The pandemic damages
From the beginning of the Covid pandemic the losses in the leather trade sector are significant. According The International Council of Tanners’s data (ICT) in 2020 the total exports of leather and treated leather worldwide are estimated at $14.42 billion, a decrease of 26.1% compared to 2019. In 2021, the figures show that the sector is starting to recover: globally, trade is at value of $18.79 billion, which is a decrease of 4% compared to 2019.
Dr. Kerry Senior, a secretary of the ICT commented that the lockdowns in different countries has increased the price of the raw materials. One of the reasons is the significant demand decrease of meat and as a result the number of the slaughterhouses is decreasing. "In addition, there was reduced demand for leather in a number of sectors, such as automotive and aviation, which were badly affected," he adds.
Disrupted supply chains are also a problem for the industry. Container costs have increased significantly, from $2,000 per container to $20,000. “In China, fur production has been hit hard by repeated lockdowns. The country is as the largest importer of raw materials as also the largest exporter of leather and processed goods and this caused major problems at the markets and businesses in the rest of the world“, Senior explains. “Covid, the global economic difficulties and the impact of the war in Ukraine continue to contribute for the diminished demand and the problems with the delivery chains“, Kerry Senior adds.
The future of the leather trade
One of the biggest challenges that the industry meets is people’s mindset. “The leather sector has been under enormous pressure in recent years due to concerns about animal welfare, the use of chemicals and so on. This has led some customers to look for alternative materials," explains Dr Kerry Senior. However, he is adamant that leather remains the preferred material nonetheless. Disrupted supply chains and demands for sustainability make the value of leather obvious. According to Senior, the industry is constantly moving towards greater transparency and better processes, including ensuring energy and water efficiency and chemical substitution. He adds that what would give consumers more confidence to choose leather is a better understanding of the origin of the raw materials. Namely: that hides are a secondary product of the meat sector and do not stimulate livestock farming, which leads to deforestation. "Additionally, long-lasting, repairable and ultimately biodegradable products are ideal for consumers looking to reduce their carbon footprint," explains Senior. He believes that the leather industry will provide more and more transparency on production and supply chains. Kerry Senoir is adamant: "Leather is here to stay".
The industry leaders
The data show that Brazil, the United States and Italy are the world leaders in the production of raw and partially processed leather. Italy, Brazil and China are leaders in the finished leather market. The leading countries for leather goods, except for shoes, are China, France and Italy. According to data from the World Trade Organization for 2020, Bulgaria ranks 12th in the world in terms of exports of natural leather clothing with a market share of 0.2% of total world exports, equal to $8.3 billion.
The condition of the leather industry in Bulgaria
NSI data show that in 2019, our country exported skins, other than fur, worth a little over BGN 32.6 million. In 2020 and 2021, the reported losses are about BGN 10 million. But the pandemic is only an excuse, not a reason why our country does not have a strong leather industry. "We had the largest and most modern leather factory in Europe in Gabrovo, producing upholstery for BMW and Mercedes. They privatized it, the machines went to Turkey, and the region ended its livelihood. The same thing happened with the base in Sevlievo, Lovech and Ruse. BKI - Leather factory in the capital and it was destroyed and looted. These were the Perun and Pirin brands, which they exported all over the world, but no one even remembers them anymore," explained leatherwear designer Joro Pentagram. According to him, Turkey has shown foresight and commercial acumen by buying the machines from the country. “They just took advantage and did it slowly and methodically. First the machines and equipment, then they bought the animals outright, as they are in herds. We gave them cows, calves and lambs, they came back to us as wool, meat and leather," says the designer.
Turkey is undoubtedly the leader for Europe and the region in leather production, along with Italy and Greece, he commented. "In Italy, many factories were bought by the Chinese, but this did not change the quality, only the management changed. The Chinese know very well that a label that says made in Italy or Europe is more profitable than made in China," adds Joro Pentagram.
