness goods in the world.

The saddlery industry was established in the 19th century primarily to cater to the needs

of military and police. From then on initiatives were taken to develop, the industry and

today there are over 150 units in the organised sector, out of which approximately 105 are

100% export oriented units.

Kanpur, in the state of Uttar Pradesh, is a major production centre for saddlery

goods in India accounting for more than 95% of the total exports of saddlery items from

India. Kanpur, because of its specialisation in tanning and finishing of buffalo hides is the

only centre in the country where harness leather, which is major input for saddlery

industry, is manufactured.

Indian Leather Garments Industry

The Leather Garment Industry occupies a place of prominence in the Indian

leather sector. The product classification of leather garments comprise of jackets, long

coats, waist coats, shirts, pant/short, children garments, motorbike jackets, aprons and

industrial leather garments.

Indian leather garments, which entered the world market only in the mid-eighties

with exports of Rs. 15 crores in 1997-98, account for about Rs. 1530 crore in 1997-98.

The major export destination of leather garments from India is Germany. In 1997,

German imports of leather garments aggregated DM 1786 million of which DM 304

million worth of imports went from India. India, China and Turkey were the major

suppliers of leather garments for the German market, as they accounted for about 78% of

the market share. Among the three major exporting nations of leather garments, India

maintains a similar level of market share of about 20%, in both German and EU markets.

Marketing of leather and leather products in Germany & the EU

APGMS, Rajampet. 15


The leather sector offers a good potential which Indian entrepreneurs can exploit

in Germany and other EU markets characterised by ever growing competitiveness in

terms of price and quality, on one hand, and the environmental considerations, on the

other. With a strong foothold that the Indian leather industry has had for long in these

markets, and its advantage of raw material and labor resources, Indian leather exporters

can, and should, mount a concerted marketing campaign to wrest a share consistent with

their inherent strength and potential.

This has to be done against the background of the well-known salient features of the

German market:

The world's second largest import and export market

A difficult buyers' market with hyper competition and high expectations

A dynamic multi-faceted market with rapid technological development and

innovations A market where a considerable amount of buying power is devoted to

satisfying individual needs

A market influenced by the rising average age of the population and low birth rate

A market where environment awareness and eco-friendly production becomes more and more a

pre-requisite for successful marketing of products

Recipe for market intelligence

Market information through journals and magazines

Schuhmarkt

Schuhkurier

Lederwaren Report

Quick Market Assessment

APGMS, Rajampet. 16


Window shopping

Backward calculation of price

Catalogues/ leaflets

Trade Fairs

GDS – Dusseldorf » Herren Mode Woche - Munich

Expo-Riva Schuh - Italy » Igedo Fashion Fair - Düsseldorf

Leipzig Fashion Fair » SPOGA - Cologne

Marketing channels

The emerging trend in Germany has been towards direct imports. The other

noteworthy feature is the integration of retailing and manufacturing, particularly for the

footwear sector. This has led to increased emphasis on distribution aspects of business.

Other distributors, like departmental stores, mail order houses, super markets and non-

leather shops have also gained importance. Many outlets get direct supplies either from

the manufacturers and importers or from wholesalers and buying associations (Einkaufs-

Verband, e.V.).

For the successful marketing of their products, the Indian exporters should aim for

long lasting trade relations based on stable partnerships. In such a context, the German

importer needs to be viewed as much more than only a buyer and distributor. He would

normally take care of the timely development of the samples and collections through

fashion and design information and also by employing pattern makers and designers.

Environmental aspects for leather products

Manufacturers who produce environmentally sound products will enjoy a

competitive advantage in all business relations with EU in general and Germany in

particular. The pitch has to be to successfully emphasise the environmental soundness of

the product in the information to the buyers since major attention is being paid to the

increasing role of the environmental regulations. Therefore, the manufacturers have to

APGMS, Rajampet. 17


view their products and production processes not just by looking at traditional aspects

like price, quality, customer demands, etc. but also at the environment. Environmentally

sound production, consequently, opens new market opportunities.

Global Scenario :

The global trade in leather and leather products has been increasing over the years

from mere US$ 4 billion in 1972 to US$ 70 billion in 1997.

Although the exports of Indian leather and leather products have grown manifold

during the past decades, our country's share in global trade is around 3% among world

imports of leather products. Whereas India's share in world imports of leather footwear is

1%. Major exporting countries of leather footwear are China (14% share), Portugal (6%

share), Brazil (5% share) and Indonesia (4% share).

