Leather industry is one of the most recognized fraternities leaving an impact on the world’s economy. Leather chemical market, in this regard, stands as a major recipient of the expanding business of leather – one of the most extensively traded commodity. In the year 2016, the worldwide leather chemicals market registered a revenue of USD 6 billion. The course of commercialization has however witnessed a significant change, particularly in terms of location-based aspects. The developing economies have emerged as chief leather raw materials suppliers over the past few years while the developed economies have suffered a downturn due to the reduced supply of hides and skins. In fact, these economies have gained a further edge, driven by the efforts of expanding their industries to end-to-end operational capabilities, i.e. manufacturing finished products.
Another chief trend that has added to the globalization of leather chemicals market is the rapid industrialization. With enhanced lifestyle and disposable incomes, undoubtedly the demand for leather products is expected to surge exponentially. Again, the developing economies experience an upper hand in terms of this factor. In fact, as per industry estimates, Asia Pacific leather chemicals market led the global landscape in 2016, while North America held 20% of the overall business space in the same year.
A large chunk of the global leather chemicals industry share was procured by footwear applications, which dominated the end-use landscape in 2016. Other consumers of this industry are automobile, garments, gloves, furniture, etc. Below is a demonstration of the global end-use landscape by revenue in 2016.
Global Leather Chemicals Market Revenue, By End-Users
The changing dynamics of these application sectors will shape the regional hierarchy in the coming years. For instance, having a dominance in terms of urbanization potential, automobile industry growth, and footwear production capacity, Asia Pacific’s foothold in the worldwide commercialization spectrum seems to be strong.
Below is an outline of the global leather chemicals industry scope in terms of regional trends, end-use terrain, and governmental rollouts:
India Leather Chemicals Industry Trends
India leather market has witnessed a structural transformation over the past couple of decades. The industry which merely focused on exporting raw materials has now established a prominence in the overall Indian economy. In fact, this revolution of sorts has led to the leather market fall among the top eight export revenue drivers for India. It allegedly holds 10% of the worldwide raw material and 2% of the global trade.
Amidst this backdrop, the regional leather chemicals market stands as a major subset of this industry with a record high profitability potential in the coming years. As per industry estimates, in the year 2016, India leather chemicals market held a valuation of USD 615.2 million and is anticipated to surpass USD 1,139 million by 2024.
It is imperative to mention that the governmental rollouts have played a substantial role in shaping India leather chemical industry trends. Reportedly, the leather industry in the country sources employment opportunities to more than 4 million people. Scarcely, the Indian government approved an INR 2,600 crore package to facilitate employment growth in the leather and footwear domains. The new initiative, as is being reported, has the potential to generate 3.24 lakh new jobs in a span of coming three years.
In yet another chain of events on the administrative front, the CLE (Council for Leather Exports) has requested the government to provide IGST exemption on raw material imports and capital goods. The council has reported the IGST charges to have been affecting the competitive potential of Indian leather industry, which is reported to have an annual turnover of USD 5.6 billion. If reports are to be believed, the government may intervene soon in a bid to save the interests of this sector.
Overtly, these norms will have a direct impact on the overall end-use spectrum of leather chemicals market, in terms of volume as well as revenue. Below is an outline of the India leather chemicals market with top-three end-users as the frame of reference:
Footwear: India is the 2nd largest producer of footwear and leather garments in the world. Backed by this strong portfolio, the regional footwear industry stands as the top-notch revenue driver for India leather chemicals industry. In fact, as per reliable sources, the regional leather chemicals market share from footwear applications was USD 310.9 million in 2016. As per industry estimates, India leather footwear market revenue is projected to register a double-digit growth rate over the coming three years. India allegedly produces more than 700 million pairs of leather footwear annually and accounts for 18% of the overall Indian leather export.
Furniture: India currently stands as the 14th largest furniture market worldwide, with a prominent chunk procured by the leather furniture. In terms of the revenue drivers, furniture is anticipated to hold the 2nd rank in India leather chemicals market. As per reliable estimates, the regional industry share from furniture stood at USD 94.7 million in 2016 and is projected to witness a CAGR of 6.5% over 2017-2024. Increasing disposable incomes of the consumers in this region coupled with rising demand for luxury furniture are anticipated to be the chief factors driving the end-use share over the coming years.
