2012

Product Presentation
Leather Industry
Indian leather Products/Goods

NITIN KUMAR SINGH

Foreign Trade Development Centre BATCH: July, 2012 (Evening)

India is the largest livestock holding country - 21% large animals and 11% small animals. A source for 10% world leather requirement. About 2.50 million workforce (30% women) Annual production value is over U$ 4 billion. Annual export value is over U$ 2 billion Export growth CAGR 8.20% (2000-04). Promising technology inflow and FDI. High priority to occupational safety and work environment. Compliance to environmental standards Immense potential for future growth (domestic as well as export).

Leather Footwear Footwear Components (Shoe Uppers, Soles etc.) Leather Garments Leather Goods (Including Harness & Saddlery, Leather Gloves etc.) Finished Leather

The reason for selecting the product

The reason for selecting this as product for this presentation is that the product is widely and easily available in the industry and India owns a good share of leather products in the world trade. According to Council for Leather Exports (CLE) officials, leather goods form an important segment of India's leather industry. The production capacity is estimated to be 63 million pieces annually. Some of the products that are manufactured in the country include trunks, suitcases, vanity-cases, executive-cases, briefcases, school satchels, traveling bags and luggage, hand bags, shopping bags, wallets, purses, pouches, passport and credit card holders, diary covers, leather belts, caps. The country also produces leather upholstery items such as sofa and car seat covers.

Sourcing Hubs

Predominantly, most of the manufacturing units for leather goods are located in cities like Kolkata, Chennai, Mumbai, Kanpur, Bangalore and Pondicherry. Kanpur is popularly known as the Leather City of the World. Kanpur leather traders export leather goods in large volumes throughout the world. These massive amounts of leather products are shipped to New Delhi and other major cities in India by the Kanpur leather traders. From these places, they are exported to other nations of the world. Kanpur leather traders are involved in manufacturing, exporting, and supplying of all types of finished leather products.

India could well become a global sourcing hub for leather goods and accessories. India is the fifth largest exporter of leather goods and accessories in the world. India is the fifth largest exporter of leather goods and accessories in the world. The Foreign Trade Policy goal is to double the share in the world export in next 5 years.

The way to earn more profit is to make sale in large quantities and to sale in large quantities the price should be minimum and competitive as well. Therefore, the only make maximum profit is to give the best to the customers at the lowest possible price, which will eventually increase the sales volume as well as the demand for the product in the industry or the world trade. the industry is expected to attain a size of $5.4 billion by 2014 from the current level of $3.8 billion.

he industry is witnessing 13-15 per cent growth at present, this pace may slow down in the months ahead due to the crisis in western markets.

Calculation of FOB (Mumbai) Price

Quantity (number of shoes) = 5000
Particulars Raw Material Cost Labor Cost
Overhead Cost

Cost (in USD)

5,000 X 20 5,000 X 10 5,000 X 2

1, 00,000 50,000 10,000

1, 60,000

Prime Cost
Administrative Office Overheads Packaging and Labeling

5,000 X 1
5,000 X 1

5,000
5,000

Cost or Production Profit Margin (25%) EX WORK PRICE (EXW)

Forwarding Expenses Documentation Export Credit Insurance Misc/Inspection Expenses

1, 70,000

42,500
2, 12,500 5,000 X 0.50 2,500
2,000 3,000 2,500

FOB (Mumbai) Price

2, 22,500

Advertisements o the website Creation of website Participation in the trade fairs Approaching agents (or Export through agents) Business visits to foreign markets Opening overseas office Follow-up on enquiries circulated by export promotion councils/chamber of commerce or other trade promotion agencies

USA Germany UK Italy Hong Kong

Packaging and Labeling Focus on Augmented Products Research and Development Discounts Innovation with uniqueness