India's share in world imports of leather garments is 6%. Major exporting

countries of leather garments are China (36% share), Germany (9% share), Italy (7%

share), Turkey (5% share) and Pakistan (4% share)

East European countries like Poland, Romania, Czech and Slovak Republics have

re-emerged as major production centres particularly for footwear sector. These countries

pose major challenge to Indian exporters as they enjoy geographical advantage.

Vision

In our endeavor to make India the leading hub for Leather fashion design,

Technology and Management in the world, we shall take necessary steps for creating

quality infrastructure for design, development, production and support service system for

the Indian industry. Our efforts would be in the direction, which makes this Institute the

world leader in the field of Fashion, Design, Technology & Management due to the

quality of our response, range of services and cost effectiveness

APGMS, Rajampet. 18


Mission

Development and cultivation of best available human resources within the country

by imparting knowledge and skills by conducting appropriate courses.

In developing and provision appropriate infrastructure for attainment of international

standards.

Indian Leather Industry Highlights

Global leather production is shifting from developed countries to developing

countries particularly India and China.

Consequently, world trade in leather is up owing to increased outsourcing of ‘low

cost – high quality’ leather products by western countries from Asia.

Western Europe, especially the UK, Germany, and Italy account for over 60% of

India’s export of leather and leather products while exports to the US, the largest

market for leather and leather products, have been around 12%.

India is the largest livestock holding country 21% large animals and 11% small

animals and the source for 10% of the global leather requirement.

Leather industry occupies a place of prominence in the Indian economy due to its

massive potential for employment, growth, and exports.

The leather industry in India is:

Segmented between finished leather, footwear, footwear components (uppers and soles

etc.), leather garments, and leather goods viz. bags, gloves, harness and saddlery, etc.

Employs more than 2.5 million people - 30% are women.

Exported around US $2.3billion in FY 2005.

Is targeted to grow at 11.5% annually, trebling production to US $12 billion

and doubling exports to US $4 billion by 2010 with footwear export as the

largest growth segment at US $2.5 billion.

Envisages significant increases in domestic demand for footwear.

APGMS, Rajampet. 19


Envisages investments of about INR 2000 crore (US $450 million) in the next

2 to 3 years for modernizing tanneries and setting up modern production bases.

AGRA

Availability of inexpensive and productive manpower in abundance .

Large raw material supply base (22%) for the industry corresponding to its live

stock population viz. 1st in buffalo, 2nd in cattle, 4th in goat and 7th in sheep.

Over 11,500 leather based production units in UP with Kanpur and Agra as the

two renowned production centers in the world.

Kanpur is a prominent for leather processing with around 200 tanneries

specializing in processing hides into heavy leather (sole, harness and industrial

leather). This is the only center in India where saddlery products are also

manufactured.

Agra is the largest shoe-manufacturing center in the country. Agra, being central

to other important production centers in UP like Kanpur, NOIDA, and Meerut, is

the reason for PSL to develop a LEATHER SECTOR-SPECIFIC SEZ in this

area. Government & Leather Export Promotion Council have also taken the

initiative to make Agra as a SEZ for leather and leather products.

Agra will also serve as a major hub linking with other locations, due to its

inherent strengths.

NOIDA has recently emerged as another major centre especially for leather

garments and footwear. NOIDA offers strong infrastructure facilities, close

proximity to Delhi and the presence of FDDI here is expected to promote the

footwear industry

EXIM BANK: INDIAN LEATHER INDUSTRY

EXPORT POTENTIAL

World Livestock Population

Hides and skins are the basic raw materials for the leather industry, which

originate from the source of livestock. There was an upsurge in the number of bovine

APGMS, Rajampet. 20


animals and goats and kids during 1990-2005, while population of sheep and lambs was

on a decline. Developing countries accounted for around 78% of the total population of

bovine animals and 93% of world population of goats and kids in 2005. Stood at 195

million heads in 2005. Although in 1990, India had the highest population of goats and

kids (21% of the total), it was overtaken by China in 1995 and the gap between the two

countries has been widening.

World Raw Hides and Skins Production

World production of raw hides and skins was nearly 7 million metric tonnes, of

which production of bovine hides and skins alone accounted for 90% in 2004.

Developing countries are the major producers of raw hides and skins. China played a

significant role in turning developing countries as the major source of global imports of

raw hides and skins.

