LEATHER CRISIS. Footwear manufacturers and tannery workers set position
Given the different journalistic reports that have emerged in recent days regarding the price and scarcity of leather in Argentina, the Chamber of the Footwear Industry reports that it is actively working on monitoring the prices of supplies and raw materials for the industry, and particularly in relation to finished leather.
In this regard, we are aware of the differences between meat processing plants and tanneries, which has an impact on the price of meat, and indirectly on its by-product, leather.
It is essential for our industry, hard hit by this pandemic, and with a marked reduction in domestic consumption, due to the decrease in the purchasing power of the population, that a solution is reached that allows us a necessary predictability of costs, and consequently in the price of the product in shop windows.
We are part of a value chain, and being the final manufacturing link, it is that we are in permanent contact with our local supplier tanneries (which are usually mostly the smallest) with the unions (taking into account the impact on the genuine employment of the entire value chain), and together with the national authorities, in pursuit of a solution that allows us to be able to competitively produce and offer our local consumers Argentine leather products as we have been doing so far.
March 2021
LEATHER WORKERS ARE NOT ACCOMPLICES.
The undersigned, members of the National Secretariat of the Argentine Federation of Leather and Related Industry Workers (F.A.T.I.C.A.) are writing to you in order to denounce to the competent authority the very serious situation in which the entire leather industry is going through and which is endangering the sources of employment of thousands of colleagues.
As a result of the measures ordered by the National Executive Branch, delimited in the fight against the World Pandemic of COVID 19, it was arranged at the beginning of the implementation of the A.S.P.O. (Preventive and Compulsory Social Isolation) the authorization to export raw leathers through Decree 549/2020 for a period of sixty days, given the sharp drop in export of tanned leathers, to avoid their accumulation in meat processing plants with unwanted environmental and health consequences.
This measure was extended until December 31st, 2020 through Decree 812/2020, despite the fact that the tanning activity was normalizing.
This rule, of an exceptional nature and originally limited in its time, was designed not to cause damage to the meat processing plants that, maintaining their level of work, could not commercialize the leathers to their natural clients (the tanneries) because they had international markets fully closed due to a global stoppage of activity. Obviously, during most of the A. S. P. O. there were no local industries belonging to the leather value chain (leather goods, shoe makers, garments, saddlery, etc.) that were allowed to work. Notwithstanding, the understandable reasons that may exist for ordering exceptional measures, we cannot ignore the strong lobby carried out by the meat industry to achieve the liberation of the export of raw leathers under the old argument that if this liberation is not arranged, the price of meat would increase, thus affecting Argentine consumers.
Regarding this last argument, the refutation of the same is clear, since all consumers suffered the exponential increase in meat throughout 2020, especially in popular cuts, once demonstrating the inexistence of linking the price of meat with the price of raw leather and the defense policies of the national industry that a government is willing to carry out. It is also worrying that some meat businessmen blatantly lie saying that the 4 million hides that were exported salted, were buried or exported in a non-santa way, without giving any proof of their sayings.
Unfortunately, the measures of an exceptional nature and with limited temporary validity have become permanent. This situation is aggravated by the government disposition resolved at the beginning of the year to modify the tariffs to export raw hides, reducing them from 15% to 4.5%, unusually promoting the export of raw materials without added value. This measure, provisional to solve a real issue, was extended over time, and caused 80% of the slaughter to be exported in salt in the month of January 2021.
The tanning industry has the capacity to tan all the hides that are processed in the country, the entire value chain has a clearly exporting profile, and is labor intensive. In other words, it creates work and brings in foreign exchange. Now the largest exports are not from the meat processing plants, but from three rogue collectors, who send the hides at low prices, to be able to collect the dollar under the table, taking advantage of the fact that Customs has no reference value, because it was not a material that is exported and with scandalous levels of under-invoicing up to inadmissible limits of exporting at values lower than fifty percent of the real cost of processing the hides to be exported. We make available to the authorities the reliable information that corroborates what is reported here.
In this context, and in accordance with information from the same official bodies, to date almost 60% of the hides that are produced in Argentina are being exported unprocessed. Calculating that this level will continue to increase rapidly, thus making it impossible for the tanning industry to continue in the short term, making the subsistence of any industry that is part of the leather value chain unviable.
For all this, from F.A.T.IC.A. we urgently request:
- The repeal of all regulations that encourage the export of raw materials without processing.
- The putting into effect again, of systems of reimbursements and payment of duties that make possible the development of Argentine work.
- The immediate inspection of all those exporters that under-invoice, damaging the State coffers and destroying national sources of employment.
The workers of the Leather Industry will not be accomplices in the destruction of our Industry, we hope that the national authorities (by action or omission) will not transform themselves into it.
On behalf of the national secretariat of F.A.T.I.C.A signed: Walter Correa, general secretary, Ernesto Trigo, deputy secretary and Marcelo Cappiello, administrative secretary.
The Tanning Association of the Province of Buenos Aires -ACUBA- adheres to this statement through its president Daniel Alberto Argentino.
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