Soldiers abroad prefer Indian leather

If India's information technology sector has witnessed an outsourcing boom due to cost advantage, the same factor has made the armed forces in countries like Russia, Algeria, Libya, Germany, Poland and Turkey look towards India, for sourcing leather for making special kind of dynamite proof shoes.

Hameed Group, a Kanpur-based company, has been supplying the special kind of printed leather to the army in all these countries through its agents, which include big companies like Zell & More and Antonious of Germany, Polaris of Russia, to name a few.

"The special kind of leather can only be made of the buffalo skin available in the northern part of India or from the skin of the American cow. They are increasingly looking towards us as our product is far cheaper than the American one," said Irshad Alam, Hameed Group's managing director.

The company, which had started operations 12 years ago and began exporting in 1996, at present, generates a  revenue of Rs 150 crore (Rs 1.5 billion) from the export of these special types of leather.

Another segment in the leather business in which the company has been flooded with orders is upholstery leather. The group supplies this kind of leather to countries like Russia, China, Malaysia, Italy, and the US.

"The market for upholstery leather is growing 20 times every year," said Alam. To cash in on this opportunity, the company plans a new facility at Banther near Kanpur, with an investment of Rs 20 crore.

"The plant will be fully computerised. We have already put in place orders for the machines. Our testing lab is also ready to function," Alam added.

The plant, which is scheduled to start operations by the end of 2006, will enable the company to export fully furnished leather sofas, which is expected to take the business to new heights.

"We are hopeful of a 100 per cent increase in revenue after the new plant becomes operational," Alam said, adding, "till now we have been exporting the leather part. But when we start exporting complete sofa sets, the revenue will be much higher and will gain from the value addition."

While Russia and Ukraine have been big markets for the company, it now plans to tap new markets like Korea and Latin American countries like Mexico. "These are markets with huge demands for such kind s of products," Alam said.

Offshoring

The company generates a revenue of Rs 150 crore (Rs 1.5 billion) from the export of these special type of leather.

The company plans a new facility at Banther, with an investment of Rs 20 crore (Rs 200 million) to cash in on the new market for upholstery leather.

The plant is expected to help the company export fully furnished leather sofas, thereby taking the business to new heights.

The company intends a 100 per cent increase in revenue generation after the new plant becomes operational.The firm plans to tap new markets like Korea and Mexico, apart from the already existing Russia and Ukraine.