Statistical investigation of the economic impact of building a tanning industry in Oman

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Description

Leather is a durable and flexible material created by tanning animal rawhide and skin, often cattle hide. It can be produced at manufacturing scales ranging from cottage industry to heavy industry. People use leather to make various goods including shoes, hats, jackets, skirts, trousers, and belts, bookbinding, leather wallpaper, and as a furniture covering. It is produced in a wide variety of types and styles, decorated by a wide range of techniques.The GCC is a leather manufacturing hub, with $1.9 billion worth of dressed leather, luggage, handbags, saddlery, harnesses and footwear were produced in the Gulf region in 2014, with Saudi Arabia ($1.1 billion), the UAE ($468 million), and Qatar ($250 million) the region's big three leather producers.According to Euromonitor International, the value of leather imports and exports across GCC was US$3.9bn in 2013, including semi-finished and finished products, travel goods, accessories, handbags and footwear. The share of UAE was the biggest in GCC with US$2bn, followed by Saudi Arabia with US$1.1bn. With no tanneries, Oman is losing out on profits from the leather industry. Hide dealers feel that having tanneries in the sultanate can link the various sources of supply in the Middle East with leading leather manufacturers and designers worldwide. Oman is a major producer of animal hide, but the absence of tanneries forces dealers to send them to UAE from where the hides are exported to buyers across the world. This research project will collect data from some randomly selected slaughtering houses to estimate the total number of hides of different animals monthly/yearly available in Oman. This research will conduct a feasibility study to build Tannery industry in Oman. Estimating the amount of money currently Oman is losing and how much profit will be if Oman can build Tannery industry, process the skin here and trade directly to the world Market.

Layman's description

Leather is a durable and flexible material created by tanning animal rawhide and skin, often cattle hide. It can be produced at manufacturing scales ranging from cottage industry to heavy industry. People use leather to make various goods including shoes, hats, jackets, skirts, trousers, and belts, bookbinding, leather wallpaper, and as a furniture covering. It is produced in a wide variety of types and styles, decorated by a wide range of techniques.The GCC is a leather manufacturing hub, with $1.9 billion worth of dressed leather, luggage, handbags, saddlery, harnesses and footwear were produced in the Gulf region in 2014, with Saudi Arabia ($1.1 billion), the UAE ($468 million), and Qatar ($250 million) the region's big three leather producers.According to Euromonitor International, the value of leather imports and exports across GCC was US$3.9bn in 2013, including semi-finished and finished products, travel goods, accessories, handbags and footwear. The share of UAE was the biggest in GCC with US$2bn, followed by Saudi Arabia with US$1.1bn. With no tanneries, Oman is losing out on profits from the leather industry. Hide dealers feel that having tanneries in the sultanate can link the various sources of supply in the Middle East with leading leather manufacturers and designers worldwide. Oman is a major producer of animal hide, but the absence of tanneries forces dealers to send them to UAE from where the hides are exported to buyers across the world. This research project will collect data from some randomly selected slaughtering houses to estimate the total number of hides of different animals monthly/yearly available in Oman. This research will conduct a feasibility study to build Tannery industry in Oman. Estimating the amount of money currently Oman is losing and how much profit will be if Oman can build Tannery industry, process the skin here and trade directly to the world Market.