Automobile: As per market estimates, automotive is the third major application arena of leather chemicals market. In the year 2016, this segment held USD 67.4 million of the overall leather chemicals market landscape and is projected to surpass a volume of 85 kilo tons by 2024. The region being one of the largest automotive markets stands tall with reference to its growth prospects in the leather chemicals industry. For the record, the production of commercial vehicles, three wheelers, passenger vehicles, and two-wheelers were 21,415,719 vehicles in December 2017. With synonymous growth trends anticipated for the auto industry and huge demand for leather in seat covers and other accessories, this end-use segment appears to contribute phenomenally to India leather chemicals market.
India Market Revenue, By End-Users
China Leather Chemicals Industry Trends
In 2016, Asia Pacific led the worldwide leather chemicals market landscape and if reports are to be believed, the trend is forecast to be synonymous in the coming timeframe. Now, speaking of the chief revenue pockets for APAC market, India and China stand tall in the regional hierarchy. In 2015, the total China leather industry export was valued at USD 86.13 billion. Add to it, the imports registered an all-time high of USD 9.57 billion, which was a surge of 2.1% from 2014. The facts speak for the China leather industry performance graph and in turn, the regional prospects of the leather chemicals industry. As per a report by Global Market Insights, Inc. China leather chemicals market in 2016 stood at USD 931.3 million and is projected to register a CAGR of 7.4% over 2017-2024.
Again, the end-use landscape places footwear on the top, contributing a major chunk to the regional leather chemicals market share. As per reliable estimates, China stood as the largest shoe manufacturer and consumer worldwide in 2015. Reportedly, 23 billion shoes were produced in the country in the same year. The data validates the potential for leather chemicals in footwear applications: China leather chemicals industry share from footwear applications is estimated to surpass USD 886 million by 2024.
Not to mention, the other segments including furniture, garments, gloves, and automobiles also played a major role in shaping the regional trends. Below is a snapshot of the end-use landscape in terms of the revenue procured in 2016.
|Segment||Revenue in 2016 (USD Million)|
China Market Revenue, By End- Users
U.S. Leather Chemical Industry Trends
According to FAO, in the year 2014, approximately, 18 thousand tons of heavy leather was produced from bovine animals in the United States. The U.S. hide, skin, and leather industry registered an export value of USD 2 billion in pigskins, hides, and semi-processed leather products in 2016. The U.S. hides and skin companies are also reported to be one of the top raw material suppliers of the worldwide leather manufacturing industry. The facts speak for themselves regarding the potential, though precisely untapped, for the U.S. leather chemicals market. It is imperative to mention that U.S. industry trends are largely dependent on its international trade policies and foreign markets.
However, even amidst these fluctuating trends, analysts anticipate the U.S. leather chemicals industry to gain substantial momentum from footwear applications. The footwear sector has been one of the prominent consumers of the domestic leather. As per estimates, in 2016, U.S. imported more than 2.3 billion pairs of shoes and exported close to 75 million pairs. Backed by this large consumer base for footwears, leather chemicals market stood as a major beneficiary of this factor and recorded a market size of 336 kilo tons in 2016 from these applications.
Also, the industry witnessed major gains from the expanding personal protective equipment market which recorded a revenue of USD 37 billion in 2015. The market is source to a massive demand for gloves, footwear, etc. to ensure the safety of workers in accident-prone industries. Other markets for leather chemicals include automobile, garments, furniture, etc.
U.S. Market Volume, By End-Users
Considering the above regional trends, it is rather overt for Asia Pacific to remain as the top-notch contender in the global business space. Cheap labor cost and competitive product pricing are slated to aid APAC’s stance further. The administrative framework is further projected to be a chief factor influencing the regional trends. However, the regulatory framework is not just a prerequisite for Asian countries but rather the worldwide leather chemicals industry. The statement comes on the heels of the recent accusations on this space with regard to its harmful environmental impact. Reportedly, a large volume of polluting chemicals is used in skin tanning process. Approximately, 20-80-meter cubes of wastewater is produced while processing one ton of skin or raw hide. This also includes chromium levels of 100-400 mg/L.
The industry is anticipated to witness some revenue loss pertaining to these negative trends. One similar initiative was announced by San Francisco lately, where it is on the verge of becoming the first major American city to ban the sale of fur. The measure has been taken to save the interests of animals. However, being rather close to fur sector, industry analysts are contemplating if similar measures could plague the leather industry as well down the line.
Nonetheless, the industry being endorsed with some renowned names like BASF, Lanxess, Bayer AG, Clariant, etc., well-known for their CSR and environmental-protection activeness is forecast to flourish in terms of both revenue and volume in the coming timeframe. Global Market Insights, Inc. projects the worldwide leather chemicals market share to surpass USD 10 billion by 2024.