Feb 15-17, 2009

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Report by: Mr. Ali Ahmed Khan, Executive Director, CLE

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Introduction

Mission Mode Scheme is one of the approved sub-schemes of Indian Leather Development Programme (ILDP), and under this scheme, promotional activities in the foreign countries are undertaken to promote the Indian leather industry, create awareness about India’s manufacturing capabilities and growth potential so as to motivate the foreign entrepreneurs to have business, joint venture collaborations with India. As per the approved Action Plan for the year 2008-09, the Council organized a Road Show in United Kingdom during Feb 15-17, 2009. The Road Show was held coinciding with one of the British leather fair Event namely MODA Footwear and MODA Accessories which took place at Birmingham during Feb 15-17, 2009.

Indo-UK Trade Scenario in Leather Sector

UK is sixth largest importer of leather and leather product in the world.

Footwear alone accounts for a major share of 81% in UK total leather sector Import. This is followed by

• leather goods (12%), and
• leather garments (3%).
• UK imports totaled US $ 6.25 billion for 2006.
• U K holds a share of 5.37% in the global leather import trade of US $ 116 billion.

As far as India’s exports are concerned, UK is the 3rd largest market for India with a share of 12% in India’s total export from leather sector. India’s share in the UK import of leather and leather products varies between 5.75% and 6%. India’s export to UK is worth US $ 414.32 million during 2007-08, growing at a CAGR of 11.44% over the past 5 years. Thus, UK is having tremendous scope and potential to increase the trade collaborations.

Road Show programme

In view of the opportunities presented, there is a need for executing promotional activities in the UK from time to time at frequent interval in the trade fair Events and other happening of the leather industry so as to make India’s presence felt in such Events. Also considering the fact that the production of leather products has moved / moving to low cost economies – India, China and South East Asia etc, the necessity has arisen to aggressively promote India’s manufacturing competitiveness and design development capabilities by holding interaction meetings with the Industry Associations so as to share the developments of the respective industries and channel the strategies towards the desired direction.

In line with the above strategy specific to the UK market, the Indian Delegation had held discussions with members of the Leather Industry Associations, MODA Trade Fair management, SATRA Technical Institute, University of Northampton, UK Trade & Investment etc. Besides, an exclusive meeting was also held with High Commission of India to review and firm up the strategies for promoting the business and joint venture collaborations between two countries.

The Indian Delegation comprised of Mrs. Farida M Naik, Under Secretary, Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce & Industry, Mr. V V Narayanan, Consul (Hoc & Com), Consul General of India, Birmingham and Mr. Ali Ahmed Khan, Executive Director, Council for Leather Exports.

Interaction with ITE Moda Footwear Limited, organizers of MODA Trade Fair

The delegation visited the MODA Exhibition on Feb 15, 2009 at Birmingham. Delegation had a meeting with the management of ITE Moda Footwear Ltd Mr. Sean O’connor, Event Manager for Moda Footwear. The meeting began with a briefing on the Moda followed by possibilities for Indian participation. Mr. Sean O’Connor informed that the fair is the largest gathering of footwear brands in the UK, and all the important brands in the UK footwear industry take part in this exposition to present their collections and designs.

Mr. Ali Ahmed Khan informed that the Council for the past many years has not been attending this Event. However, it is now exploring the possibility of taking part in the Moda Exhibition. Mr. Sean stated that the Moda Event continuous to be UK’s largest and most comprehensive fashion Event for the British Leather Industry, and as such it would be appropriate for CLE to be present in this Event. As regards cost of participation, he informed that a 25 square meter space cost about ₤ 4850 +15% VAT (about Rs.4.15 Lakh), and this is more or less similar to the price in other European fairs. Considering that the profile of the fair is basically for branded fashionable products, it would be a better proposition for India to present the collections of major brands and arrange display in a common country stand. For this initiative, Moda Footwear assured its cooperation and best support to the Council.

Mrs. Farida M Naik enquired about the interest of the participants in the fair regarding joint venture, investment collaboration and such long term tie ups with India. It was informed that many of the British Firms are already into long term partnership with companies in India, China and other South East Asian Countries and also East European companies. However, these British companies should continue to be targeted as they may now find India to be more attractive than other countries.

