CHENNAI: Leather manufacturing units in Tamil Nadu’s leather hubs of Vellore, Ambur, Vaniyambadi and Ranipet now wears a deserted look. With the previously bustling factories shut down due to the COVID-19 pandemic and a massive cancellation of export orders, leather traders and exporters are staring at an uncertain future.
According to K R Vijayan, Chairman, Indian Finished Leather Manufacturers and Exporters Association, over 55 per cent of export orders have been cancelled in last two months, while about 10-15 per cent of orders have been put on hold.
In 2018-19, India’s leather industry exported goods worth $5.6 billion, a figure it is unlikely to achieve in the financial year ending March 31, 2020.
The figure may be unachievable even in the financial year 2020-21, the Council of Leather Exports (CLE) says. Already, export orders worth over $1 billion for the months of April, May and June have been cancelled, say, leather makers.
“We are experiencing an unprecedented situation. Our raw materials are stuck in transit, payments are due, exported products are lying at ports since brands are not collecting their consignments. Moreover, a majority of the units in the sector belong to the MSME category and it is difficult for them to sustain these huge losses,” said Sanjay Leekha, vice chairman, CLE.
There are around 3,500 registered leather manufacturers and exporters in the country and the industry employs over 4.2 million people. The impact is likely to be more visible in the south since nearly one-third of India’s leather factories are located in southern India.
“The situation is quite challenging as 70 per cent of my orders stand cancelled. From where will I repay my bank loans?” worries S Sivaraman, a leather unit owner in Ambur, Tamil Nadu.
P Aqeel Ahmed, chairman, CLE, says a revival without government support is tough. “The market is very unstable and it’s difficult to predict when normalcy will be restored,” he said.