Leather industry is on the verge of collapse, mainly because of non-availability of gas and electricity, and most of the tanneries have been closed down, rendering a large number of workers jobless.
In the leather industry, tanneries are required to work round-the-clock to turn the hides and skin to wet-blue level, but under the present circumstances, it is not possible for the tanneries to continue work, industry sources told Business Recorder.
According to them, leather sector has already registered a decline of 13.91 percent in leather and leather products exports from 1,129.638 million dollars in 2005-06 to 972.449 million dollars in 2006-07.
About 400 small, medium and large size tanneries are located in various cities of Punjab province, including Lahore, Kasur, Sialkot, Sahiwal and Multan. These tanneries have already made available 40 percent of the total raw material (hides and skins) on Eid-ul-Azha.
Now, the tanneries need uninterrupted electricity and gas supplies to turn raw material into wet-blue condition, whereas the country is facing electricity crisis and gas load shedding. The raw material so purchased is a perishable item, which could not be preserved for a long time and needed to be processed immediately, the sources said, adding that if the situation was not improved, the tanners would have to suffer millions of rupees losses.
Because of suspension of gas and unbearable load shedding of electricity, most of the leather manufacturing-cum-exporting units located in Punjab are badly affected. According to market sources, the tanneries could use furnace oil as an alternate of electricity and gas, but it is also not being transported timely.
The sources claimed the price of furnace oil had also been increased at least three times because of shortage in upcountry areas. The only single option of using generator was not economically viable because there was scarcity of generators in the market, they added.
According to Pakistan Tanners Association Chairman Tanvir Chawla, manufacturers and exporters of leather are not in a position to bear the excessive cost of replacement fuels. The drastic increase in the cost of input due to use of alternative fuels was leading toward non-competitive products, as leather was the second largest exporting industry of Pakistan, he said.
In addition, power shut down increases in the industrial areas of the Punjab is also frequent. In the prevailing supply conditions of natural gas and electricity, leather manufacturing-cum-exporting in Punjab would be unable to arrange timely deliveries to their foreign customers, hence remain short of export targets.
Another important aspect that should be kept in view by the authorities that after Eid-ul-Azha, tanneries had huge stocks of rawhides and skins, he said. However, due to non-availability of natural gas and electricity, these tanneries were unable to start production, he added.
He urged the government functionaries, especially Sui Northern Gas Pipelines Limited (SNGPL) and Water and Power Development Authority (Wapda) to ensure uninterrupted supply of gas and power to the leather exporting units of Punjab.