Indian Delegation after this meeting visited the Exhibition and met some of the Exhibitors and had very brief interactions. Information Kit was given to the MODA for circulation in the Fair. The overall assessment was that Birmingham being the important leather centre of UK, India may have a visible presence in the Fair for market promotion and Road Show promotional activities, and this Event may serve as a platform to establish contacts with the British companies.

BETA International 2009 – meeting with BETA

UK equestrian market (excluding racing) is worth around ₤ 4.2 billion per year, and BETA International is known as the gateway to access the growing industry. UK imported Harness & Saddlery items worth about US $ 62.04 million during 2006. This constitutes 1% of the total leather & leather product imports of UK. As far as India is concerned, export of Harness & Saddlery items to UK was US $ 12.54 million and this constitute 20% of India’s total export. India’s share in UK’s total import is also about 20%. Thus, UK is very important market for India’s harness & saddlery industry. Therefore, considering the need for devising appropriate strategies for promoting collaborations in the harness & saddlery segment, the Indian Delegation had a meeting with British Equestrian Trade Association (BETA) on Feb 16, 2009. The meeting was attended by Ms. Claire Williams, Executive Director and Secretary of BETA.

The BETA welcomed the Indian Delegation and highlighted the level of cooperation and support received from CLE towards effectively organizing the India’s participation in the BETA International Fair for the past several years and this platform was truly instrumental in increasing the collaborations between India and UK in the Equestrian products. BETA further informed that the main task of the BETA is to serve the best interests of the equestrian industry and its members. BETA has come to be recognized and accepted as the official body for the equestrian manufacturing, wholesale and retail trade by the Government and leading riding organizations. Towards this, BETA has undertaken many initiatives such as encouraging professionalism throughout the trade, establishing safety standards, providing training courses and information leaflets, commissioning in-depth research etc. BETA currently has over 600 members covering retailers, manufacturers, importers, distributors, agents, dealers, and a wide range of companies offering services to the industry.

The Indian delegation informed that the harness & saddlery industry is concentrated in Kanpur and almost 95% of the production and export takes place from Kanpur. While acknowledging the effective role played by the BETA for fostering the trade in the harness & saddlery items, Indian Delegation informed BETA that opportunities are now increased manifold to further work towards joint venture collaborations between India and British companies. The industry today has very much well developed with sophisticated machinery, production technology, and design development, etc and well equipped to produce world class highest standard products suitable to the British Industry. The technology competencies and expertise can be shared for mutual benefit in the form of strategic collaborations. BETA was of the view that BETA International Fair would continue to be the platform to facilitate joint venture tie-ups, and towards this, BETA expressed its fullest cooperation to the CLE.

Meeting with British Footwear Association (BFA)

The Indian delegation had an exclusive meeting with British Footwear Association on Feb 16, 2009 on the sideline of the MODA Footwear Exhibition. The meeting was attended by Mr. Richard Kottler, Chief Executive Officer of the BFA.

Mr. Richard Kottler welcomed the Indian Delegation and introduced the BFA as a trade association representing British footwear manufacturers and British based footwear brands. Britain is home to some of the world’s leading footwear brands and the most innovative designers. The industry has a £2.3 billion annual turnover at ex-factory prices and exports over 90% of its production around the world. Every year in the UK, almost £6 billion worth of footwear is sold to consumers and around £0.50 billion is exported around the world. The BFA offers various services to the members such as marketing, networking, advice on issues ranging from exporting, importing and design rights to labeling rules and ethical trading codes etc. BFA offer representation at key overseas Trade Fairs. Mr. Richard kottler further informed that Britain’s shoemakers are particularly proud of their strengths in the areas of high quality dressy footwear for men and women, directional fashion, casual comfort brands and fashionable high-volume value sourcing. Mr. Richard Kottler summed up the BFA as a one-stop-shop for information on anything related to running a footwear business in UK, whether manufacturing or designing, importing or exporting.