World Leather Exports

World leather exports grew moderately, by a CAGR of 7.3%, from US$ 46 billion

in 2000 to US$ 61 billion in 2004. World leather exports can be categorized in to raw

hides and skins (40%), leather articles (49%) and fur skins (11%). China, Hong Kong,

Italy, USA and France are major exporters of leather in the world. World leather articles

exports increased by a CAGR of 8.06%, from US$ 22 billion in 2000 to US$ 30 billion in

2004. China constitutes 34% of the total leather articles exports. Hong Kong (17%),

World bovine animals population stood at 1,529 million heads in 2005. India had the

largest number of bovine animals (283 million heads) with a share of 19% followed by

Brazil (13%), China (9%) and USA (6%). World sheep and lambs population stood at

1,079 million heads in 2005. With a total population of 170 million heads, China had a

share of 16% in the world sheep and lambs population. India (6%) lagged behind at third

position, with a population of 62 million heads. World goats and kids population stood at

807 million heads in 2005. China has the highest population of goats and kids, which

World Livestock Population in 2005.

APGMS, Rajampet. 21


Exim Bank of India’s Role in Promoting Indian Leather Sector.

Export Import Bank of India (Exim Bank) has helped the leather exporting units

to modernize and upgrade their production facilities, install pollution control and

environmental safety systems of internationally accepted standards and develop export

market for value added products through strategic export market development plans.Exim

Bank implemented Agency Line of Credit and Export Development Project, joining

hands respectively with International Finance Corporation (IFC), Washington and the

World Bank to support small and medium enterprises in the leather sector.

Composition of Indian Leather Exports.

Composition of Indian leather exports has undergone a radical change, from being

a mere exporter of raw hides and skins, to a status of an exporter of value added leather

products. From 1991-92, India has been exporting only finished leather because of export

restriction on semi finished leather. Total leather and leather manufactures exports stood

at Rs.10, 286 crores in 2004-05. Leather footwear is the largest component of leather

exports, with a share of 26%.

World Leather Imports.

World leather imports can be classified in to raw hides and skins, leather articles

and fur skins, with a share of 38%, 55% and 7% of the total world leather imports,

respectively. Leather articles are predominantly imported by USA, Spain, UK and

Belgium; whereas China, Mexico, Turkey and Romania are mainly into imports of raw

hides and skins. Hong Kong, USA and Italy are chief importers of fur skins. World

imports of leather articles are estimated to have grown marginally from US$ 27 billion in

APGMS, Rajampet. 22


2000 to nearly US$ 34 billion in 2004. USA, the largest importer of this product, is

predominantly captured by China. China’s share in USA’s import of

Leather articles have increased gradually, from 54% in 2000 to 70%in 2004.

Indian Scenario

With about 15% of the world livestock population, India accounted for only 8%

of the leather production in 2002. The Indian leather industry consists of 42,000 small-

scale industry (SSI) units, which account for 75% of the total production. Nearly, 2.5

million people earn their livelihood from this sector. A survey by Central Leather

Research Institute (CLRI) estimated that about1, 600 tanneries were present in India in

2000. The concentration of tanning industries is mainly in Tamil.

Indian Leather Exports.

In 2004-05, the industry recorded a satisfactory 5.8% export growth to reach a

level of US$ 2.3 billion. Although, leather exports have increased in absolute terms, its

share in total exports have declined\ in percentage terms from a high of 7.99% in 1990-91

to 2.89% in 2004-05.

Export of Leather and Leather Manufactures (including Leather Footwear, Leather

Travel Goods and Leather Garments).

Year Exports (US$ million)

1960-61 59

1970-71 106

1980-81 493

1990-91 1,449

APGMS, Rajampet. 23


1995-96 1,731

2000-01 1,951

2001-02 1,910

2002-03 1,848

2003-04 2,163

2004-05 2,323

Major Export Markets

The main export markets for India are Germany, USA, Italy, UK and France. Due

to the two bans imposed by Germany on imports from India, there was a lull in India’s

exports in 2002-03. Slowly and steadily, it picked up pace and stood at US$ 326 million

in 2004-05. Exports to USA, which was US$ 343 million in 2000- 01, dropped to US$

243 million in 2002-03 and was at US$ 266 million in 2004-05.

