Hides, skins and leather

The leather industry has been around for thousands of years – ever since mankind began hunting animals.

Hides and skins are a by-product of the meat industry, so supply does not react to demand for leather, but for meat. Leather is used in the automotive, footwear, furniture, clothing, leather goods and exotic leathers (e.g. ostrich) sectors.

Leather makes a contribution to the quality of everyday life: virtually everyone wears or uses one or more leather products on a regular basis.

Contents

International business environment
Local business environment
National strategy and government contact
Associations involved
Training and Research
Companies involved
Websites and publications

International business environment

South Africa imports and exports

The South African government is looking to ban the export of of raw and wet salted hides, and to place an export tax of 20% on wet blue grain and drop splits, and full substance wet blue hides – see heading 4.

The major market for South African exports is Asia, followed by Europe. Hides and skins are imported from Brazil, India and Argentina. The latest annual A Profile of the South African hides, skins and leather market value chain looks at exports and imports. This includes tariffs and standards which have to be satisfied to access various markets like the EU, China and the USA. (Developing nations produce leather for export under license from retailers/buyers in developed countries, according to what these buyers want.)

Sources: A Profile of the South African hides, skins and leather market value chain 2015, available at www.daff.gov.za.

Local business environment

Find statistics on hides and skins at www.levyadmin.co.za.

  • The demand for hides by the automotive sector out-strips the number of cattle slaughtered locally.
  • Over 60-70% of South African hides are regarded as suitable for automotive leather.
  • The increase in feedlots over the years has led to better quality hides (animals spend less time in the veld). These can be rated higher than other sub-Saharan African and most Asian hides, but they remain inferior to most hides from Australia, Argentina, the US and Europe.

The value chain is divided into five stages:

  • skin & hide supply (farmers, feedlots and abattoirs)
  • semi-processed leather
  • finished leather
  • finished products
  • the market

For a more detailed consideration, consult the publication A Profile of the South African hides, skins and leather market value chain 2015 (see heading 8).

Hides: an opportunity for commercialisation?

Skins and hides are a rich source of raw material in South Africa’s leather value chain. Most abattoirs have partnerships with skins and hide traders who export raw skins and hides as well as low value-added semi-finished leather products.

At the same time, hides from communal cattle farmers are thought to be going to waste or attracting only very low price in informal markets. These hides are a communal resource whose value would be greatly enhanced if they could be processed into tanned leather and supplied for further value addition in the labour-intensive footwear, furniture and automotive leather value chains.

The skins & hides available in the informal sector could also create business opportunities for communal entrepreneurs to act as emerging hide merchants; and the sector could be substantially upgraded by training informal slaughter operators, emerging farmers and herders to prepare hides, collect and sell them to local tanneries. A main impact will be better slaughtering practices by communal farmers, generating better quality hides which fetch higher market prices.

Source: the 2015/16 – 2017/18 and 2016/17 – 2018/19 IPAP documents, both available at www.thedti.gov.za.

The following are the main categories of skins or hides according to species.

  • Bovine (cattle) hides dominate the supply of leather in South Africa. They are mainly by-product of meat production supplied by feedlots.
  • Sheep skin is produced with or without wool mainly for export market.
  • South Africa does not have significant supply of pig skin as this tends to be part of the meat.
  • The supply of goat and kid skins is low as the majority of goats are slaughtered outside the abattoirs.
  • Unlike bovine, ostrich is bred primarily for its skin; and ostrich meat becomes a by-product. Ostrich leather is unique with its feather quill pattern. This gives it extra strength and durability which is 7 times stronger than bovine (cattle) hide. Ostrich leather is used to produce handbags, wallets, shoes, clothing etc.
  • Many wild animals including elephants and buffalo are main sources of leather.
  • Crocodiles and snakes are bred for their skins.

Sources: A Profile of the South African hides, skins and leather market value chain 2015, available at www.daff.gov.za; The introduction to leather at www.leathercouncil.org.

