A new chapter

The Pakistan Tanners’ Association believes a new partnership with the China Leather Industry Association can help it increase exports by almost six times between now and 2030.

The main leather industry bodies for China and Pakistan formally signed a new memorandum of understanding at the 2024 All China Leather Exhibition in Shanghai in September. The chairman of the China Leather Industry Association (#CLIA), Li Yuzhong, and his counterpart at the Pakistan Tanners’ Association (#PTA), Muhammad Mehr Ali, were on hand to formalise the links between the two countries’ leather sectors. “What we want,” Mr Li says of this development, “is to create a better future together.”

What happened in Shanghai was a follow-up to events that took place earlier in 2024. The two governments reached a wider collaboration agreement and, from the outset, leather was one of 13 industries that they highlighted as being of immense interest. As a result the CLIA chairman led a delegation of business leaders to Pakistan in August and business leaders from Pakistan are planning a return visit to China, with meetings in Guangzhou, before the end of the autumn.

Close ties

More broadly, Mr Li says that China’s leather industry wants to enable new opportunities and to construct open, fair platforms for conducting business with international partners. He insists this will help leather manufacturers in China form close ties with partners in countries such as Pakistan, constructing “close communities built on mutually beneficial co-operation”. As this language suggests, the CLIA chairman makes it clear that his organisation is being guided in this strategy by China’s Belt and Road Initiative (BRI).

It is almost ten years now since China’s central government first published its goals for BRI. These include strengthening ties with partner countries, as CLIA is doing here, but also to increase China’s access to raw materials and other resources, and to channel excess production capacity in China to other parts of the world. Since then, the initiative has generated criticism as well as plaudits, but Li Yuzhong’s belief remains strong that building lasting links with partners such as the PTA is the best way to address the challenges the leather industry faces today.

“The industry is at a critical stage of change,” the CLIA chairman continues. “We have to meet new market demands. To do this, we have to take a more pragmatic approach and be willing to work with colleagues across the world.” He says CLIA is “full of confidence and anticipation” that developments such as the new memorandum of understanding with Pakistan can help “write a new chapter for the industry”.

A good partner

For his part, Muhammad Mehr Ali is equally confident that PTA will be a good partner. He describes Pakistan as among the places to have engaged most with multi-stakeholder body the Leather Working Group (LWG). “We have 55 LWG-rated tanneries,” he explains, “and 93% of all the finished leather that Pakistan produces is from LWG tanneries.”

In addition, he mentions that 33% of the electricity in use in leather production in Pakistan is from renewable sources, often from solar panels that the leather manufacturers have installed themselves. The country’s tanners are recycling 12% of the solid waste their production operations generate at the moment, but Mr Mehr Ali says a plan is in place to increase this to 20% in 2025. “We are finding ways of converting waste, even things like shaving dust, into eco-friendly products now,” the PTA chairman says. “And the government of Pakistan is supporting these initiatives often with matching grants or funding initiatives that we call green loans.”

Another factor in Pakistan’s favour, he explains, is the presence there of four universities that offer degree courses in leather technology and production. According to Muhammad Mehr Ali, there are only 13 universities across the entire world offering these courses now.

His assessment is that Pakistan can gain from the new memorandum of understanding with China economically and environmentally. He says more than 70 manufacturers in China are considering moving some of their production to Pakistan, attracted by the knowledge and expertise of leather manufacturers there and by incentives that the government in Islamabad is promising. These include paying back 30% of any investment Chinese companies make in the partner country.

“We will benefit because the leather industry in Pakistan will make progress in sustainability, traceability and innovation,” the PTA chairman adds. “We will also benefit economically. The annual value of our leather exports is $837 million at the moment. We are aiming to take this to $5 billion by 2030, which is almost six times more.”

Guest opinion

Pakistan’s consul general in Shanghai, Shazhad Ahmad Khan, a guest at the ceremony at ACLE, says a strong partnership between the leather industries of the two countries is important. He explains: “The leather sector is one of Pakistan’s topmost export-focused industries and we have a long history of collaboration with China. I congratulate the two industry associations for opening up this new avenue and I hope it will take us a long way.”

Li Yuzhong says China’s interest in international collaboration stretches beyond Pakistan, with investments in Africa, North America and South America, as well as in other parts of Asia. “We have in place the organisation we need to put our central vision into practice,” he says. “We want this to include technology transfers and a genuine east-west knowledge share. We have launched training workshops in Ethiopia and now we will bring this co-operation to Pakistan too.”

He says China is willing to extend “this invitation” to all international players. He insists that the industry worldwide “shares the same vision, the same dream”.