Analysis of India’s Export Potential

India’s major export markets for leather handbags are USA, Germany, UK and

Spain. In UK and Spain, Italy is the top exporting country of leather handbags. However,

China has overtaken Italy and emerged as major exporter in markets like USA, Canada,

Hong Kong and Russia. India has lot of potential in these markets, as it has unique

advantage of economies of scale and capability of producing niche products. Footwear is

a critical segment for the Indian leather industry as this is expected to be the engine of

growth for the Indian leather sector. Currently, the trend in export of Indian footwear has

been encouraging; however the trend for footwear components exports has been

declining. India’s exports of footwear components have dropped from US$ 238 million in

2000-01 to US$ 164 million in 2004-05. Top importers of leather footwear uppers in the

world are China, United Kingdom and Canada. World leather garments exports have

increased over the years. USA, Germany and Japan were the largest importers of leather

garments in the world in 2004. India was placed among the top three exporting countries

of leather garments in these markets. Further, India is the largest sourcing partner of

leather garments to Spain and Italy, which are the major markets for Indian leather

APGMS, Rajampet. 24


garments. India’s other major export markets are Germany, USA and France. But, India

must be cautious of China, as its unit price of leather garments is cheaper than that of

India.

Strategies for Indian Leather Sector

The Indian leather industry is targeting over US$ 5 billion exports by 2010 and is

expected to add about additional 1 million direct and indirect jobs during this period. At

present, the industry employs 2.5 million people directly and indirectly. Shifting of

Manufacturing Base Major World tanning firms are in the process of shifting their

manufacturing base to developing countries due to high wage levels and strict

environmental norms in developed countries. Factors such as availability of leather,

production know-how, processing of shoes work in India’s favor. India could effectively

use these advantages to augment its share in global production and exports. Government

Support Technology up gradation and modernization of the entire leathern value chain

should be given priority. Recently, the Government has approved Rs. 290 crores for

modernization and technology up gradation programme. Strong Production Base The

industry should lay emphasis on design and technology, quality and innovation and

economies of scale. Skill development for the manpower engaged in the sector is vital for

enhancing the export potential of this sector. Consolidation in new markets such as

Croatia, Slovakia and Serbia would sustain the export growth momentum for the Indian

leather industry. Imports of leather articles by these countries have increased in the range

of 20- 30% in a period of five years.

New Trends

The industry needs to keep itself abreast with latest fashion trends in the sector. It

is observed that Italian buyers pay attention not only to the quality of the leather products

but also to the accessories used in the garments. It is imperative that adequate care is

taken about the packing material.

APGMS, Rajampet. 25


Diverse Marketing Techniques

India needs to adopt aggressive marketing techniques in order to endure global

competition. The industry could undertake business delegation to secure overseas

investments and technology partnerships, besides building brand image. Developing

countries like India should have two pronged marketing strategy of simultaneously

targeting low price and high quality markets, rather than the traditional strategy of being

a low price-low quality supplier.

Enabling Infrastructure

The development of the Calcutta Leather Complex is a positive sign as all

amenities are available at one place. Such exclusive leather complexes could be

developed in other major production centers. Improvements in efficiency of ports,

internal transport, customs procedures and supply chain management are necessary for

augmenting the productivity and exports in this sector.

Training Facilities

Training programmes should enable the industry to foresee and adapt to changing

trends and technology. It is imperative that the staff is skilled and well qualified to train

the students. Further, programmes need to be conducted to make Indian exporters aware

of different standards and requirements in the global market to ensure that Indian exports

do not get rejected due to environmental norms.

Features Of Leather Sector In India

Employs 2.5 million persons.

A large part (nearly 60-65%) of the production is in the Small/Cottage Sector.

Annual export value poised to touch about 2 billion US dollars.

Amongst top 8 export earners for India.

APGMS, Rajampet. 26


Endowed with 10% of the world raw material and export constitutes about 2% of

the world trade.

Has enormous potential for future growth.

Very high value addition within the country.

Government Initiatives: Schemes, Policy and Investment

Considering the importance of sector the Government took various initiatives to

encourage export of value added leather products. Under the rule of Licensing/

Reservations all the items of manufacture in the leather sector have been reserved from

the SSI list in 2001. Central Government at their end took various policy support

measures taking under consideration the Leather industry as one of the thrust sectors.

Some snippets from National Foreign Trade Policy 2004-09 were as follows:

Government/ Industry: Views and Proposals

There were certain proposals for 11th Five Year Plan like Stratagem to achieve US

Dollar 7billion export takings by the end of XI five year plan; to increase the equip of

raw hides & skins so as to reduce imports of raw hides & skins; resourcefully address

environmental concerns to make the leather units meet severe environmental norms;

establishing training facilities to cater to the demands of the industry which was facing an

acute shortage of skilled manpower.

