Future bleak for UP's leather units as illegal abattoirs shut down

Forty five organised slaughterhouses are not in a position to cater for the big demand for rawhide

Following stringent action and the subsequent closure of illegal abattoirs in Uttar Pradesh (UP) soon after the Bharatiya Janata Party (BJP) came to power last month, the roughly Rs 20,000-crore (Rs 200 billion) leather industry has been adversely impacted by short supply of rawhide.

Acting on the National Green Tribunal’s (NGT’s) directive to close illegal slaughterhouses in UP, thousands of unregulated and unregistered units, mainly manually operated, in thickly populated areas have been shut down.

Organised slaughterhouses, which export meat, are operating, they number roughly 45, and are not in a position to cater for the big demand for rawhide.

This has virtually squeezed the supply of rawhide to industries based in Kanpur and Unnao districts. “The leather industry has taken a hit of almost 50 per cent due to short supply of rawhide to leather-manufacturing and exporting units.

There is a severe demand-supply crunch,” UP Leather Industries Association’s (UPLIA’s) former President Taj Alam told Business Standard.

Further, he said the prices of rawhide had appreciated by 20 per cent owing to supply scarcity over the last several weeks. “If this situation continues, the state leather industry would not be able to meet even half its current fiscal target.”

“We are clearly not in a position to bargain with our buyers to renegotiate export prices since our buyers can source finished leather goods from other Asian countries like Pakistan, Bangladesh and Sri Lanka, where exporters are not faced with such a crunch situation,” he added.

Meanwhile, Council for Leather Exports (CLE) regional chairman Javed Iqbal put the likely impact on the local leather industry at a much steeper 80 per cent.

“Our business has practically come to a standstill due to a severe short supply of rawhide and the saddest part is that there is no clarity as to when things would become normal,” he said.

Besides, he flagged the issue of the proposal to shift leather tanneries flanking the river Ganga in Kanpur, saying it would complicate matters for the beleaguered leather industry in the state.

However, former CLE regional chairman RK Jalan said the rawhide supply situation would become normal in three-four weeks.

“What I know is that the state authorities have started issuing fresh licences to slaughterhouses who conform to norms and statutory requirements. It is in our good to acknowledge the hard fact that now illegal slaughterhouses in UP cannot operate,” he underlined.

Photograph: Reuters