The Italian tanning industry with its 1,165 businesses located in the productive districts of Veneto, Tuscany, Campania, and Lombardy, and its 18,000 employees, looks with optimism to the first positive signals of 2021 that reconfirm its leadership: not only is it the first manufacturer and exporter in Europe, it is also the first manufacture and exporter of high-end products around the world.
A leadership that has held steady despite the tsunami kicked off by the pandemic that created a state of great suffering along the entire leather supply chain, resulting in double-digit losses in all sector economic indicators in 2020, with the only exception being leathers destined for the furnishing industry. The past year has in fact registered a production trend down by -23% compared to 2019 for a total of 3.5 billion euros and exports down by -25%. Basically, in just one year’s time, almost one billion euros were lost both in terms of production and exports.
The expected rebound occurred during the first quarter 2021, when volumes once again began growing by +20.7% annually, with the sector’s revenue up by +25.3% and exports (which are worth 75% of the sector’s production) up +28%. Comparing the data with that previous to the pandemic, however, it emerges that the sector has not yet fully recovered: during the first half of 2021, compared to two years ago in fact, Italian leather is still down by -10.4% in volume and by -15.5% in revenue, with exports down by -16.4%. Altogether, the sector is starting down a road to recovery from the crisis, which will hopefully not take too long, even if there is still a lack of a strong positive trend capable of involving all segments and production districts.
This absolute impossibility of generalising the trends underway is reflected, for example, also in the performance of countries where Italian leathers are destined. Exports destined for China (including Hong Kong), which for almost thirty years was the first foreign destination for Italian leathers, experienced a growth of +39% over 2020, but still remain far from the values of 2019: -25%. The situation is similar for exports destined for the main European partners: France (+21% over 2020, -21% when compared to 2019), Germany (respectively +19% and -16%), Spain (+17%, -35%), Portugal (+18%, -8%), Poland (+25%, -12%), Romania (+30%, -18%), Serbia (+41%, -10%), and the UK (+28%, -26%).
There are however positive exceptions to this trend, like Vietnam (currently the second most important destination for Italian leather exports), which grew by +68% from last year, but also by +16% compared to two years ago, the USA (+41% over 2020 and +3% over 2019) and Mexico that is now emerging (exports doubled compared to last year and are up +42% compared to two years ago).
Likewise in the analysis of individual productive segments, there are similar trends to the export ones. For example, there is an uptrend in leather sales in the furnishing industry, while there is only a partial recovery for leather goods and above all for the automotive industry. At the same time, although footwear is up over 2020, it is still the segment in most difficulty. As far as leather types are concerned the recovery seems to be more consistent for cattle hides, above all with a medium-large grain, and for sheepskin. Instead, goatskins are characterised by continuing drop-offs.
Above all this situation of difficult, yet courageous recovery, is threatened by one thing in particular: the price of raw materials, which rose on an average by 25% from January to June 2021, and which were up no less than 45% over 2020, with increases superior to even 65% for some rawhide types. A phenomenon of uncontrollable growth that involves in a substantial way also the supply of related chemicals. This uptrend, if not accompanied by a significant and authentic recovery in terms of supply and demand, could significantly hinder the rhythm and intensity of recovery, with extremely serious consequences for the financial sustainability plan of the sector.