Assets

Leather Products

Rs. Crore (Non-Annualised) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08

Gross fixed assets 1418.21 1370.3 1586.59 1705.42 1653.9 1596.15

Land & building 437.71 410.23 450.1 526.69 450.01 481.57

Plant & machinery 807.94 801.08 827.75 813.46 765.15 759.26

Transport & comm. equipment/infrastructure 30.01 35.02 41.02 41.95 42.63 39.16

Furniture,amenities & other fixed assets 93.07 93.34 150.5 151.86 135.07 152.99

Capital work-in-progress 30.92 28.72 123.76 168.47 257.57 159.45

APGMS, Rajampet. 27


Intangible assets 0.61 0.82 1.53 2.97 4.09 4.45

Net pre-operative expenses pending allocation 0.08 1.09 1.93 0.02 0.02 0

Net lease reserve adjustment 0 0 0 0 0 0

Less: Cumulative depreciation 551.15 576.28 649.06 653.95 598.68 570.31

Less: Arrears of depreciation 0 0 0 0 0 0

Net fixed assets 867.06 794.02 937.53 1051.47 1055.22 1025.84

Investments 197.46 137.02 203.91 251.72 285.89 225.56

Equity shares 186 141.27 200.07 181.35 213.34 218.16

Preference shares 1.5 1.5 0.4 1.3 1.3 12

Mutual funds 17.04 21.81 29.87 26.45 23.7 12.53

Debt instruments 8.02 0.26 0.23 7.51 7.52 7.36

Approved securites (slr/statutory req.) 0 0 0 0 0 0

Assisted companies 0 0 0 0 0 0

Others 20.33 34.73 29.01 76.17 81.09 16.69

Less: Provision for dimunition in value of investments 35.43 62.55 55.67 41.06 41.06 41.18

Group companies 180.9 136.89 147 164.29 191.73 207.12

Non-group companies 31.66 27.95 83.57 52.32 54.13 42.93

Market value of quoted investments 13.05 4.1 9.09 17.38 42.3 41.3

Deferred tax assets 8.49 3.06 2.68 3.74 5.65 8.04

Current assets 1633.29 1726.69 1939.49 1960.34 2002.86 2072.29

Cash & bank balance 90.05 111.32 155.62 147.33 128.17 98.2

Inventories 808.2 858.93 937.3 923.21 959.66 969.86

Receivables 678.36 694.27 740.55 787.14 832.89 909.8

Expenses paid in advance 56.68 62.17 106.02 102.66 82.14 94.43

Loans & advances 72.62 57.21 61.2 79.06 96.68 73.99

Deferred revenue expenditure 11.34 8.4 35.04 27.71 12.47 7.45

Total assets 2790.26 2726.4 3179.85 3374.04 3458.77 3413.17

No of companies 72 77 78 73 63 45

Liabilities

Leather Products


Net worth 182.14 94.73 366.691111.0

81287.0

81307.3

6

Authorised capital 747.67 714.71 741.51 775.31 700.06 674.26

Issued equity capital 425.9 411.94 446.63 473.67 406.08 366.9

Paid up equity capital (net of forfeited capital) 413.8 396.18 436.13 463.16 397.9 361.33

Forfeited equity capital 1.38 1.9 1.08 2.07 1.87 1.87

Paid up preference capital (net of forfeited capital) 6.94 8.51 18.81 18.81 16.24 16.24

Capital contibution, suspense and application money 1.66 2.6 11.97 13.11 25.71 45.41

APGMS, Rajampet. 28


Reserves & surplus -241.64 -314.46 -101.3 613.93 845.36 882.51

Free Reserves 933.37 838.631085.6

51173.4

91141.2

61066.1

4

Security premium reserves (Net of deductions) 270.57 274.77 280.65 353.16 279.87 277.79

