PTA chief urges government to look into issues of leather sector

KARACHI: Chairman, Pakistan Tanners Association (PTA), Anjum Zafar has urged Prime Minister Imran Khan and Advisor to PM on commerce Abdul Razzak Dawood to look into the vital/specific issues of leather sector of Pakistan for immediate resolution without further delay to save this vital export industry from further collapse, as most of tanneries have already closed their operations in Pakistan owing to non available of required level playing field and high costs.

Anjum Zafar shared his view with media with the ground facts and figures the severe condition of declining trend for finished lather industry in Pakistan, which is reached at 38.37 % for the period of July-Oct'2020 conclusion comparatively, while the over-all Leather Sector's exports is also found in negative i.e. (- 6.68 %) based on PBS. It is mandatory to clarify/rectify that one of the leading newspapers has reported that the Leather Sector is in acceleration at (+) 5.25 % growth for the period of July-Oct'2020, which is repugnant to the ground facts.

He highlighted in detail the core reasons at ground for the declining trend of finished lather exports continuously and one of them is the "Elimination" of dyed/ finished lather made by MOC unilaterally from the New DLTL scheme effective from July'2018 to June'2021 under SRO # 711 for which the following facts are evident categorically for understanding, as the dyed/finished leather was initially included in the Scheme, but unfortunately excluded from the New DLTL scheme without knowing the fact that finished leather is more than 200% value added being mother product of the industry from raw hides & skins to finished leather with due 23 tanning process, which has ultimately affected adversely to the export other than COVID serious repercussions for the tanning industry.

But unfortunately thereafter the dyed/finished leather was eliminated unilaterally from the New DLTL scheme for the year 2018-2021, the export of leather Sector was again dropped drastically to (-) 23.61% and followed by next (2019-2020) was (-) 27.01%, which is now dropped during Sept'2020 is (-) 40% and some of the factories have already closed their operations.

Inordinate delay in issuance of STPF by MOC as yet with the inclusion of one major proposal for granting subsidy on Int'l lab testing for finished leather, which is the mandatory requirement by the foreign buyers/customers of int'l repute/int'l brands before export from Pakistan and the comprehensive proposal was already submitted to EDF/MOC to the tune of Rs.180 million for the allocation of fund from the collected amount of EDS at 0.25% on each export proceeds from Pakistan at source and available with EDF accumulated for last many years consecutively, which was kept pending since long and our member exporters are paying huge amount on testing of Leather from Int'l Labs which is obviously adding to the cost of production in addition enabling our members are in-competitive & expensive in international market.

Extending subsidy on exorbitant charges of air freight charges during COVID-19 for 9 months effective from March'2020 to Nov'2020 for which comprehensive proposal with all requisitions has also been submitted to MOC/EDF but no positive outcome with required implementation is received as yet despite firm assurance.

Copyright Business Recorder, 2020