According to the designer, people's interest in leather clothing will never stop. “The point is, we and this industry have lost it. I am the last knight in Bulgarian fashion, who still remained on the scene, but no one appeared after me, I think there will be none. Importing is easier than creating patterns and fashion yourself," he explains. Joro Pentagram says that there is almost no country for which he did not send custom models of leather garments. “This means that regardless of geographic region, fashion and clothing conscious people know the power of a handmade leather jacket or dress. These models are practically eternal and for some, it's even a kind of investment," adds the designer.
According to his observations, the pandemic has taught consumers pragmatism. "This inevitably affected art and culture, but we have had such periods in the past as well." Life is stronger than all fear, disease and recessions. We all need something beautiful to happen to us. Be it cinema, exhibitions, reviews, concerts and everything that brings back the optimism that we will deal with this too", says Joro Pentagram.
The trade in valuable furs
"Animals with valuable furs" are raised solely for the purpose of producing furs and are not used for human consumption. In Europe, there are already more than 20 countries that have banned or phased out fur farms. "Not only animal protection organizations but also European institutions recognize that fur farms cannot meet the behavioral needs of animals, as well as that it is impossible to observe the basic principles of humane treatment of animals," says Petya Altimirska from the association "Say" (Campaign and activism for animals in industry). She adds that all over the world, fur farms have the same characteristics - large numbers of animals living horrific lives - crammed into cramped cages, killed in brutal ways. Petya Altimirska explains that the leather industry, including the valuable ones, ranks among the most dangerous for people and the most polluting of the environment, because of the large amount of toxic chemicals that are used. Fur farms are also dangerous to biodiversity because of the constant release of alien, invasive species, as well as the ecological damage they cause. On June 17 of this year, the risks to biodiversity caused the then Minister of Environment and Water Borislav Sandov to issue an order banning the import and breeding of the American mink species on the territory of the Republic of Bulgaria. There is also evidence of infectious and zoonotic diseases originating from fur farms. "This was also reinforced during the pandemic, when it turned out that minks could transfer the virus to humans. Over 470 fur farms were infected, and over 17 million animals were killed because of the risk to public health," recalls Altimirska.
Risks and profits of the valuable furs
"Against the background of all negative risks which hide behind that industry, the economy benefits of it would seem insignificant", says categorically Petya Altimirska. She adds that whatever analyses would have been done on the adverse economic impact, it would be difficult to predict all the costs of dealing with the consequences of those impacts. "Specifically for Bulgaria, there are several interesting facts from the economic analysis of the sector, which are indicative," she shares. "The financial statements of the companies that operate the fur farms show that they have declared minimal income, made no profit, as well as income to the state budget in the form of profit tax and/or dividend tax", Petya Altimirska explains.
Keeping up with fashion
Unnecessary, archaic and unsustainable – this is how the valuable leather industry is perceived now. "The trend in ethical fashion is getting stronger and even the most luxurious brands have already openly spoken out against killing animals for fashion," believes Altimirska. According to her, the moral compass of society is changing. "In Bulgaria, according to the latest survey from 2021, 81.5% of Bulgarians do not accept the killing of an animal for this purpose".
The designer Joro Pentagram is categorical - "I have always been an extreme opponent and I have always supported initiatives to ban the use of valuable leather. I feel the same way about hunting - to kill a beautiful animal just to take a picture next to its carcass is sacrilege." PR expert and fashion blogger Vanina Khandzhiyska comments that the difference between the use of valuable skins and secondary product skins is mainly made by the more interested consumers. She is of the opinion that there is still much to be said about the difference and specificity between the two industries.
The large world brands started to gradually abandon leather in their collections. "Today, one cannot talk about the luxury industry without introducing the concept of sustainability. Brands are aware of this and are looking for ways to continue to grow and do business in a more sustainable way. However, if this is just a marketing approach, consumers will inevitably find out and back away," she added.
According to data of 2019 Bulgaria has exported leather, different than furs, worth a little over BGN 32.6 million. In 2020 and 2021, reported losses in the sector were BGN 10 million.