A plan to beat diseases

The Russian Tannery Association (RTU) and the Ministry of Agriculture of this country have agreed to work together in a six month federal programme aimed at improving the quality of hides and leather. Some of the most important measures focused on the prevention of bovine hypodermosis. This disease is triggered by tick larvae penetrating the animals skin causing weight loss and great discomfort for the cattle. In general, tanners pay 30% to 50% for such hides.

China and European Union sign joint agreement

China and the EU signed a customs tariff agreement and launched new trade talks during the visit of the Chinese Prime Minister Wen Jibao to the EU headquarters in Brussels. Wen had talks with EU Commission President Romano Prodi in an attempt to analyze the strengthening of bilateral relations. A document of Mutual Understanding is due to be signed so as to formalize talks on trade and competition, with fresh talks due to be launched on the question of textiles. Leather Press is anxious to see if this fresh dialogue will open talks in footwear imports to the EU.
Transport

There is concern in the market due to news from various shipping lines related to the European Freight Association (EFA) due to fuel premiums being levied, on the back of the recent rise in the international crue oil price. Currently, negotiations are taking place between companies affested and maritime transport companies. There are also rumours of increased prices for road transport circulating.
   
Brazil increases shoe exports

Brazilian shoe exports rose by 15% in the first five months of 2004, compared to the same period 2003. From January to May 2004, sales reached US$707 million compared to the previous US$616 million. Sales in May 2004 registered US$129 million, rising by 9% compared to May 2003, when sales were US$129 million.
Brazilian footwear on the way to Chile

The number of shipments of Brazilian footwear to Chile keeps on increasing. According to Abicalcados, the Brazilian Footwear Association, sales to Chile increased by 26% from 2002 to 2003, or by US$20.1 million to US$25.4 million. So far this year, the accumulated total up to end April is US$13.2 million, and in order to consolidate this performance the 6th Showroom of Brazilian Footwear will be held in the Chilean capital Santiago from 15th to 17th July. Some 50 manufacturers will take part with the support of “Brazilian Footwear”, a programme run by Abicalcados with financial support from the Export Promotion Agency of Brazil (APEX) and the organization of the Francal fair group.
 
SATRA courses in China

The British Shoe Technology Centre, SATRA, will give a series of courses on footwear technology and training courses in its new offices in the Chinese city of Dongguan. From 21st June to 2nd July, various experts will be in charge of 5 modules of the SAFT programme – a SATRA accredited shoe technology course. Chinese technicians will study and prepare for exams on finishing, materials and construction, laboratory test procedures, production design, performance and risk assessment. Interest in these courses in the Far East started to grow when SATRA presented a similar seminar just before the March 2004 edition of the Asia Pacific Leather Fair.
Bangladeash asks for state aid

The Bangladeshi Association of Finished Leather, Leather Goods and Footwear (BFLLFEA) has asked the government to suspend some customs duties and taxes so as to create export incentives. In its proposal for 2004 – 2005, the BFLLFEA stated that if the government really wanted to help companies become more competitive, then the customs duty levied on the import of shoe components should be reduced to 2.5%, instead of the current 25%. They also requested the suspension of the taxes on the import of raw materials and chemicals for the leather industry, which tend to neutralize any profits gained from exports, and at the same time establish a 15% export incentive for finished leather as well as abolish VAT on footwear exports.
MEXICO: import controls

The Mexican Customs Authorities are carrying out operations in León with the objective of identifying and controlling the origin of merchandise in the shops. In this way they aim to discourage the smuggling of footwear and other consumer goods. José Antonio Salim Alle, President of the Footwear Chamber of Guanajuato State is very satisfied with these customs operations. Salim stated that even though the preliminary results have not been spectacular, these operations are the start of more extensive ones to combat the trade in goods that had entered the country illegally.
Uganda to increase customs duties on hide exports

After a campaign by the tanning sector, the Ugandan government has accepted the proposal to increase export tariffs by 30% on hide exports and completely ban such exports for three years. The Association of Leather Industries of East and Southern Africa (ESALIA) had approved a resolution asking the Ugandan authorities to protect the local tanning industry.