Other free reserves 662.8 563.86 805 820.33 861.39 788.35

Specific Reserves 17.7 20.43 40.28 45.78 56.34 56.13

Revaluation Reserves 128.99 124.84 99.13 157.18 102.42 113.07

Less Accumulated losses 1321.71298.3

61326.3

6 762.52 454.66 352.83

Total borrowings1060.1

61060.3

11160.7

91118.6

61149.9

21163.7

6

Bank borrowings 713.01 746.75 844.34 745.92 804.13 831.46

Short term bank borrowings 674.35 706.71 725.87 654.95 659.18 540.69

Long term bank borrowings 38.66 40.04 118.47 90.97 144.95 290.77

Financial institutional borrowings 126.63 51.59 96.88 27.2 14.69 18.12

Central & state govt. (usually sales tax deferrals) 11.52 0.2 0.2 0.19 0.07 0.07

Debentures / bonds 20.73 15.7 11.95 25.82 46.2 17.99

Convertible 0 0 0 0 0 0

Non-convertible 20.73 15.7 11.95 24.41 39.08 15

Fixed deposits 21.43 14.73 4.36 15.92 0 0

Foreign borrowings 51.89 22.01 44.19 43.62 28.26 52.14

Of which : euro convertible bonds 0 0 0 0 0 0

Borrowings from corporate bodies 44.59 64.92 45.79 89.37 137.88 167.34

Group / associate cos. 13.78 57.69 36.15 31.3 78.71 88.45

Borrowings from promoters / directors 21.08 21.95 29.82 27.82 23.68 20.77

Commercial paper 0 0 0 0 0 0

Hire purchase borrowings 0.23 0.44 0.22 0.04 0 0

Deferred credit 9.1 7.12 18.84 28.13 48.3 23.66

Other borrowings 39.95 114.9 64.2 114.63 46.71 32.21

Secured borrowings 697.58 701.17 850.98 761.19 843.95 908.96

Unsecured borrowings 362.58 359.14 309.81 357.47 305.97 254.8

Current portion of long term debt 104.37 41.97 11.98 31.57 46.54 72.1

Current liabilities & provisions1505.9

7 1518.81590.3

91079.1

4 964.78 888.72

Sundry creditors 435.65 486.23 567.68 485.08 516.27 539.25

Acceptances 4.26 7.76 8.63 14.41 49.3 45.3

Deposits & advances from customers & employees 15.04 18.71 11.53 43.29 51.43 55.23

Interest accrued 157.45 88.22 80.08 61.89 34.09 8.75

Share application money 0.01 0.51 0.01 0.01 0.01 0

Other current liabilities 801.11 820.52 795.88 341.77 202.17 107.2

Provisions 92.45 96.85 126.58 132.69 111.51 132.99

Deferred tax liability 41.99 52.56 61.98 65.16 56.99 53.33

Total liabilities2790.2

6 2726.43179.8

53374.0

43458.7

73413.1

7

Net worth (net of reval & DRE) 41.81 -38.51 232.52 926.191172.1

91186.8

4

APGMS, Rajampet. 29


Contingent liabilities 397.75 638.95 623.62 652.54 827.36 782.98

No of companies 72 77 78 73 63 45

Profits

Leather Products

Rs. Crore (Non-Annualised) Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 PBDITA 199.59 103.63 103.76 286.5 354.58 247.54 Depreciation 66.17 63.71 67.07 65.87 64.61 67.41 Amortisation 2.96 2.82 1.14 0.79 0.39 0.38 PBIT 130.46 37.1 35.55 219.84 289.58 179.75 Interest paid 238.42 214.7 196.7 108.61 88.08 88.71 Financial charges on instruments 0 0 0 0 0 0

APGMS, Rajampet. 30


Fee based financial services expenses 0.01 0 0 0 0.01 0.01 PBT -107.97 -177.6 -161.15 111.23 201.49 91.03 Provision for direct tax 19.84 36.47 46.59 42.86 42.85 32.51 Corporate tax 12.52 25.41 39.73 36.7 44.64 26.27 Deferred tax 7.3 11.48 7.33 5.59 2.85 6.52 Less: Deferred tax assets / credit 0.01 0.46 0.95 2.91 8.58 3.51 Other direct tax 0.03 0.04 0.48 3.48 3.94 3.23 Fringe benefits tax 0 0 0 3.37 3.87 3.19 PAT -127.81 -214.07 -207.74 68.37 158.64 58.52PAT (as reported by the Co.) -125.27 -209.47 -207.13 69.8 154.78 57.96 Prior period & extra-ordinary income 99.06 10.58 28.84 67.49 75.93 56.66Prior period & extra-ordinary expenses 13.24 11.92 11.6 20.14 12.09 11.95Net prior period & extraordinary transactions -85.82 1.34 -17.24 -47.35 -63.84 -44.71 PBDITA net of P&E 113.77 104.97 86.52 239.15 290.74 202.83PBIT net of P&E 44.64 38.44 18.31 172.49 225.74 135.04PBT net of P&E -193.79 -176.26 -178.39 63.88 137.65 46.32PAT net of P&E -213.63 -212.73 -224.98 21.02 94.8 13.81 Distribution of profits (%) PBDITA 100 100 100 100 100 100