In its submission, the Indian Delegation informed that the cooperation and support between CLE and BFA had been continuing for the past several years, and the Council had received good support from BFA. In order to create awareness of the Indian leather industry, the Council earlier organized a Road Show in Northampton during March 2007 and this Event was very successful in the context of BFA and several members of BFA participating. As an endorsement of the opportunities, a MOU was entered into between CLE and BFA during August 2007. The area of cooperation envisaged in the MOU pertains to increasing the trade and investment, development of shoe industry in both the countries in the form of devising strategies and organizing BSM, Trade Fair participation and exchange of Leather Delegations etc. As part of the MOU working programme, the Council organized a Buyer Seller Meet in UK during Nov 2007.

Indian Delegation further informed that India has a competitive edge today compared to China especially on labour front. India’s retail market boom for consumer items footwear and leather goods and accessories should be a major attraction to the UK companies to have more collaboration with Indian companies and also to invest strategically into India.

After detailed deliberations, it was agreed as under:

• BFA will arrange to bring a Delegation of footwear companies to Indian clusters – Kanpur, Delhi, Agra, Kolkata, Chennai & Mumbai, with the objective to interact with the members, and see the production technologies and state of the art facilities created in the country.
• UK companies can take part in the Indian Fairs IILF, DILF and ILGF, and the CLE will approach the BFA with specific hospitality packages for inviting Buyers to these Fairs.
• A common stand India Information Booth may be set up once in a year in the Moda Exhibition which will project updated information on the Indian leather industry to the UK leather market by way of dissemination of attractive brochures, publications, FDI manual, CDs etc as well as displaying the product samples of select Indian companies which has branded products.
• Mr. Richard Kottler reiterated the BFA’s support and assistance to the Council in the execution of above programmes.

Meeting with SATRA Technology Centre

Indian Delegation visited SATRA Technology Centre at Kettering, Northamptonshire on Feb 16, 2009 and had a meeting with the SATRA. Mr. Richard Turner, Chief Executive, Mr. Austin Simmons, Deputy Chief Executive and Mr. Alan Drage, Head of Marketing, were present in the Meeting.

While welcoming the Delegation, Mr. Richard Turner informed that the technological cooperation between India and UK is very much need of the hour due to India emerging as one of the important production centres for leather and leather products. He briefed many functions of SATRA, including testing facilities, R & D activities. In his presentation, he stated that SATRA is the world’s leading research and technology centre of its kind and employs more than 180 scientific, technical and support staff across two sites in the UK and a China office. With more than 1500 member companies in 70 countries, SATRA prides itself on modern service delivery, coupled with traditional customer care values.

Indian Delegation mentioned that the Government of India is implementing a massive project of Indian Leather Development Programme (ILDP), and as part of this programme, technology up gradation and expansion of production capacity in Indian units have been given much importance. Added to this, there is also proposal to develop 4-5 Leather Parks in India in the next few years. All these call for need for more technical, testing, design development and research expertise. The Delegation further informed that two modern Design Complexes in Chennai and Kolkata have already been set-up and these Design Complexes have testing and Design facilities. In fact, the machinery for Chennai Design Complex was procured from SATRA. While the Chennai Centre is run by FDDI, the Kolkata Centre will be inaugurated shortly. SATRA assured that it will render utmost cooperation and collaborate with India for any technical projects whenever proposed by India. Mr. Richard Turner thanked the Indian Delegation for this interaction meeting to share the industry’s situation of both countries with reference to the technical aspects including research & development, design etc which is very fundamental for the overall growth of the leather industry. Indian Delegation was shown the various facilities of SATRA.

Meeting with University of Northampton

Indian Delegation has attended a Meeting with University of Northampton on Feb 16, 2009. The Meeting was attended by Vice Chancellor Mr. Ann Tate, Dr Mark Wilkinson, Associate Dean (Development) & Professor Kamal Bechkoum.

While welcoming the Indian Delegation, Dr Mark Wilkinson briefed about the role played by the university which has been awarded full university title and research degree awarding powers during the year 2005. The University of Northampton is a dynamic, modern university situated in the heart of England. A medium-sized University with 10,000 students and two Northampton-based campuses Park Campus, and Avenue Campus, the university offers hundreds of courses to meet all needs and interests. From foundation and undergraduate level to postgraduate, professional and doctoral qualifications, students can study traditional arts, humanities and sciences subjects, as well as more modern subjects such as entrepreneurship, product design or advertising. More than 700 international students from different countries study each year and enjoy a global reputation in many of our subject specialisms, including waste management, leather technology and fashion. Dr Mark Wilkinson has further stated that by 2010, they intend to increase student numbers by 20% and become a national model of excellence in learning. The leather continues to receive much attention of the University.

