News items from around the world

February 8th 2009

BASF reviews strategic options for leather and textile chemicals
The leather and textile chemicals business also forms part of the activities of the current Performance Chemicals division. For several years, this business has been characterized by low market growth and high competitive pressure. In order to improve competitiveness, BASF has implemented a series of restructuring and efficiency programs in the past years. However, these measures have not been sufficient to ensure the long-term profitability of the business.

Hans W. Reiners, head of the Performance Chemicals division, said: "Our employees have worked hard to improve the business in recent years. In view of the difficult market situation, the results are not sufficient to ensure long-term success with our own means." The business unit has therefore introduced an additional program to increase efficiency, which is expected to reduce costs by €25 million by 2011.

In addition to implementing this cost-reduction program, BASF is reviewing future strategic options. In particular, these include the formation of a joint venture or the complete sale of the business. "The market requires this step not just because of the fragmented supplier structure and the low market growth," said Reiners.

BASF operates production plants for leather and textile chemicals in Germany, Spain and Turkey, as well as in Brazil, India and China. The business, which employs approximately 1,300 people, posted global sales of about €400 million in 2007. Leather and textile chemicals include products and concepts for weaving, pretreatment, optical brightening, analog and digital printing, coating and finishing, as well as dyeing auxiliaries in addition to chemicals for all wet-end and finishing processes in the leather and fur industries.

February 2nd 2009

COTANCE calls on the Leather Value Chain in Europe to unite in front of the economic crisis and on authorities to support the industry

On 30 January 2009 the representatives of the leather industry from Italy (UNIC), Spain (CEC-FECUR), France (FFTM), United Kingdom (UKLF), Germany (VDL), Portugal (APIC), the Netherlands (FNL), Sweden (SG) and Switzerland (VSG) met in Milan under the Chairmanship of Mr Nalle Johansson (ELMO Leather, Sweden) for their early year COTANCE Council Session.

They reviewed the state of the leather trade concluding that after a relatively positive first semester in 2008, the year has ended with a severe contraction in demand for leather. With orders down 20-40% in the last quarter of 2008, European Tanners are constraint to adjust their operations in terms of output and costs. The economic slowdown at global level and the recession in some countries is adversely affecting leather markets. An improvement of the leather trade is not in sight before the third quarter of 2009.

Against this background, the European Leather Industry is concerned about the likely increase in third country protectionism and an exacerbation of EU red tape.

The European Leather Industry considers that under such circumstances EU and National authorities should be looking at all possible means to support the leather value chain and to safeguard its employment. Operators expect their authorities to help SMEs to adjust with, among others, the supply of appropriate trade finance and the stimulation of demand with a policy of fiscal incentives. Furthermore, European Tanners understand that it is not the time for increasing the already costly administrative and bureaucratic burden that the sector has to face. Conversely, they call on their political leaders to postpone the implementation or suspend the enforcement of regulations that are already known to have a negative impact on the competitiveness of the leather sector in Europe and to refrain from developing new cost burdens for industry.

COTANCE Members decided to convoke without delay the representatives of the leather value chain in Europe for setting up a platform and developing joint advocacy actions towards EU institutions and National Governments.

27th October 2008

Round Table on REACH

The REACH Challenge & Innovation in the European Leather Industry

27 October 2008, Bologna, Italy

On 27 October, COTANCE held a Round Table at the highest level of the organised European Leather Industry. It was co-hosted by GERIC, the grouping of European Leather Technology Centres, and focused on the changes that the new EU Chemicals policy has brought about in the Leather business and on the Leather market.

The Leather Industry has experienced significant changes over recent decades. New global players have emerged, supply conditions have mutated and consumption patterns have evolved. New rules affecting the leather trade and industry are forging a new business environment in the sector. REACH in particular opens a new paradigm for doing business in the leather industry not only in Europe, but globally.

In the background of these structural mutations, the economic momentum, however, shows signs of sluggishness. Since the turn of the Millennium global leather production and trade have expanded in volume while the value stagnates. Europe's leather industry remains the sector with the highest value adding capacity worldwide. It responds to these changes with a higher degree of specialisation, renewed entrepreneurship and innovation. Innovation in Europe's Leather industry is about business. It concerns as much the economic pillars of doing business in the leather sector, as it concerns its technological toolbox. REACH pulls further innovation into the leather industry. Business leaders in Europe ought to understand how to harness the momentum for the sustainable development of the leather industry in Europe and at Global scale