SWOT Aalysis: Indian Leather Industry: Footwears Infoline

SWOT Analysis of Indian Leather Industry

STRENGTHS

• Existence of more than sufficient productive capacity in tanning.
• Easy availability of low cost of labour.
• Exposure to export markets.
• Managements with business background become quality and environment conscious.
• Presence of qualified leather technologists in the field.
• Comfortable availability of raw materials and other inputs.
• Massive institutional support for technical services, designing, manpower development and marketing.
• Exporter-friendly government policies.
• Tax incentives on machinery by Government.
• Well-established linkages with buyers in EU and USA.

WEAKNESSES

• Low level of modernisation and upgradation of technology, and the integration of developed technology is very slow.
• Low level of labour productivity due to inadequate formal training / unskilled labour.
• Horizontal growth of tanneries.
• Less number of organised product manufacturers.
• Lack of modern finishing facilities for leather.
• Highly unhygienic environment.
• Unawareness of international standards by many players as maximum number of leather industries are SMEs.
• Difficulties in accessing to testing, designing and technical services.
• Environmental problems.

OPPORTUNITIES

• Abundant scope to supply finished leather to multinationals setting up shop in India.
• Growing fashion consciousness globally.
• Use of information technology and decision support software to help eliminate the length of the production cycle for different products
• Product diversification - There is lot of scope for diversification into other products, namely, leather garments, goods etc.
• Growing international and domestic markets.

THREATS

• Entry of multinationals in domestic market.
• Stiff competition from other countries.(The performance of global competitors in leather and leather products indicates that there are at least 5 countries viz, China, Indonesia, Thailand, Vietnam and Brazil, which are more competitive than India.)
• Non- tariff barriers - Developing countries are resorting to more and more non – tariff barriers indirectly.
• Improving quality to adapt the stricter international standards.
• Fast changing fashion trends are difficult to adapt for the Indian leather industries.
• Limited scope for mobilising funds through private placements and public issues, as many businesses are family-owned.

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