1.

SWOT Analysis of Indian Leather Industry SWOT analysis for leather sector based on the information already provided in this section is given below. STRENGTHS Existence of more than sufficient productive capacity in tanning. Easy availability of low cost of labour. Exposure to export markets. Managements with business background become quality and environment conscious. Presence of qualified leather technologists in the field. Comfortable availability of raw materials and other inputs. Massive institutional support for technical services, designing, manpower development and marketing. Exporter-friendly government policies. Tax incentives on machinery by Government. Well-established linkages with buyers in EU and USA. Overview WEAKNESSES Low level of modernisation and upgradation of technology, and the integration of developed technology is very slow. Low level of labour productivity due to inadequate formal training / unskilled labour. Horizontal growth of tanneries. Less number of organised product manufacturers. Lack of modern finishing facilities for leather. Highly unhygienic environment. Unawareness of international standards by many players as maximum number of leather industries are SMEs. Difficulties in accessing to testing, designing and technical services. Environmental problems. OPPORTUNITIES Abundant scope to supply finished leather to multinationals setting up shop in India. Growing fashion consciousness globally. Use of information technology and decision support software to help eliminate the length of the production cycle for different products Product diversification - There is lot of scope for diversification into other products, namely, leather garments, goods etc. Growing international and domestic markets. THREATS Entry of multinationals in domestic market. Stiff competition from other countries.(The performance of global competitors in leather and leather products indicates that there are at least 5 countries viz, China, Indonesia, Thailand, Vietnam and Brazil, which are more competitive than India.) Non- tariff barriers - Developing countries are resorting to more and more non tariff barriers indirectly. Improving quality to adapt the stricter international standards. Fast changing fashion trends are difficult to adapt for the Indian leather industries. Limited scope for mobilizing funds through private placements and public issues, as many businesses are family-owned.

2. SWOT Analysis of the Indian leather industry

Strengths

High Growth Ready availability of highly skilled and cheap manpower Large raw material base Policy initiatives taken by the Government Capability to assimilate new technologies and handle large projects

Opportunities Rising potential in the domestic market

Continuous product

emphasis

on and

Threats Major Limited part of the for

development

design upgradation

industry is unorganized

Growing fashion consciousness globally Use of information technology and decision support software to help eliminate the length of the production cycle for different products

scope

mobilizing funds through private placements and public owned)

issues are in of

(many familyobtaining private

businesses Difficulty high

Use of e-commerce in direct marketing

bank loans resulting in cost borrowing Stricter standards

international

High competition from East European countries and other Asian countries

Weaknesses Lack of warehousing support from the government

Lack of communication facilities and skills

International price fluctuation Huge labour force resulting in high labour charges Lack of strong presence in the global fashion market Unawareness of international standards by many players

3.SWOT Analysis of the Indian leather industry Opportunities

Rising potential in the domestic market Growing fashion consciousness globally Use of information technology and decision support software to help eliminate the length of the production cycle for different products Use of e-commerce in direct marketing

Strengths

High Growth Ready availability of highly skilled and cheap manpower Large raw material base Policy initiatives taken by the Government Capability to assimilate new technologies and handle large projects Continuous emphasis on product development and design upgradation

Weaknesses

Lack of warehousing support from the government International price fluctuation Huge labour force resulting in high labour charges Lack of strong presence in the global fashion market Unawareness of international standards by many players

Threats

Major part of the industry is unorganized Limited scope for mobilizing funds through private placements and public issues (many businesses are family-owned) Difficulty in obtaining bank loans resulting in high cost of private borrowing Stricter international standards

High competition from East European countries and other Asian countries Lack of communication facilities and skills

4. SWOT Analysis of the Indian Leather Industry Strengths o Uniqueness of Leather o Fashion Choice o Fine Quality of Skins o Abundance of Human Resource o Easily Accessible Raw Material o Prevalence of Production Chain from Village to Fashion o Versatile Bio-Polymer Collagen o Policy Support from the Government o Encouragement by International-Development Agencies Weakness o Traditional Processing Technology o Dependence on Imported Machines and Components o Inadequate Internal Demand o Pollution Problem o High Degree of Subjectivity in Quality Assessment and Grading o Widely Dispersed Units o Insufficient Enterprising Attitude of the Industry o Poor Database o Technology Management and Financial Problems Opportunities o Incentive from the Government o Advances in Modern Biology, Genetics, Chemical Engineering, Computers and Electro polymer Science o Opulence of Synthetic Support Materials o Preference for Indian Leather The Goodwill factor Threats o Environmental Pollution may force closure of Tanneries unless relocated to a specified cluster o Liability Aspects of Pollution o High Price of Leather & Leather products o Inelastic Supply of Raw Material o Perpetual Dependence on Western Market o Rising Aggressive Competition from International Players o Challenges from Synthetics

Recommendations: Animal Banks- Up gradation of the raw material and other related items warrant animal husbandry should be made into an independent industry by forming animal banks. Non- Conventional Raw Materials Alternative sources of raw materials, viz from other animals, e.g. camels, mules, donkeys and horses should be exploited 2-3 Tier System of Leather Technology- Adoption of multi layered system of operation may contribute towards improvement of the quality of the end-product Industrial Estates-Formation of Clusters would enable the industry to make the effluent treatment process more organized and seamless. Base Shift to Coastal Area- Proximity of the production unit to the coastal area would ease procurement of water and the disposal of effluent. Auxiliaries within the country- Much of the expenses could be pruned by using the auxiliaries required for fashionable leather products within the country. Manufacturing Machines- Foreign Collaboration should be sought to manufacture machines for the leather and leather products. Technical Training- The workers in the leather plants are required to undergo exhaustive training process so that they are equipped to operate in an advanced environment Market Knowledge-Industry should be well versed with any latest development in the Leather World through active interaction and participation in International Expositions and Conferences R & D R&D should be constantly up graded to be at par with the global village.