Depreciation & Amortisation34.636003

864.199556

165.738242

123.267015

718.331547

227.385473

1

Financial charges119.45989

3207.17938

8189.57208

937.909249

624.843476

835.840672

2

Tax9.9403777

735.192511

844.901696

214.959860

4 12.08472 13.133231

PAT

-64.036274

4

-206.57145

6

-200.21202

823.863874

344.740256

123.640623

7 Non--provisions for: 13.09 10.32 9.08 1.79 5.18 0.12 Diminution in investement 8.36 8.38 0.05 0.05 0.05 0 Sundry debtors 1.58 1.69 0.24 1.74 1.67 0.12 Loans & advances including NPAs 0.22 0.21 0 0 0 0 Loans & advances to group cos. 0 0 0 0 3.46 0 Interest expenses 2.66 0 8.79 0 0 0 Power expenses 0 0 0 0 0 0 Gratuity 0 0.01 0 0 0 0 Others 0.27 0.03 0 0 0 0No of companies 72 77 78 73 63 45

Income & expenditure

Leather Products


Total income 2575.57 3241.82 3863.06 3940.89 3455.44 3269.01

Sales 2454.52 3209.1 3814.49 3836.07 3357.29 3178.21

Industrial sales 2275.15 2523.68 2976.26 2914.24 2990.51 2571.43

Income from non-financial services 179.37 685.42 838.23 921.83 366.78 606.78

Income from financial services 18.19 19.56 15.28 28.71 15.64 29.86

APGMS, Rajampet. 31


Interest 5.2 5.36 5.98 6.72 4.8 5.01

Dividends 3.31 3.85 1.57 0.85 1.97 1.15

Treasury operations 8.15 8.67 6.14 19.22 6.68 22.02

Other income 3.8 2.58 4.45 8.62 6.58 4.28

Prior period income & extraordinary income 99.06 10.58 28.84 67.49 75.93 56.66

Change in stock 40.34 39.12 40.46 48.49 68.1 71.57

Total expenses 2743.72 3495.01 4111.26 3921.01 3364.9 3282.06

Raw material expenses 1275.09 1363.35 1662 1550.88 1545.31 1256.1

Packaging expenses 43.45 52.58 57.59 49.68 31.79 29.57

Purchase of finished goods 215.37 719.53 844.51 899.86 499.51 658.92

Power, fuel & water charges 60.91 64.83 73.9 78.01 74.77 75.96

Compensation to employees 298.68 324.72 349.76 349.43 351.93 338.91

Indirect taxes 90.19 100.2 109.05 107.5 86.87 61.2

Royalties, technical know-how fees, etc. 13.01 28.08 19.97 16.56 16.61 16.55

Lease rent & other rent 31.22 38.5 46.23 44.96 48.35 79.91

Repairs & maintenance 26.46 30.62 38.23 44.14 37.87 26.39

Insurance premium paid 8.63 9.08 13.35 13.43 12.06 9.46

Outsourced mfg. jobs (incl. job works, etc.) 64.86 76.16 95.7 117.82 107.89 102.04

