The Small Industries Development Corporation (SIDCO) and the Council for Leather Exports (CLE) are in talks to develop a large leather tanning cluster in Tamil Nadu. The cluster would resemble ‘plug-in-factories’ similar to what exits in China.
At a proposed investment of Rs 160 crore, the project aims to boost leather exports from the region, which Assocham predicts could grow 13% to $5.4bn by 2014. The tanning cluster could come up in Tiruvannamali, about 130 km from Chennai.
Nearly 90-acres has been acquired for the project, the plans for which are not yet finalized, CLE Regional Chairman (South), P.R. Aqeel Ahmed said. He expects work on the project to start soon, according to a Hindu Business Line (HBL) report. The Union Government could fund the project to the extent of 80%, Ahmed said.
India's leather export are approximately $1732.04 m, a second HBL article reported. Footwear is the largest contributor with a 45.05% share. India has a 3.5% share in global leather trade with Germany, UK and Italy being the largest markets for Indian leather exports. These countries have a share of 14.34%, 12.8% and 11.52% respectively.
The government has several initiatives for the development of the leather SME sector. With over 300 leather production units from around 200 tanneries, Tamil Nadu is looking to expand leather clusters with the help of the Rs. 160-crore project. Government initiatives, like the co-ordinated purchase of dyes and chemicals, supported by EDI (Entrepreneurship Development of India) helped bring down costs to to Rs. 250-260/kg from the initial Rs. 400/kg. This model could be being attempted in the Ranipet, Vaniyambadi and Ambur clusters, said a third article published in the HBL.