Reorganization at Nike

Eunan McLaughlin, current Vice President of Nike for the Asian region will be the new Vice President of Nike Europe, Middle East and Africa. Fritz van Paasche who formerly occupied this position is retiring from the company for personal reasons. McLaughlin joined the company in 1998 and was in charge of the Asian region for seven years.
Director appointed at GBMI

Global Brand Marketing Inc., owner of Pony Internacional and Dry-shoD, and concessionary for the Diesel, XOXO, Nautica and Mekka brands, has appointed Peter Benjamin as the company’s director of operations. Benjamin will supervise the operations strategy of several commercial divisions of GBMI as well as being responsible for development.
Burton revamps its strategy

The Burton Group has just announced the reorganization of the sales direction of its five main brands: Burton, R.E.D., Anon, Gravis and Analog. From now on, each sales director will report directly to his specific Managing Director, thus eliminating the post of Vice President of global sales, occupied by Amy Buckalter. The new structure is designed to allow Burton to benefit directly from its many initiatives and to reinforce its position in the market.
Growth at VF

The VF Group which is responsible for brands such as Wrangler, Lee and Jan Sport amongst others increased its sales by 14% compared to the first quarter of 2003, reaching the figure of US$125 million


New Vice President for Hooker Furniture

The manufacturer and upholstery importer Hooker Furniture has designated Kenneth Williams as its Marketing Vice President. He will work in the marketing of household furniture collections and will be looking for opportunities for commercializing these products in retail galleries.
Williams will also be responsible for imports and will report directly to Mike Spence, Senior Vice President for imports.
Focus upon upholstery leather

The automotive and furniture industries in China are expected to show strong growth in the medium to long term, as more production in these sectors moves to China. This country is starting from a low base as demand for specialized upholstery leather continues to grow at the same pace as automobile manufacturing and furniture making. In order to take advantage of this trend, the All China Leather Exhibition (ACLE) will include a special upholstery leathers section in the next edition due to take place in Shanghai from 1s - 3rd September. Tanneries producing upholstery leather, and wishing to penetrate the Chinese market, go to www.aplf.com for more details.
Resignation at Nicoletti

After 10 years at the Italian upholstery manufacturer Nicoletti, Mauro Bracciale resigned from his post as US sales manager. Tiziana Catalano will take over Bracciale’s responsibilities but will continue to report to Eustachio Nicolletti, the firm’s administrative director.
Upholstery in first place at Culp

Thanks to the good results obtained from its upholstery division, Culp Inc. registered an 18.8% increase in its gross profit margins in the three months leading up to 1st February 2004. This was the best result achieved by the company in the last 16 years.
New line of upholstery

Alexvale Furniture has restructured its upholstery lines to reflect the emphasis it will place on mid range products after merging with Kincaid Furniture. The collection will be named Alexvale by Kincaid and the price range will oscillate between US$699 and US$899.
Labour laws: Gap discovers breaches

In a surprising press release at the beginning of May, Gap revealed that its global production network for manufacturing low cost clothing in its chain stores Gap, Old Navy and Banana Republic uses cheap manual labour and dangerous working conditions. The company stated that it discovered such violations after thousands of inspections carried out in 2003 in more than 3000 factories worldwide. These violations include improper storage of flammable materials, machines without safety guards and deficient first aid equipment and fire prevention measures. Some executives of the company had previously declared that the factories located in more than 50 countries were operating in conformity with corporate ethical standards and that workers were justly treated. They have now assured that the company revoked contracts with 136 factories in 2003 in a response to serious violations including the use of child labour.


