Sunday, 14 June 2015

Beef ban hits Dharavi leather traders hard

Over the past three months, Haji Farookh, a third-generation leather trader has seen his business endure noticeable shifts. His godown, crammed with animal hide not too long ago, is almost vacant, while his labour force has shrunk from six to one.

Since the BJP-led government in Maharashtra banned the slaughter of bulls and bullocks, there has been an acute shortage of raw material for the leather industry. The impact is the most severe in Dharavi, one of the world’s largest slums, where Mr. Farookh operates. Though past its prime, the slum still boasts a thriving leather industry of small-scale units.

Prior to the ban, Dharavi would receive the hides of 450 bullocks and 50 buffaloes every day from the Deonar slaughterhouse, the largest in Asia. That figure has plunged to around 200, all heavy-duty buffalo hide, which has a limited and niche usage because of its hard and rough texture. Bull skin, which boasts a finer grain, durability, sharper look and comfort, is preferred for making consumer leather products such has shoes, belts, jackets and handbags, Dharavi’s mainstay. Several small units have shut down over the weeks owing to the raw material shortage. Hundreds of labourers have been rendered jobless. “The future is dark. We know nothing other than this trade. We lack the resources and the knowledge to start another business. What do we do now,” asks Mr. Farookh.

Citing pollution fears and other factors, the successive governments shut down the tanneries in Dharavi. Today, raw hides are salted in the slum and sent for processing to tanneries in Kanpur, Kolkata and Chennai. The processed leather is sent back to Dharavi for being made into attractive products, which are also exported.

Chinese imports
The influx of Chinese imports, competing alternatives like rexine, cut-throat competition, rising costs, low margins and government apathy have left a once-thriving industry in the doldrums. With the beef ban and no alternative employment, those involved in the leather trade stare at a bleak future. “It was like an earthquake. It shook our core…there were no warnings,” said Maqsood Khan, a prominent trader. The raw material shortage has already pushed up the price of leather products made and sold in Dharavi. As cheaper alternatives like rexine and attractive Chinese products gain popularity, manufacturers expect the demand for leather to fall further.

Since Maharashtra is a major supplier of top quality raw material, tanneries and manufacturing industries across India are feeling the pinch. They are forced to buy hides at increased rates and face a shortage of supply. Leather production is expected to be hit in Kanpur, Kolkata and Chennai.

Rafeeq Ahmed, chairman of the Council for Leather Exports, based in Chennai, said the short supply put pressure on pricing, especially when the international market was not in good shape. “With the rising price, the Indian leather is finding it difficult to compete in the international market. As opposed to last April, the annual growth rate has fallen from 10.4 per cent to minus 4.5 per cent,” he said.

In Kanpur, where tanneries face government action for reportedly polluting the Ganga, the raw material shortage has caused the price to rise. Since international rates are lower, exports have been hit. Sharique Shamim said his business faced a negative shift of 40-50 per cent in the last three months.

“It’s been so drastic. The source of supply is cut. Raw material is expensive. The orders have shrunk remarkably as Bangladesh, Brazil and Pakistan offer cheaper goods,” said Mr. Shamim. To meet domestic demands, local leather industries will have to import raw material, experts say.
http://www.thehindu.com/news/cities/mumbai/beef-ban-hits-dharavi-leather-traders-hard/article7313098.ece

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