Italy and the rest of the world: the dark quarter that traumatized tanning

Dall’Italia al mondo: il trimestre nero che ha sconvolto la concia

UNIC – Italian Tanneries’ Economic Service has analyzed the situation by looking at the dark quarter that traumatized the tanning segment, all around the world, “with the Covid-19 pandemic generated shock”. A shock that has impacted all countries with developed tanning industries. These countries “generally suffered significant decrements of both production levels and sales in the first quarter of the year, with no solid hope that a recovery will take place in the coming months”.

The dark quarter that traumatized tanning

UNIC’s analysis starts with Italy, where in the first 3 months of the year, tanneries “have decreased production volumes by 21% and forecasted the year will close with a -30% performance”. In other words, “the worst result since the 1970s. In Spain “quarterly production results were slightly positive, thanks to solid performances in the first 2 months of the year”. The consequence: Spanish leather “doesn’t count on making up the losses tied to the fashion industry, as demand for such segments is decreasing significantly”. The tanning segment in Portugal, “even if not affected by the shutdown of activities (opposite to some footwear operators), calls for great concern as their work is connected to orders that came in before the pandemic spread, and thus the upcoming month are uncertain”.

UK, France and Germany

London reports “decisively lower amount of orders”, even if no forced shutdown was called”. In France, “the stop of production activities lasted for about a month, starting in mid-March, but the majority of tanneries only reopened the first week of May”. The country also saw “limited activity rate (18% on average, with only 20% of the workforce present on site). The decrease during the first quarter was between 30% and 50% and difficulties are forecasted to last at least for the entire 2nd quarter”. Germany “closed its first quarter with increased production volume. The country is now recording a 45% operational capacity for refinement plants and demand levels down by 30%”.

Rest of the world

China’s 1st quarter recorded “production output of the tanning segment decreasing by 15% in volume: -20% for footwear and -47% new vehicles bought. 80% of businesses (retail included) reopened starting mid-March, but with productivity levels between 30% and 70%. Performances in 2020 are “expected to include a decrease in revenue comprised between -50% and -80%”. In traumatized tanning “production levels remained solid for the early procedures of tanning”. But it is highlighted how “refining sites are producing at half capacity due to the general lack of orders, and consequent production becoming tock”. Export data confirms these considerations: “Export value decreased by 20%, while the drop in volume was of 14%”. The decreased “was mainly for wet-blue, down 38% and 25%, respectively”. Turkey also slowed down, as “the quarter ended with production volumes similar to those of the previous year”.

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