Manufacturers Did Not Earn Anything from Application of Customs Duties on Leather Export
2017 November 08 ( Wednesday ) 11:37:27
Baku / 08.11.17 / Turan: In November of last year, high customs duties on the export of leather from Azerbaijan were applied. The government set a duty for the export of every ton of wool of large and small cattle from 150 to 500 dollars, regardless of the condition of the primary treatment.
Although the reasons for this decision are not explained https://goo.gl/Lq2KX8, it is easy to understand that the delay in the export of semi-finished dairy products is the intention to give a push to the production of finished leather products. A year has passed, so what happened in this area?
According to the State Statistics Committee"s report, for 9 months of this year, the production of processed leather increased by 16.4% and reached about 100 thousand square meters. In this period, instead of increasing the legal production of leather shoes, it decreased by 37%. Official institutions declared the sewing of 150 thousand pairs of footwear.
The State Customs Committee states that during this period, the export of leather ($ 12.3 million) increased by about 50%. According to the report of the Committee, for 9 months of this year the import of finished leather goods to Azerbaijan increased by $ 1 million, reaching $ 13.4 million. As it can be seen, the past year was not sufficient for the organization of local production. In previous years, the highest export of leather from Azerbaijan was in 2014 - 24 million US dollars. A year later, exports fell by half. In 2016, exports slightly increased and exceeded $ 15 million.
Basically, leather from Azerbaijan is sold to Turkey. There are several enterprises in the country with Turkish capital for processing and exporting leather.
Shakir Zeynalov, the owner of a small leather processing plant in Baku, told Turan the government"s restrictions on the export of leather from the economic point of view should be welcomed. However, in his opinion, local producers are still experiencing difficulties in producing goods that could compete in the market with foreign brands. Although in Yevlakh and Absheron there are several industrial enterprises equipped for the production of leather products.
"The launch of my company took place on the eve of the adoption of the well-known decision of the Cabinet. We have the opportunity to process 20 thousand sheepskins per year. Under existing conditions, it is not so easy to work. Skin manufacturers last year sold one skin for 70 gapik, and now the price has risen to 1.60 manat. Chemicals for the production and processing of leather are imported. Local ingredients are just lime and salt. Therefore, the customs duty levied for processed leather greatly reduces profitability," said Shakir Zeynalov.
The marketing specialist Anar Bayramov believes that regardless of the type, there is always a need in the market for a local product, including leather goods. The buyer does not always pursue a branded product.
Anar Bayramov is not a supporter of linking the small local leather production in the market with a shortage of specialists in this field: "This business can be regarded as profitable. So a company setting up production is interested in training professional staff. The main, however, is the question of completing all the links in production. I hope the fluctuation of foreign clothing manufacturers in the issue of coming to Azerbaijan is caused by this factor," Anar Bayramov told Turan.
Over 850 people work in the sector of leather processing and footwear production in Azerbaijan. Their average monthly salary is at the level of nominal labor payment, which is 498 manat. The largest leather handler is LLC Gilan-Deri in the town of Yevlakh. Its construction and equipment cost AZN 27 million. 198,100 square meters of leather was produced in Yevlakh in 2016. This is ¼ of the previous year"s figure. The highest skin production in Yevlakh was registered in 2014 - 1 million 88 thousand square meters. The question of Turan News Agency about the reasons for the deterioration of production indicators in LLC Gilan-Deri was not answered. --08B--