BACK ISSUES
    
    

Fashion First Europe. New launch by APLF

Aiming to promote a more competitive price range of footwear, leather goods and fashion accessories, the new fair lauched by APLF “Fashion First Europe” is designed to offer a wider range of quality and choice to European buyers and distributors, by attracting exhibitors from Asia, Latin America and Eastern Europe. The new event will be held twice a year in Brussels Expo, with the first edition taking place from 31st January – 1st February 2005. Michael Duck, Director of APLF, explained, "Following the progressive shift of manufacturing centres to Asia and South America's resurgence as a highly competitive supplier, we felt compelled to respond to the requirements of European distributors and retailers by creating a showcase of competitively priced goods, in the centre of the European Union". More details: www.fashion1st.com

Technical training in India

The Footwear Design & Development Institute (FDDI) is the main training centre for human resources, consultancy and research and development for the powerful Indian shoe industry. Leather Press had the opportunity to converse with V.B. Parvatikar, technical director of this institute, to learn more about its aims and functions.
Parvatikar is an industrial engineer with 36 years experience in the footwear industry at the highest levels both in his native India and in Europe. Currently, he is a lecturer and company advisor.
As coordinator of various programmes and services within FDDI, Parvatikar explained that the original purpose for creating the institute was to propel the Indian footwear industry to reach international production standards.

After ten years, FDDI has gained international recognition and generates highly trained human resources for some of the most famous international footwear manufacturers, such as Reebok, Adidas and Nike. In addition, added Parvatikar, “FDDI was the first training institute to gain ISO 9001 and ISO14001 certificates, as well as many others”.
The curriculum offers students both theoretical and practical training, 30% and 70% respectively. In this respect, the institute has a laboratory equipped with the latest technology, a design centre and a pilot plant where students can see their products “come off the production line”. As well as training technicians, FDDI offers services to companies in the sector in India itself, Sri Lanka, Nepal, Bangladesh, Pakistan etc. Amongst the institute’s main clients there are famous names such as Liberty, Adidas, Reebok, Drish, Action, Lotus Bawa, Dow Chemicals International Ltd., Bata, Nike, Mirza Shoes and Ram Exports.
FDDI also publishes a quarterly magazine which includes a summary of the main news in the international footwear industry as well as a web site which can be consulted to learn more about the institute’s programmes: www.fddiindia.com




New chief at Bayer

Axel Westerhaus Hill take over as head of Bayer’s chemical products unit (Lanxess) from 1st June of this year. Westerhaus, who already works in the company, succeeds Rudolf Hanko.

Expansion plans

Liberty Shoes, the number 1 footwear company in India and number 5 in the world is planning to increase its industrial capacity. This long term plan includes the construction of a new shoe factory either in the city of Karnataka or in Andhra Pradesh, as well as the purchase of the Tamil Nadu tannery. Executive Director, Adarsh Gupta confirmed that Liberty Shoes is also in negotiations with Hindustan Lever, with a view to running this company’s business. Adarsh Gupta also stated that a new plant with a 5,000 pair per day production capacity of leather shoes will come on stream in mid June in Uttaranchal.

Atlas to expand Newark plant

The North American chemical company, Atlas Refinery will expand its plant operations in Newark, New Jersey. This investment aims to build a pilot plant equipped with the latest technology and it will be located next to a production plant, administrative offices and laboratories. The project should be ready by the end of the year and is part of Atlas’ restructuring plans. This plan includes the introduction of a series of high performance chemical products, as well as a new range of products for airline upholstery applications.

Gucci redefines its strategy

Shortly alter buying up Gucci’s shares, Pinault Printemps Redoute (PPP) has revealed some of its plans. From now on the Gucci brand name will only be seen on leather goods and footwear. The company president, Serge Weinberg explained that Gucci’s identity was bound up with these products which account for 70% of its production. Branded items increased by several percentage points in the first four months of the year. The company is developing new products lines in the jewelry sector and opening new outlets in China, where sales growth was excellent and the number of stores doubled in 2003.