The leather refers to the material that is produced by the hide of animal skin. To make the leather more durable and suitable for the production of various leather products, different leather chemicals are used. Leather chemicals are the chemicals that are used in the manufacturing of leather by tanning animal rawhide or skin to obtain commercial leather. These chemicals are used in different stages of leather production. In addition to this, it is also used for preventing decomposition of rawhide, enhancing leather quality, appearance, and providing heat and water resistance, thus, making them fit for several applications.
The growing demand for various leather made products such as apparels, footwear, garments, furniture, accessories, and automotive upholstery is positively influencing the demand for leather chemicals, therefore, driving the growth of the leather chemical market.
Furthermore, innovation in technology such as the use of micro and nano particulates for abrasion resistance and improved innovation in the chemical compound offering the improved color, texture, look and feel of the leather; superior water resistance along with improved finish adhesion is anticipated to drive the leather chemical market. However, increasing operational costs and strict environmental regulatory policies may restrict the growth of the leather chemicals market.
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Leather chemicals are applied on the skin of animals, to prevent the deterioration caused by microorganisms, as well as for improving the texture of leather, by making leather suitable for further applications. One of such applications is in the clothing and fashion in the textile industry which has currently been on the rise, owing to the changing trends in fashion and consumer preferences.
The growing world population is leading to an increased demand for textile. As per the report shared by the India Brand Equity Foundation (IBEF), the Indian textiles industry is anticipated to reach USD 250 billion in the coming years. In addition to this, India's textiles industry contributed around 15% to the export earnings of India, which is projected to rise further. The below figure shows the textiles and apparel exports from India from 2016-2020.
Figure 1: Textiles and Apparel Exports from India, USD billion, 2016-2021
Source: India Brand Equity Foundation
India’s textile and apparel exports stood at USD 39.20 billion in 2018 and is anticipated to increase to USD 82.00 billion by 2021 from USD 31.65 billion in 2019.
One of the most prominent demand-side market drivers for the global leather chemicals is the increasing demand for footwear made of leather. The increasing per capita income of individuals has increased the adoption of luxury leather products, especially footwear. The footwear industry is witnessing healthy growth, and with the growing population, the demand for footwear is anticipated to increase further.
According to the United States International Trade Commission, U.S. total exports of footwear were increased by USD 127 million (8.8%) to USD 1.6 billion in 2018, which is predicted to increase further in the coming years. In addition to this, the continuously changing consumer preferences for aesthetic and luxury footwear is expected to boost the demand for leather in the footwear industry and, therefore, will augment the demand for leather chemicals during the forecast period.
Leather is obtained through the hides of animals and is considered harmful to the environment as it has severe effects such as water contamination that is caused by leather chemicals. For instance, chrome-tanned leather production results in the generation of waste with chromium content and is, therefore, considered hazardous by the Environmental Protection Agency (EPA).
In addition to this, chromium content is banned in regions such as Europe which further limits the use of leather chemicals. Furthermore, harmful health effects such as respiratory disorders, kidney and liver damage, weakened immune systems, and lung cancer caused by exposure to chemicals like chromium are also restricting the demand for leather chemicals, which may hamper the growth of the market.
Based on geography, the Leather Chemicals market is categorized into North America, Europe, Asia-Pacific, Central, and South America, and the Caribbean, the Middle East, and Africa. The Asia-Pacific is expected to dominate the global leather chemicals market during the forecast period. The growth can be attributed to the increasing customer base for the luxurious products made from leather. The rising disposable income of the population in this region, availability of cost-competitive labor, land, and raw material have also influenced the leather chemicals market positively in the Asia-Pacific.
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In addition to this, the growing leather industry in countries like India, China, etc. is also increasing the demand for leather chemicals in this region. According to India Brand Equity Foundation (IBEF), the Indian leather industry accounts for around 12.93% of the world’s leather production of hides/skins. Furthermore, according to the Council of Leather Exports, the total leather and leather products export from India stood at USD 5.07 billion in 2019 with footwear accounting for USD 2195.47 million and USD 1434.24 million for leather goods, which shows an increasing demand for leather chemicals for making these products. The below figure shows the performance of the leather industry in India in the year 2019.
Figure 2: % Share of Leather and Leather Products, 2018-19
Source: Council for Leather Exports, India
The figure shows the leather footwear segment accounted for the largest share in the leather industry with 38.58%, followed by the leather goods segment with 25.20% in 2019, which is projected to increase further. Moreover, as per the All-China Leather Exhibition, the exports of the leather and footwear industry in China were 78.7 USD billion in 2017, increasing by 3.11% year-on-year. Similarly, a surge in demand from other countries like Indonesia, Bangladesh, Pakistan, etc. for leather products is further anticipated to boost the growth of leather chemicals in this region.
Europe is expected to hold the second-largest share in the global leather chemicals market due to the increase in exports of leather products in this region. As per the statistics shared by the French Leather Council, one-third of the footwear and 40% of leather goods exported worldwide were from Europe. Additionally, it also reported that countries like Italy and France are the major contributors to the growth of this industry.
According to it, French exports accounted for 5% of global exports in 2018, allowing France to maintain its ranking as the global leather sector’s fourth-largest exporter, following China (33.2%), Italy (11.9%), and Vietnam (11.5%). France holds the fifth position in the world rankings for exports of leather clothing and accessories (5.6% of global exports), behind China, Italy, India, and Pakistan. The European sales of leathers and rawhides represented 45% of global exports: with domestic sales in Europe accounting for 38%.
Furthermore, the booming fashion and apparel industry in this region is also boosting the demand for leather chemicals as the demand for luxurious leather is increasing among the population. As per the data shared by the National Investment Promotion and Facilitation Agency (INVEST INDIA), the world's textile and apparel trade stood at USD 823 billion in 2018 and has grown at a CAGR of 4%. Also, the current market size of the global apparel market is estimated at USD 1.9 trillion, which is forecasted to grow to USD 2.6 trillion at a CAGR of 5%. Europe is anticipated to dominate other regions by having the largest market share of 23% in 2018 with USD 427 trillion market value, which is expected to grow to 458 USD trillion by 2025.
The leather chemicals market comprises a significant number of both big and small players. The big players are adopting strategies such as expanding their regional presence, acquisitions, introducing new products, and enhancing their product portfolio to increase their customer base and share, which is expected to support the growth of the target market. For instance, Stahl acquired BASF’s leather chemicals business, which is one of the leading companies in the leather chemical market in the year 2017.