Indian Delegation informed that the HRD for leather sector is served in India by technical institutions such as CLRI, FDDI, CFTI etc, and today, the industry is in need of qualified manpower. The numbers of students coming out of the colleges are insufficient to meet the total requirement of manpower for the leather industry. India is in need of educated manpower for managerial qualities. The sizes of the companies are also increasing with the advent of times, and leather units have to be set up with huge production capacities to reap the economies of scale. There is need for more managerial personnel for the sector. In this regard, Dr Mark Wilkinson informed that the University has initiated discussions with the CLRI for a possible collaboration under which the CLRI students will also study in University of Northampton and complete the final stages of their courses. The MOU is expected to be signed shortly between the University and CLRI.

The Indian Delegation thanked the University Team for the presentation made by them, and requested the University to update the CLE of University’s intervention in India from time to time. The Delegation was taken to various facilities set up in the University.

Meeting with UK Trade and Investment (UKTI)

Indian delegation had a meeting with UK Trade Investment (UKTI) on Feb 17, 2009. Mr. Shakeel Mughal, High growth market specialist, has welcomed the Indian Delegation and briefed the role of UKTI. He informed that UK has strong ties with India and UK companies are well positioned to take advantage of the growing retail market for footwear and leather goods and accessories in India. UKTI operates through a global network with offices in British Embassies overseas, in London and Glasgow and in the 9 English regions. In Scotland, Wales and Northern Ireland the devolved administrations provide trade advice to companies, and access to UKTI’s service.

Indian Delegation mentioned in their address that there are several collaborations existing between India and UK already, but what is needed is certain amount of facilitation work to be done to make the process of joint venture formation quite easy. In this context, UKTI should facilitate both India and British companies to set up collaboration arrangements. Also, the UK Companies may set up units either on their own or enter into JV partnerships, in the Leather Parks proposed to be set up in various parts of the country.

Mr. Shakeel Mughal stated that their offices are located widespread in UK. UK India Business Council has also opened offices in Mumbai and Delhi. UKIBC is keen to help Indian businesses expand overseas and link up with partners. UKIBC will provide direct access to incoming UK companies and a platform from which to access the UK and European market with an established network of members in the UK. UKIBC provides expert guidance, undertakes research, organize seminars and delegation and unique networking opportunities. Interested members may browse for further details in the website www.ukibc.com

Meeting with the High Commission of India, London

Indian Delegation had attended a high level meeting with Mrs. M Subhashini, Minister (P & I), High Commission of India, London. Mr. S N V Ramana Rao, Second Secretary (Commerce) was also present in the meeting.

While thanking the High Commission for organizing this meeting to discuss strategies for promoting business collaborations in leather sector, Indian Delegation briefed the export of leather & leather products from India to UK and present scale of co-operation. The Government of India’s initiatives for Leather Sector was discussed. The broad outlook of Leather Parks proposed to be set up under the Indian Leather Development Programme (ILDP) was also explained, which may find it attractive to the British companies for setting up units through JVs or FDIs. After detailed deliberations, the High Commission assured its fullest support to the market promotion programmes and Road Shows of the CLE in UK market. The following are some of the outcome of the meeting:

CLE would target the MODA Exhibition being held at Birmingham, which is considered as an important Event for the British leather industry, and set up an ‘India information Booth’ in the Fair at least once in a year, with display of premium branded products manufactured in India.

Leather magazines in UK have to be targeted by the CLE, by inviting journalists from Leather Sector magazines to Indian Leather Fairs (IILF – Chennai, DILF – New Delhi, ILGF – Kolkata) for effective media coverage of India’s leather industry, Indian Leather Fair Reports etc.
Visit of Delegations from UK to be encouraged, and towards this, BFA, BTAA, BETA should be approached, and the CLE may have to coordinate these Associations

Once the Leather Park projects under ILDP are finalized, the details of the Parks in different regions have to be widely circulated to the industry Associations in UK to popularize the Parks, and help attract FDIs and joint venture tie ups from UK.

The Council will take necessary action on the decisions arrived at the Road Show Programmes.