Leather industry hurt by dwindling supplies
ISTANBUL - Hürriyet Daily NewsA lack of leather supplies is one of the pressing problems facing global leather producers today, said Yücel Yılmaz Executive Board Director of Kuzu, one of Turkey’s leading leather jacket producers, in an interview with Hürriyet Daily News.
“When leather exports first started booming in the 1960s, there were 500,000 sheep and goats, but although the global population has risen significantly since then, the numbers of sheep and goats still remains the same,” said Yılmaz. As demand for leather increases, so too do the prices as a wide range of sectors are dependent on leather, including the automotive and furniture sectors. Luxury auto producers have begun to make leather seats optional features for customers who are willing to pay more for it, according to Yılmaz.
With high demand and limited leather supplies, Yılmaz said some Turkish leather producers have even opted to import leather jackets from countries such as India and Pakistan, which he says are at a relative comparative advantage because they have a large number of goats and sheep.
Last year Turkish wholesalers imported 500,000 leather jackets from Pakistan and India, according to Yılmaz.
“It’s rather easy for them to just cut off the labels and attach a ‘made in Turkey’ stamp, but of course the leather is not necessarily of the same quality and this harms the Turkish leather sector as a whole,” explained Yılmaz.
Yılmaz is advocating for the government to protect Turkey’s leather sector, which he says is very labor intensive. None of the government’s incentive schemes have been of much assistance to the leather sector so far, said Yılmaz. Turkey exports $1 billion on average per year, but this number can be as high as $2 billion depending on leather supplies.
According to Yılmaz the Turkish leather sector really got off the ground in the 1990s. Production facilities were moved to the organized industrial zones in areas like Çorlu and Tuzla and brand new, state of the art leather factories were built.
“We have the world’s most modern leather production facilities. Now Italian and Greek leather specialists come here to work in our Turkish leather plants,” said Yılmaz. Yılmaz likens the look of Turkey’s leather production facilities to “pharmacies.”
The Turkish leather sector is number one in the world and its quality is comparable if not better than that of Italy, according to Yılmaz. Neither is China a competitor said Yılmaz.
“We actually sell to China. Since it is a consumption based society, this creates a huge opportunity for us,” he said.
Kuzu, established by Remzi Yılmaz, started as a family outfit and has been operating since 1960. In addition to supplying wholesalers, the company has six stores in operation, which it opened two years ago. The company plans to open nine more stores this year along with a boutique shopping center in the beach town of Kuşadası on the Aegean coast. The company has an annual turnover of $20 million, of which $12 million is exports alone. Kuzu exports to both wholesalers and boutiques in countries like Germany, France, and other Northern European countries. Kuzu also caters to local tourists on a seasonal basis as it tries to extend the length of the leather season.
Recently, Kuzu has branched out to the production of bags and belts. Next month they will begin producing shoes. k HDN