BEIJING:
Pakistan and China are entering into partnerships and joint ventures in the leather processing and manufacturing industry, which is expected to propel the local sector to new heights.
These collaborative projects include the establishment of manufacturing plants, tanneries and research and development (R&D) centers dedicated to adopting innovative practices in the manufacture of leather products, according to Khalid Waleed, Advisor, Pakistan Tanners’ Association.
In June, the Guangdong Shoe Manufacturers Association visited Pakistan to explore the possibility of relocating their operations to the South Asian nation. These companies are ready to invest between 5 and 8 billion dollars in the local industry.
Pakistan’s leather industry, a critical sector that not only meets the needs of the domestic market but is also increasingly looking for export avenues, and the second most dynamic sector after textiles, has recently faced challenges while competing on the global stage.
Pakistan is the only country in the region to have seen a decline in leather exports, indicating the growing challenges facing the industry, according to news reports.
In fiscal year 2022-23, Pakistan’s leather exports fell by 7% to $887 million compared to $953 million in the previous year. The downturn was mainly due to an 18% decline in exports of other leather products and an 11% decline in leather garment shipments, as observed by the Pakistan Leather Garment Manufacturers and Exporters Association.
China, the world’s leading producer and exporter of leather and leather products, manufactures over 4 billion square feet of leather annually. In 2023, China exported leather, fur and related products worth $96.98 billion, according to the China Leather Industry Association.
The synergy between China’s manufacturing capabilities and Pakistan’s advantages, including high-quality leather and lower labor costs, presents significant potential for cooperation. The Pakistani market also represents high consumer demand for fashionable footwear and handbags.
Moreover, the preferential import policies for these products create an enabling environment for joint ventures under CPEC.
These joint projects are set to boost the growth of leather-related small and medium enterprises (SMEs) in Pakistan by providing opportunities for modernization and technological upgrades through Chinese investment and support.
Improved infrastructure and trade routes under CPEC offer Pakistani leather products improved access to the vast Chinese market.
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