The 2024 All-China Leather Exhibition will take place from 3 – 5 September at the New International Expo Centre in Pudong, Shanghai. The event covers a total exhibition area of 92,000 square metres and 8 halls of international and domestic tanneries, materials, machinery and chemical suppliers.

The whole supply chain for the leather and footwear manufacturing industries is represented with a wide array of leathers, components, chemicals and machinery on display. Many of the world’s leading chemical suppliers are present at ACLE and use it as a platform to launch new products and technological developments direct to their target market in China.

ACLE was held continuously from 1998 to 2019, demonstrating solid growth both in terms of number of exhibitors and number of visitors passing through the fair.

It had established itself as a key business platform to supply China with the raw hides, semi-finished leather that its industry requires to continue functioning as well as the specialty chemicals from the world’s leading producers. Many domestic companies also exhibit so that they can be in contact with buyers from the main manufacturing provinces of China, and who make up the vast majority of buyers in the fair.

However, after the 2019 event, the global pandemic caused the 2020, 2021, and 2022 ACLE events to be cancelled and it was not until August 2023 that ACLE could be organized once again. As the 2023 event approached, uncertainty and low expectations were prevalent amongst leather professionals as China’s leather industry had not performed well in the first half of 2023.

Such fears were soon dispelled as ACLE 2023 got underway and the three days of the fair generated a record number of visitors reaching more than 28,300 – some 20% more than the previous record number.

This can be ascribed to the fact that ACLE 2023 was the first occasion since 2019 (a gap of four years) that buyers and suppliers had had the opportunity to meet, face-to-face, and the need for a professionally organized trade fair where the whole manufacturing supply chain was present and sourcing requirements could be fulfilled.

Looking towards the 2024 Event

The success of ACLE 2023 and the optimism it generated is clear evidence that ACLE is the definitive commercial event in China serving the leather and the manufacturing industries. But it is not just the event itself that can guarantee solid business activity. It also depends on the backdrop to the fair in economic and geopolitical terms. 

Backdrop

Trade, production, and consumption were hit by the impact of the pandemic starting in 2020 and as international trade was still normalizing, Russia’s invasion of Ukraine and the application of sanctions threw the economy into chaos. Energy prices soared, inflation surged and just when it looked as if central bank measures of higher interest rates had brought inflation under control, another crisis flared in the Middle East, complicated by attacks on shipping in the Red Sea. Many container vessels elected to take the Cape of Good Hope route from Asia to Europe, resulting in higher freight costs.

Add to these geopolitical conflicts the ongoing trade tension between the US and China, which was a factor back in 2019 during ACLE of that year, then there is a perfect storm blowing to the detriment of international trade and commerce.

This has resulted in a fall in demand for consumer goods in Europe and the US, as disposable income was directed to pay increased food, energy, mortgage, and rental costs.

Poor macroeconomic indicators in the Euro Areas, it teeters on recession have dampened consumer confidence and as thing currently stand, the western economy and those of Asia have effectively become “polarized”.

Asia

The main Asian economies of India and China are forecasted to grow by 7.6% and 5.2% respectively this year. Inflation is low and consumer confidence relatively high. In effect, these are the economies where demand for consumer goods could be resurgent and give a much-wanted boost to the leather sector.

Starting last summer, the Chinese government lowered interest rates to stimulate consumer demand. Big ticket purchases were in evidence in China last year, with new auto sales exceeding 30 million units for the first time with 9.7 million vehicles being electric or hybrids.

With Chinese brands taking a bigger market share, low inflation and consumers willing to buy, China should be a key export market for manufacturing supplies. ACLE is the ideal platform from where to penetrate this huge market as its 25-year track record has demonstrated.

Leather versus Synthetics

At the time of writing, benchmark Texas steer prices are currently trading at US$22. This is a long way from the historical high of US$115 in September 2014. At such a price level, leather had priced itself out of the market as designers and manufacturers turned to using cheaper synthetics to consolidate profit margins.

Historically, approximately 54% of leather was used in footwear production but given the worldwide boom in sneaker sales in the last decade, this figure could now be less than 30%.

Nevertheless, China is still the leading manufacturer of leather shoes and, based on the latest figures, exported 720 million pairs in 2023, in the first six months.

Whether leather can recover its market share in footwear is an open question, but in the last five years, there are signs that consumers are questioning the mass use of synthetics that have a short life span and, when sent to landfill, pollute the environment as such materials are not biodegradable.

Thus, the challenge facing the leather industry is not only to make leather without poisoning land and groundwater, but to educate the consumer about the qualities of leather such as its longevity and repairability. In this respect, the Leather naturally campaign has published much information in order to educate the consumer and make him aware of the threat petroleum-based synthetics pose to the oceans, environment and marine life.

With an oversupply of hides from the meat industry due to robust red meat demand from countries such as China and Japan, cattle hides are cheap and abundant. However, demand is weak, and many hides are sent to landfill which is a scandalous waste of valuable raw material.

Leather is part of the circular economy and despite slick marketing campaigns, vegan materials are simply not sustainable as they all need plastic to bind them together. In effect Vegan is plastic and not sustainable in any way.

Paradoxically, lower prices have not encouraged increased demand for leather by manufacturers especially in the footwear sector and tanneries have complained about lower volumes and lower prices.

It is difficult to know if the complex combination of economic and geopolitical factors might be resolved in the coming six months as we approach ACLE 2024.

However, one factor is certain.  ACLE is the ideal business platform where to make contact and negotiate with the decision makers from China’s leading tanneries and the footwear factories that still manufacture between 3 and 4 million pairs of leather shoes per year.

This, press release can be complemented with the latest report from the China Leather Industry Association which will analyse the industry’s performance in 2023 and forecast the prospects for the coming year.