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China Leather Industry Still Dominant Despite Challenges

After a slow start to 2016 mainly due to the lack of footwear orders from the developed western economies, China’s leather sector and its overall exports reawakened at the end of Q1. A mild winter, excess inventory and flat retail sales both in Europe and the USA contributed directly to sluggish manufacturing activity in China’s footwear factories. The slow demand for footwear leather was offset by the buoyant automotive sector which has been the driver behind the leather sector for at least the last year and a half. This fact, in conjunction with lower slaughter levels in leading supplying countries such as Brazil, Argentina and Colombia and the bans by other countries on the export of raw and semi-finished leather, has kept raw material prices steady with solid demand for top grades but with still large inventories to move of lower grade material. After pricing itself out of the market almost two years ago, footwear manufacturers began to substitute leather for synthetic materials whose price had fallen on the back of a collapse in the price of crude oil. With approximately 58% of leather demand generated by the global footwear industry, the rise in demand for synthetics and performance materials to replace leather has negatively impacted the footwear tannery sector. Nonetheless, there are clear signs that demand for leather and raw materials is picking up in recent weeks. For example, the United States Hides, Skins & Leather Association (USHSLA) has reported an increase in exports of 3.5% in volume compared to the same period last year in Q1; Brazilian exports for April also showed an increase in volume for the first time this year – up 2.3% compared to last April. Add to this the fact that China’s GDP is running within government targets at 6.7% and – more importantly – retail sales activity in Mainland China continued to motor along at a rate of 10.5% in March. Thus, in terms of recovering demand for leather and internal demand in China at retail level there is good reason to be optimistic. With three months to go before the inauguration of the 19th edition of the All China Leather Exhibition (ACLE) which will run on the same dates as last year (31 August – 2 September, Wednesday - Friday), the Organisers can report that the fair is progressing in a positive vein and highlight the following: So far 19 group pavilions have confirmed their participation at ACLE 2016, including Australia, Brazil (2), Ethiopia, France, Germany, India, Italy, Japan, Korea, Pakistan, Spain, Taiwan (3), Thailand, Turkey and USA (2). The 2015 fair attracted over 23,000 visitors mainly from the principal manufacturing provinces of China who came to find new suppliers and source new products. As a result ACLE is the only leather event in Mainland China where so many buyers gather and can be seen under one roof during the three intense days of the exhibition. The dynamics of the China market are reflected at ACLE and in its ongoing success since its first edition in 1998. With more than 1,000 exhibitors participating, the range of leathers and chemical products plus machinery represents the whole supply chain of the leather making process. ACLE, as the definitive event for the leather industry in China, will reflect what is actually happening in this sector. As Mr Su Chaoying, Chairman of the China Leather Industry Association, stated in his report on the state and outlook of the industry in his presentation at APLF 2016: “China has achieved double-digit economic growth over the last 20 years. It is impossible for China to maintain such a high rate of growth in the future as internal and external factors have changed. The country is now going into a transition period. The economy is shifting from export-led, investment-fueled growth, to innovation and consumption-driven growth which has brought new challenges to China’s leather industry”. As was the case last year, ACLE will be held in a challenging economic environment and against the backdrop of the Chinese government’s policy to enforce strict environmental regulations for polluting industries which has resulted in the closing of some smaller tanneries but the strengthening of larger ones. However, the facts for the performance of China’s leather industry speak for themselves. In 2015 total exports were US$86.13 billion; imports reached an all time record of US$9.57 billion – an increase of 2.1% compared to 2014. These phenomenal figures are where opportunities lie for suppliers to China’s leather sector and ACLE is the business platform where to meet the key buyers and decision makers. Some footwear production has moved from China to other S.E. Asian countries such as Vietnam and Cambodia where wages are much lower. But none of these countries can possibly match or even less replace the manufacturing capacity, infrastructure and quality control exercised in China’s highly experienced footwear manufacturing sector. The only country where it is possible to manufacture 4.56 billion pairs of leather