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Business of Leather / Taiwan Interview

Shift to Southeast Asia Was Inevitable for Taiwanese Leather Industry

The Taiwanese leather sector dates back to more than 70 years and it was in the 1990s that the tanneries began to relocate and set up factories in Thailand, Vietnam, Mainland China and other Southeast Asian countries. Today it produces about 45-60 million square feet of leather per month, exporting almost 98% to some of the best-known footwear makers. Thomas CJ Yu, President of the Taiwanese International Leather Association (TILA) in conversation with texfash.com.

By

12 September 2022

 4 minutes
Long Story, Cut Short
  • Taiwanese leather sector’s strategy to move to Southeast Asia is still going on.
  • The Taiwanese leather industry is focused on high physical properties and functional leather development.
  • The number of tanneries have decreased because of business and competition.
The Taiwanese shoe companies moved to Vietnam and Thailand in early 1990s enabling the Taiwanese leather industry to expand their business to these countries and penetrate into other local related companies. Currently, there are about 10 Taiwanese companies in Vietnam and another six in Thailand.
The Big Shift Taiwanese shoe companies moved to Vietnam and Thailand in early 1990s enabling the Taiwanese leather industry to expand their business to these countries and penetrate into other local related companies. Currently, there are about 10 Taiwanese companies in Vietnam and another six in Thailand. Manuela Kohl / StockSnap

The Taiwanese International Leather Association (TILA) was formed in 2008 to look into the interests of the industry. It now has 103 members, including tanneries located in Mainland China, Vietnam and Thailand, tannery machinery makers, chemical suppliers and agents, raw material dealers, as well as environmental engineering companies. The association is actively involved in the following areas through a number of committees:

  • Industry Development Committee: In charge of establishing and special Taiwanese leather zone and promote new environmental leathers.
  • Leather Technical Committee: Train competent people and conduct training courses.
  • Taiwan Leather Image and Reputation Promotion committee: Improve Taiwan leather’s quality, image and also promote Taiwanese tanners.

Working with the leather chemical industry since 1997, Thomas CJ Yu volunteered at the TILA from day one and was made president in 2021 where he strives to consolidate the industry and amplify its voice.

Let's go back just a bit in time. The early 1990s were marked by many Tainwanese companies setting up bases in Thailand and Vietnam. Could you elaborate on how this has worked in favour of the Taiwanese lather industry?
The Taiwanese shoe companies moved to Vietnam and Thailand in early 1990s enabling the Taiwanese leather industry to expand their business to these countries and penetrate into other local related companies. Currently, there are about 10 Taiwanese companies in Vietnam and another six in Thailand.

Why did this happen?
The situation has changed in China due to the political situation. Labour cost, maintenance cost and policy changed in China. More Taiwanese companies moved to Southeast Asia (Vietnam, Thailand, Indonesia, etc) in order to maintain or even expand business in their field and this situation has not changed even now. The strategy to move to Southeast Asia is still going on.

Are the ground realities any different from what they were 30 years ago? In what way?
As I mentioned before, the shift to Vietnam, Thailand or any other Southeast Asian country was inevitable because the Taiwanese shoe and related companies are labour-intensive in a cost-sensitive industry. They also need a safe environment and a stable government with stable policy to support their business. The situation now in China is totally different from 30 years ago. That made them move to other countries which were a right fit for them to continue their business. And, those Southeast Asian countries just fitted their requirements.

The Taiwanese leather industry is well respected. What, according to you, has been the USP of your leather sector? Could you elaborate?
The Taiwanese leather industry is focused on high physical properties and functional leather development. It works closely with international brands in order to supply the material they need immediately. Taiwanese leather industry also works closely with manufacturers directly so that they can solve problems at production site quickly and effectively. Continuous development, working together, quick response and on-time delivery are the keys that work for the Taiwanese leather industry.

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Taiwanese leather industry produces about 400 million square feet of leather/year from cattle hide and about 80 million square feet from leather/year for pigskin.
A Lot of Leather Taiwanese leather industry produces about 400 million square feet of leather/year from cattle hide and about 80 million square feet from leather/year for pigskin. burst.shopify

The TILA has members across the sector. Which segment (tannery/raw materials/chemicals) is the weakest link in the chain? Could you explain?
It is difficult to say which is the weakest link. The number of tanneries have decreased because of business and competition. Raw material suppliers are also integrated into less number but bigger supplier. The chemical industry is in a similar situation.

How is the association working towards adhering to standards in a world where leather seems to be increasingly out of fashion?
First of all, the reason why leather seems to be out of fashion is because of the incorrect information that is spread about leather, be it PETA, the vegan movement, or the agricultural industry for global warming. TILA, as the association for the leather industry, promotes the beauty, idea and design of leather and works closely with international organizations like the ICT, IULTCS, ICHSLTA, Leather Naturally, etc to correct the misleading information. We also work with LHCA in the USA to hold leather design competitions to help students in design-related schools to understand more about leather.

How are the standards in Taiwan compared to other countries where Taiwanese companies operate like Thailand and Vietnam?
I believe the standards are the same in Taiwan and in other countries.

What is the official position of TILA on all kinds of faux leather?
First of all, leather by definition, is skin from animal. All kind of faux leather can only be called as synthetic material. In some countries, the use of the name ‘leather’ can only be used on genuine animal skin by law. We are also working on putting this into law in Taiwan.

Are you countering disinformation about leather at any level?
Yes. I always discuss and debate with people on social media as also in public about the misleading information about leather.

Tell us a bit also about the size of the Taiwanese leather industry both in terms of size as well as revenues? How much is exported (both in terms of units as well as $)?
Taiwanese leather industry produces about 400 million square feet of leather/year from cattle hide and about 80 million square feet from leather/year for pigskin. These are mostly exported (more than 98%).

First of all, leather by definition, is skin from animal. All kind of faux leather can only be called as synthetic material. In some countries, the use of the name ‘leather’ can only be used on genuine animal skin by law. We are also working on putting this into law in Taiwan.

Thomas CJ Yu
President
Taiwanese International Leather Association
Thomas CJ Yu
Richa Bansal

Richa Bansal

RICHA BANSAL has more than 30 years of media industry experience, of which the last 20 years have been with leading fashion magazines in both B2B and B2C domains. Her areas of interest are traditional textiles and fabrics, retail operations, case studies, branding stories, and interview-driven features.

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  • Dated posted: 12 September 2022
  • Last modified: 12 September 2022
 
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