National strategy and government contact

Government’s Industrial Policy Action Plans (IPAPs) includes the Clothing, Textiles, Leather and Footwear sector. The Competitiveness Improvement Grant (CIP) supports a number of national and sub-national clusters which promote world class manufacturing processes and principles. Two programmes are:

  • The National Footwear Leather Cluster (NFLC), a facility established by the Department of Trade and Industry (the dti) at the Vaal University of Technology (VUT), is part of the intervention by government to create sustainable jobs and reduce the trade deficit.
  • The Exotic Leather Cluster (ELC). This involves crocodile and ostrich leather beneficiation. It is a collaboration between the Department of Trade & Industry and the University of Pretoria (see heading 6). Watch the video on YouTube called “Exotic Leather Cluster SA”.
  • Based on National Treasury’s “Draft Guidelines on Export Taxes”, the dti is pursuing a ban on “on the exports of ‘raw hides’ and export duties on the semi-finished ‘wet blue’ (full substance, grain split and drop slit) aimed at effective diversion of the leather raw and semi-finished resources for downstream value addition (African Leather, Vol12, No 5, May; IPAP 2017/18-2019/20).

The leather and footwear sub-sector has registered positive results: Between 2010 and 2016, exports of leather and footwear grew by 167%, from R 1.98 billion to R5.29 billion,  with a peak employment figure of 21,190 in the sector, clawing back jobs to a level last seen in 2007 (the dti, 2018). Read more about these and other developments in the IPAP 2018/19-2020/21, available at www.thedti.gov.za.

Additionally, the revised Automotive Production and Development Programme (APDP) and Automotive Investment Scheme (AIS) are incentives to the automotive sector. This supports the demand for leather.

A previous intervention was the Communal Hides Commercialisation Pilot Project (IPAP 2015/16 – 2017/18).

Associations involved

  • The Skin, Hide and Leather Council (SHALC) is the legal owner of the Genuine Leather Mark, applied by manufacturers and retailers in South Africa to distinguish genuine leathers from inferior imitations. Contact SHALC by emailing Ernest Heunis at ernest [at] leatherite.co.za.
  • The South African Meat Industry Company (SAMIC) does independent hides and skins audits on behalf of DAFF for export purposes at abattoirs, intermediate stores and harbours. Visit www.samic.co.za.
  • Both SHALC and SAMIC are affiliates of the Red Meat Industry Forum (see www.redmeatsa.co.za).
  • SA Footwear and Leather Export Council (SAFLEC) Tel: 031 266 1472/3 www.saflec.co.za SAFLEC represents exporters of footwear and leather products.
  • SA Footwear and Leather Industries Association Tel: 0800 723 542 www.saflia.co.za
  • National Ostrich Processors Association (NOPSA) Tel: 044 272 3336 www.nopsa.com
  • Exotic Leather SA Tel: 083 680 0425 http://elsa.org.za
  • National Union of Leather and Allied Workers (NULAW) Tel: 031 206 0105
  • Southern African Clothing and Textile Workers Union (SACTWU) Tel: 031 301 1351 / 021 447 4570 www.sactwu.org.za

Training and Research

Companies involved

For a list of SAFLEC companies (specifically footwear), visit www.saflec.co.za. The IPAP 2016/17- 2017/18 document, available at www.thedti.gov.za, lists the names of 26 leather and footwear factories which have opened since 2014/15. Several tanning machinery suppliers are listed under the “Links” option at www.tanschool.co.za.

Websites and publications

Visit the websites listed earlier in this chapter. The ISTT website www.tanschool.co.za, for example, is a must-read for anybody in the leather industry. Its menu options include a list of the chemicals used to make leather, provides a dictionary of terminology, lists leather magazines and provides a list of related websites. Links to international bodies, websites as well as details of UK and USA Tanning publications may be found.

  • Find the latest annual A Profile of the South African hides, skins and leather market value chain on the Directorate Marketing web pages at www.daff.gov.za.
  • Find details of the footwear and leather trade magazines at www.svmag.co.za.
  • www.leathercouncil.org – the International Council of Tanners website, a “definitive” international website.
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