shoes, export 840 million pairs to help satisfy global demand is China. This is the country that needs to import enough leather to feed its production lines and according to the co-organisers of ACLE, CLIA, imports of finished leather were 160,000 tons worth US$2.63 billion in 2015. On the chemicals front the German Association TEGEWA will launch an initiative on safety during ACLE. TEGEWA represents Europe chemical suppliers in the field of textiles, leather, auxiliaries and detergents. All are well known German, Swiss and Dutch chemical supplier in the field of leather and are working together on general items such as REACH, ZDHC compliance and safety. As usual there will be a contingent of key VIP Buyers at ACLE 2016 and although there is a predominance of buyers from Mainland China, attendance is very international as many footwear brands and multinational companies source and produce in China and have their local sourcing teams attending the fair. - END -

Notes to Editors About All China Leather Exhibition (ACLE) All China Leather Exhibition (ACLE) is known as the premier event for international companies seeking opportunities in China's huge markets. Since its inception back in 1998, ACLE has welcomed hundreds of thousands of buyers from the main manufacturing provinces of China where leather is tanned and footwear and leather goods are manufactured. In fact, a majority of buyers come from China, making ACLE the hub of activity for the leather industry. ACLE offers many “upstream” sources of semi-finished leather to Chinese tanners so that the leather can be finished in China. There are also finished leathers of high quality available from many leading western tanneries in the international tannery hall at ACLE aimed at local footwear and automotive leather manufacturers. The exhibition provides the largest variety of leather, chemicals, components & accessories, manufacturing equipment and tools, machinery and technology. For more fair details, please visit http://www.aclechina.com/. About the Organisers ACLE is organised jointly by the China Leather Industry Association (CLIA) and APLF Ltd. CLIA is the only officially recognised representative body for China’s vast and successful leather industry. CLIA has at its disposal the largest and most comprehensive databases of leather makers and manufacturers of finished products, suppliers and buyers. APLF Ltd is a joint venture between SIC Group and UBM Asia. For over two decades, Hong Kong-based APLF Ltd has been providing the global leather and fashion industries with its most important meeting and trading place. About UBM Asia (http://www.ubmasia.com/) Owned by UBM plc listed on the London Stock Exchange, UBM Asia is the largest trade show organiser in Asia and the largest commercial organiser in China, India and Malaysia. Established with its headquarters in Hong Kong and subsidiary companies across Asia and in the US, UBM Asia has a strong global presence in 24 major cities with 32 offices and 1,300 staff. With a track record spanning over 30 years, UBM Asia operates in 19 market sectors with 230 events, 28 targeted trade publications, 18 round-the-clock online products for over 2,000,000 quality exhibitors, visitors, conference delegates, advertisers and subscribers from all over the world. We provide a one-stop diversified global service for high-value business matching, quality market news and online trading networks. UBM Asia has extensive office networks in China, Southeast Asia and India, three of the world’s fastest growing B2B events markets. UBM China has 12 offices in the major cities in mainland China, including Beijing, Shanghai, Guangzhou, Hangzhou, Guzhen and Shenzhen, where we organise 90 events. In ASEAN, UBM Asia operates from its offices in Malaysia, Thailand, Indonesia, Singapore, Vietnam and the Philippines with 70 events in this region. UBM India teams in Mumbai, New Delhi, Bengaluru and Chennai organise over 20 events every year across the country. UBM Asia was awarded ‘Asia’s Most Reliable Trade Show Organizer Award’ in Hong Kong’s Most Valuable Companies Awards (HKMVCA) 2016. About UBM plc (http://www.ubm.com/) UBM plc is a leading global events-led marketing services and communications company. We help businesses do business, bringing the world’s buyers and sellers together at events, online and in print. Our 5,000 staff in more than 20 countries are organised into specialist teams which serve commercial and professional communities, helping them to do business and their markets to work effectively and efficiently. For more information, go to /; for UBM corporate news, follow us on Twitter at @UBM_plc and go to http://media.ubm.com/socialfor more UBM social media options. For fair details, please contact: Ms Perrine Ardouin, Director - Fashion Team Email: Perrine.Ardouin@ubm.com For media enquiries, please contact: Ms Rachel Yan, Marketing Communications Executive Email: Rachel.Yan@ubm.com APLF Limited 17/F China Resources Building 26 Harbour Road, Wanchai, Hong Kong Tel: (852) 2827 6211 Fax: (852) 2827 7831 Website: http://www.aplf.com/ / http://www.aclechina.com/