Susan Gordon, Business Reporter

Inside the Tanners Limited factory on Spanish Town Road, Kingston.- photo by Susan Gordon

Tanners Limited, a four-decade old tannery on Spanish Town Road in Kingston, and the only one in the Caribbean, was forced to close down operations four months ago because of a shortage of the raw material hide.

It seems the shortage of milk and beef experienced locally due to a shrinking cattle industry, has taken its final toll on the tannery, which has been feeling the effects over the last three years.

Tanners, which operated, as part of the Alkali Group of Companies controlled by Barclay Ewart, was the main source of raw material for its sister company Leder Mode, a leather-fashion business.

Ewart is chairman of the Alkali group.

return to operation

While Tanners still remains on the books, it is unlikely, said Ewart, that it would return to operation before the next five years - and only if the cattle industry was resuscitated.

Hide is the skin of an animal which is cured and through chemical means, converted into leather.

"We used to get 6,000 hides per month and we ended up getting 200 hides per month over the last three to four years," Ewart told Sunday Business in an interview at his Spanish Town Road base.

"We took the decision about three to four months ago to close down the tannery," added Ewart.

The factory, up to its closure, would process 200 hides on a daily basis, a portion of which it sourced from Seprod's dairy subsidiary, Serge Island.

Ewart said the company was subsidising its supplies with imports but when the cattle shortage became widespread, sparked by the foot-and-mouth disease, it became increasingly expensive to buy from overseas.

quality of imports

Furthermore, the quality of the imported hides was not standardised, and in some cases, not as good as the domestic supplies.

The price of hides varies between US$6 to US$20 per skin on the world market, depending on the quality.

While Tanners always had a mixture of sources of hides, it would largely round up as many skins as it could - in a huge company truck - from butchers all across the island.

"There was a period when people decided not to continue the business when they started killing the cows. We did not feel the effects until the people did not replace it," said Ewart who emphasised that unless there is some concerted effort by government to resuscitate the cattle industry, it will be very expensive for farmers to re-establish pastures.

"Jamaica used to have 600,000 heads of cattle; now we don't even have 100,000 heads," he said.

Goatskins were deemed not practical options because of the small number of goats available.

He said Tanners would get 2,000 goat hides per month; but this was not enough to cover its overheads. Additionally, he said generally, goatskin was not good to make shoes, except for some types of ladies shoes.

caricom ruled out

Ewart also ruled out imports from his CARICOM neighbours, saying only the Rupununi Savannah in Guyana would be a plausible source. But even this option would be expensive.

"It will take another four to five years to rebuild the herd and it's a long time to wait. By this time, you would have lost your technical team, so it would be difficult to resuscitate," said Ewart.

Tanners Limited and Leder Mode, which employed about 400 persons in the past, now has less than 80 on the payroll because of the scale-down.

leather company takeover

In 1970, the Alkali group took over a leather company with a failed tannery in receivership.

The move was induced by the then Development Fund Corpo- ration. Ewart said a huge investment was made in the business to turn the industry around.

He said the company managed to service 36 shoe factories across the island and in North America.

Ewart believes the liberation of the market in the 1980s opened it up to imports and led to the collapse of most of these shoe factories.

The group subsequently went into the shoe and leather business, making handbags, shoes and boots.

The tannery fostered a vertically integrated business where the leather it produced was converted into shoes and other products, which were then sold or retailed under Leder Mode.

lost competitive edge

Some 80 per cent of Leder Mode's sales are in safety boots; the remainder is in leather handbags and other shoe types.

A fifth of leather safety-boot sales are from exports to markets in Guyana, Trinidad, and St Lucia.

The company does 5,000 pairs of boots per month.

Ewart said Leder Mode competed well against China's synthetic footwear, but with its raw-material supply now dried up, the company has lost that competitive edge.

The problem with the shortage of cowhide was compounded by the imports of corned beef and illegal special cuts of beef, which come into the country, he told Sunday Business.

This collapsed the price of beef in the marketplace, so the large and small farmers disappeared.

"The pastures are ruined. When the price of beef returned, people didn't have the funds to maintain the pastures," Ewart said.

"We don't have a policy to build a good cattle industry," he added, saying it takes over $35,000 to $45,000 to resuscitate an acre of grass.

Senior vice-president at Jamaica Broilers Group (JB), Christopher Levy, told the Financial Gleaner that about two years ago, JB, which produces beef under the Content brand, scaled down those operations.

source of local hides

Content Agricultural Products Limited, a Broilers subsidiary, was another source of local hides for Tanners Limited.

"We scaled down two years ago because of the shortage of animals," Levy said, explaining that JB owned only a few hundred heads of cattle.

This was happening at the same time that the price of hide was rising on the international market, influenced by the demand in China.

Ewart also said countries were choosing to preserve their hide to get more value from it.

Hide takes 30 days to move from raw hide to leather. When the skins get to the factory, they are salted to preserve them. After this, water is used to extract the salt and other vegetable-based chemicals are added to the product before it is dyed.

Ewart said when all supplies of hide are exhausted, Leder Mode, the largest manufacturer of leather- made safety boots in the Caribbean, will have to import its leather to sustain the business.

susan.gordon@gleanerjm.com.