The rawhide-based manufacturing industry try was developing quite impressively. Regretfully the supply of domestic leather raw materials at the domestic market was unable the keep up with the growth of rawhide and leather-based industries like: footwear, bags, waistbelts, leather jackets etc. Scarcity of procurement of local leather was indicated by the composition of imported leather raw materials which reached 80% of total demand.
Agit Punto Yuwono, Secretary General of the Association of Indonesian Leather Processor (APKI) disclosed that a good number of leather processing companies had to close their business due to shortage of raw materials supply from local suppliers. APKI reported that that the total leather processing industry today numbered 167 companies, of which 67 were medium-large companies, while the remaining 100 were small, home industry processors.
“The 167 rawhide processing companies are only able to procure around 20% of total need of leather and leather-product industries” Agit disclose to Business News in Jakarta Tuesday (3/6). With total procurement of only 20%, Agit remarked, import of leather raw materials had to be imported to maintain continuity of supply to the leather industry.
Today the Leather based industry needed around 5 million sheets of leather plus 25 million sheets of lamb leather per year. However the local cattle could only procure 40% of demand while the local lamb procured 25% of total need per annum. “By relying on imported raw materials, the price of Indonesian leather products becomes less competitive in the export market due to currency conversion before comparing against imported leather products” Agir remarked.