Furniture: We need to export, and we have to be more competitive

The reality that the furniture manufacturing sector was negatively affected by the economic downturn could be seen in the drop of domestic leather sales.

Initially, there was movement from high-end leathers to corrected grain leathers purely from a cost point of view. However, these sales reduced dramatically as the general consumer had to tighten his/her belt.

Corrected leathers are not cheap to produce, but are manufactured on low value raw material. Margins are extremely low and these leathers are manufactured only to reduce the low grade stock holdings. Massive volumes are being sold on the international market at low or even no profits. This trend is very clear by the actions of big tannery groups like JBS and Mastrotto.

The last 6 months the demand for more natural leathers has increased. The supply of good and clean grade wet blue hides is limited and customers are very demanding when it comes to the selection of the grains.

We constantly find new entrants into the market, especially form international tanneries. Local leather manufacturers are subject to BEE requirements which is not the case with imported leathers.

It is very important to constantly improve the industry’s competitiveness. This will create the opportunity to be able to produce leathers of the right quality and effects that can be sold on the international stage.

 

This report was presented at the Skin, Hide & Leather Council (SHALC) AGM, at the Intercontinental Hotel, OR Tambo Airport, May 26