Outsourced professional jobs 7.88 9.82 13.85 14.93 16.77 22.45

Directors' fees 0.01 0 0.04 0.02 0.05 0.24

Selling & distribution expenses 145.32 181.42 240 233.07 187.32 185.88

Travel expenses 27.56 31.28 37.57 35.4 36.24 34.21

Communication expenses 11.05 12.61 14.64 15.03 14.55 14.24

Printing & stationery expenses 4.85 5.25 6.22 5.97 5.96 6.12

Miscellaneous expenses 23.7 21.13 26.44 33.22 29.73 31.08

Other operational exp. of indl. enterprises 23.03 26.58 28.91 25.83 35.26 32.7

Other oper. exp. of non-fin. service enterprises 0 0.01 0.03 0 0 0

Share of loss in subsidiaries/JVs,etc. 0.02 0.02 0.02 0 0 0

Lease equalisation adjustment 0 0 0 0 0 0

Loss on securitisation of assets/loans 0 0 0 0 0 0

Fee based financial service expenses 9.64 10.64 14.45 13.15 12.3 10.27

Treasury operations expenses 2.13 7.1 8.89 22.45 2.3 7.67

Total provisions 14.42 44.54 8.86 9.8 2.23 1.02

Write-offs 5.66 7.34 78 4.48 2.08 85.16

Less: Expenses capitalised 0.06 0 0.05 0.79 0.88 3.14

Less: DRE & expenses charged to others 0 0 0 2.09 0 1.82

Prior period & extraordinary expenses 13.24 11.92 11.6 20.14 12.09 11.95

PBDITA 199.59 103.63 103.76 286.5 354.58 247.54

Interest paid 238.42 214.7 196.7 108.61 88.08 88.71

Financial charges on instruments 0 0 0 0 0 0

Expenses incurred on raising deposits/debts 0.01 0 0 0 0.01 0.01

PBDTA -38.84 -111.07 -92.94 177.89 266.49 158.82

Depreciation 66.17 63.71 67.07 65.87 64.61 67.41

Amortisation 2.96 2.82 1.14 0.79 0.39 0.38

PBT -107.97 -177.6 -161.15 111.23 201.49 91.03

Provision for direct taxes 19.84 36.47 46.59 42.86 42.85 32.51

PAT -127.81 -214.07 -207.74 68.37 158.64 58.52

No of companies 72 77 78 73 63 45

APGMS, Rajampet. 32


Income details

Leather Products


Total income2575.5

73241.8

23863.0

63940.8

93455.4

43269.0

1

Sales2454.5

2 3209.13814.4

93836.0

73357.2

93178.2

1

Industrial sales2275.1

52523.6

82976.2

62914.2

42990.5

12571.4

3

Sale of goods2148.0

1 2381.92820.1

72769.9

3 2842.82441.4

4 Sale of scrap 0.13 0.11 0.77 0.61 0.71 0.35 Sale of raw materials 16.13 8.41 14.36 12.05 14.34 10.23 Job-work income 23.75 26.82 37.16 38.53 33.73 10.57 After sales service income 1.5 1.44 1.31 1.47 1.64 1.44

APGMS, Rajampet. 33


Construction income 0 0 0 0 0 0 Sale of electricity & gas 0 0 0 0 0 0 Fiscal benefits 85.63 105 102.49 91.65 97.29 107.4 Income from non-financial services 179.37 685.42 838.23 921.83 366.78 606.78 Trading income 174.77 678.72 831.03 913.69 361.33 598.79 Income from financial services 18.19 19.56 15.28 28.71 15.64 29.86 Fee based financial services income 0 0 0 0 0 0 Fund based financial services income 10.04 10.89 9.14 9.49 8.96 7.84 Interest income 5.2 5.36 5.98 6.72 4.8 5.01 Dividends 3.31 3.85 1.57 0.85 1.97 1.15 Income from leasing,etc. 1.53 1.68 1.59 1.92 2.19 1.68 Income from treasury operations 8.15 8.67 6.14 19.22 6.68 22.02 Profit on sale of investments 2.7 1.82 1.85 2.44 2.1 17.53 Profit on long term investments 2.38 0.51 0.39 2.03 0.9 3.91 Profit on current investments 0.32 0.72 0.38 0 0 11.77 Income from other treasury operations 0.5 3.67 0.65 14.45 0 0 Gain relating to forex transactions 4.95 3.18 3.64 2.33 4.58 4.49 Other income 3.8 2.58 4.45 8.62 6.58 4.28 Prior period & extra-ordinary income 99.06 10.58 28.84 67.49 75.93 56.66 Prior period income 80.77 5.78 22.97 50.24 22.94 26.52 Cash prior period income 0.19 0.92 3.27 0.17 0.13 0.36 Bad debts recovered 0.03 0.02 0.91 0.12 0.04 0.03 Residual and combined cash prior period income 0.16 0.9 2.36 0.05 0.09 0.33 Non-cash prior period income 80.58 4.86 19.7 50.07 22.81 26.16 Provisions written back 9.59 4.69 8.91 46.49 22.63 25.59 Residual and combined non cash prior period income 70.99 0.17 10.79 3.58 0.18 0.57 Extra-ordinary income 18.29 4.8 5.87 17.25 52.99 30.14 Profit on sale of fixed assets 7.4 4.78 5.25 6.25 5.27 15.47 Insurance claims 0.03 0.02 0.03 11 2.83 2.48 Contra entry for depreciation added 0 0 0 0 0 0 Gain on change in accounting policies 0 0 0 0 0 0 Change in stock 40.34 39.12 40.46 48.49 68.1 71.57No of companies 72 77 78 73 63 45

APGMS, Rajampet. 34

industry analysis report indian leather industry

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