THE WORLD'S LEATHER AND LEATEHR PRODUCTS INDUSTRY: A STUDY OF PRODUCTION, TRADE PATTERNS AND FUTURE TRENDS by Robert H Ballance, Ghislain Robyn and Helmut Forstner Publisher: Shoe Trades Publishing Limited For UNIDO Price: Not stated
AMONG the many perishable theories that poured out of the minds of management gurus was the notion of sunrise and sunset industries. Beyond the phase of maturity, the prophets laid down, industries would gradually perish. The lifecyle of industries and human beings, it was suggested, is so similar; and it is only understandable why it should be so.
But hindsight presents far less dismal a picture; the theory passed into history while mature industries, including leather, have not seen the end of their days. A more durable precept of the economists says that industries are transmuted as they face the prospect of extinction. Taking an ecological analogy from rainforests, the variety of species increase as each of them finds an abode which nurtures and accomodates them in periods of stress.
It is not necessary that only the sturdier species will survive in the process of natural selection. Only those species which cannot find a congenial habitat face the prospect of extinction. Historical stress transforms industries: their location, products and applications change as companies evolve competitive strategies to survive in a changing environment.
Not too infrequently, industries emerge out of their struggle for survival far more resilient than they were at the outset. Leather today is not just the drab accessory of the humble cobbler, but also the lustrous material fashion designers and upholstery manufactures use for their creations. Traditional buyers of leather, the footwear manufacturers, preferred the more durable plastic materials. In order to survive, tanners learnt to shape leather in forms akin to fabric dry-cleanable, machine-washable and with colour-fast finishes. Superior splitting techniques helped in cutting leather thin and malleable for styling high-priced leather wear.
Unlike plastic, leather acquired a gloss, colour and diversity of texture which designers and interior decorators need to translate their imagination into concrete products. Technical advances in the processing of leather were only a response to changes in lifestyles which reflects in preferences for footwear and other leather products. Health consciousness grew from the '60s onwards. People needed sprightly shoes for jogging, for brisk walks, aerobics, etc. Teenagers could earn enough to respond to advertisements aimed at them.
Numerous price points, design variations and quality differences created room for a variety of players. Far from dying, the leather products industry found an expanding market to cater to. Developed countries witnessed a decline in certain segments of the industry as their wages increased. The Japanese showed the way to relocating leather products in the booming offshore centres of South Korea and Taiwan. High transaction costs of dealing with unknown producers in developing countries had deterred established players from taking advantage of lower wages in developing countries. The Japanese offered technical and marketing assistance to create binding relationships to ensure certainty of supply. American producers then saw an opportunity and shifted entire plants to the Far East.
In computers, developed countries have found a tool which helps to reduce lead times and enables them to stay in a price-sensitive market. The story goes on. East European countries will add another chapater. Their large bovine population, proximity to the major markets and low costs will change the equation among the competitors.
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