Key findings

Leather is a durable and flexible material created by tanning animal rawhide and skin, often cattle hide. Saudi Arabia and Iran are huge producers of leather with a large number of tanneries inside the countries. They produce handbags and sandals, a lot of white-label goods that can be rebranded when they arrive in the country of consumption. The emerging middle class in China has been the greatest growth driver as the country demands leather clothing, furniture and accessories. The leather industry covers diverse products and industrial processes. Leather tanning covers the treatment of raw materials, i.e. the conversion of raw hide or skin into leather and finishing it so that it can be used in the manufacture of a wide range of consumer products. The footwear, garment, furniture, automotive and leather goods industries are the most important outlets for tanners' production. The leather tanning industry uses hides and skins (by-products from the meat and dairy industry) that would otherwise be disposed of by being sent to landfills or incinerated. Leather is the tanning sector's fundamental output. It is an intermediate industrial product, with applications in downstream sectors of the consumer goods industry. The GCC is a leather manufacturing hub. Saudi Arabia, UAE and Qatar are the region's big three leather producers producing dressed leather, luggage, handbags, saddlery, harnesses, footwear etc. First edition of Leatherworld Middle East organized by Messe Frankfurt Middle East was held on 4-6 May 2015 in Dubai. Ahmed Pauwels, CEO Messe Frankfurt Middle East, the organizer of the first Leatherworld Middle East, said: "After three days of busy networking, knowledge sharing, and insights into the latest global leather trends, Leatherworld Middle East 2015 firmly made its mark on the regional and international leather market." The GCC's $4.09 billion worth of leather imports and exports in 2014, along with $1.9 billion worth of manufacturing capabilities reinforces an ideal backdrop for Leatherworld Middle East to become one of the world's premier trade and networking platforms.The 2nd edition of Leatherworld Middle East will take place on April 26-28, 2016 at the Dubai International Convention and Exhibition Centre. More than 125 exhibitors are expected at the three-day event in 2016, all eager to capitalize on the GCC's leather trade that, according to analysts Euromonitor, was valued at $4.09 billion in 2014. That figure includes the import and export of semi-finished and finished leather, accessories, travel goods, handbags and footwear. The popular Trend Area is among these, where an exclusive range of luxurious global leather innovations and animal hides will be seen for the first time in the region, from stingray skin pouches and laser printed calf hides, to 22-carat gold-embossed alligator skins. Elsewhere, the UAE's most talented up-and-coming fashion designers at prestigious fashion institute ESMOD Dubai will showcase their creative talents with an inspiring array of leather garments at Leatherworld Middle East's Designers' Area. Other exclusive product zones include 'The Shoe Box', a section dedicated entirely for footwear; and 'The Fashion Avenue', where suppliers of high street fashion leather products showcase their high-end leather clothes and accessories.More than 14,000 animals were slaughtered during Eid al Adha in Muscat, Sohar and Dhofar governorates alone. But Oman has no tanneries. A senior official from the Central Slaughterhouse in Bausher said that the skins are supplied to companies according to tenders. These are then exported to be turned into final products. Every month, about 12,000 sheep and goat and 120-150 cows and camels are slaughtered. A Dhofar abattoir official said that the skins are given to the companies that export to mainly Dubai and Ajman in UAE. There is no tanning trade in Oman yet, but a great demand for leather products. Tanning the hides can be profitable for traders. Raghunathan, accounts manager at Al Batinah Livestock, a company dealing in animal hides said that they sent the hides to Dubai from where they were mostly exported to markets like China and Europe to be turned into final products. Raghunathan said that profits dipped some time due to weak demand from Europe and stiff competition. They usually got AED50 for the hide of a small animal. This dropped to AED18 in some year and they incurred losses. Ahmed K, commercial manager for Arabian Livestock that deals with seven slaughterhouses in Oman said that they had been exporting to UAE, but some year they did not win the contract and incurred losses. Their estimate is, the company exports about 4,000 to 5,000 hides per month; this figure rises by 30 to 40 per cent during Eid. The agent they deal with in Ajman exports mainly to China, Syria and Turkey. Akram Saiful, a middleman who helps companies get contracts and arranges workers for the salting process said that it's a profitable business for him as there are not many companies (in Oman) that deal with hides. He also supplied hides to a local manufacturer in the interiors. Sheep skin has high demand in Europe, while camel skin doesn't get good value. He thought Oman can tap the leather industry as the region has a strong demand for leather products. Explaining the salting process, Raghunathan said that if hides left without salting for over ten hours, the hides become useless. The later we salt it, the higher the chances are of it getting spoilt or the quality going down. Hides of large animals need two to three kilograms of salt while smaller ones (goats and sheep) need a kilo or less. Ahmed K said that salt is needed to remove the moisture; the skin contains 70 per cent moisture. Drying it with salt also limits bacteria and helps in easy preservation. The process takes five days to a week.Camels have long been a Bedouin?s best friend, providing food, clothing, transportation, shelter and protection, and becoming a symbol of reliability and resilience in the harsh Arabian climate. Former UAE president and ruler of Abu Dhabi HH Sheikh Zayed bin Sultan Al Nahyan built the Al Khaznah tannery to transform local camel hides into finished leather. It now supplies businesses across the UAE, including furniture design company Mira Designs in Dubai. As well as creating butter-soft leather in all manner of colours and finishes, Al Khaznah?s products are biodegradable and produced using environmentally friendly and sustainable methods. And it?s not just local suppliers that are benefitting: the tannery?s unique techniques have ensured it is now on its way to supplying camel leather to some of Paris?s famous fashion houses. For all these reasons and more, we shall visit Al Khaznah and some other Tanneries in UAE and Saudi Arabia, where we shall learn about the unique leather and tanning processes. References: Khan, M. (2014), Without tanneries, Oman losing out on leather industry profits. http://www.muscatdaily.com/Archive/Oman/Without-tanneries-Oman-losing-out-on-leather-industry-profits-3iyj Sands, H. (2012), Camel leather in Abu Dhabi, http://www.timeoutdubai.com/community/features/32031-camel-leather-in-abu-dhabiS cott, A. (2015), UAE leads local leather trade, http://www.thenational.ae/business/economy/uae-leads-local-leather-trade ILM (2014), Gulf region's leather trade creates new industry platform in Dubai http://internationalleathermaker.com/newsTrade Arabia (2015), Top tanneries showcase leather products at Dubai show, http://www.tradearabia.com/news/IND_281229.html
عنوان قصيرLeather is one of the world's most widely traded commodities. The global trade in leather and leather products is worth more than $60bn per year and it is not just the brown shiny coats so beloved of many people or the patent black footwear sported by man
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