CHENNAI: The leather belt of Tamil Nadu extending across Vellore district is witnessing a significant rise in investments despite shortfalls in the supporting infrastructure, including broadband connectivity and a lurking manpower crunch.

The flow of investments, amid the limitations, either to set up new units or for enhancing the capacity of existing facilities in the predominantly export-oriented industry, is an indicator of the growing importance of India in the global leather industry.

A few shoe units in Ranipet and Ambur have finalised contracts with buyers for production from units, months ahead of their commissioning. "We have sold the capacity that will be created after the expansion," according to P.V. Gopalakrishna of Bachi Shoes, a frontline exporter of children's shoes.

Third unit

The firm is putting up its third unit at an investment of around Rs.9 crore that on completion would enhance its capacity to manufacture 10,000 pairs a day. The new unit on three acres would employ about 750 people. Admitting that manpower was not easily available, he says one measure that the company adopted was to provide transport for the workforce. It helped the company source workforce from far off rural areas, while instilling a sense of security among the employees, particularly women. Council for Leather Exports Chairman M. Rafeeque Ahmed said Farida Group, his company, had nearly finalised a deal with a leading retailer in the U.S. for the capacity that would be created once its fourth shoe manufacturing unit, being established in Ambur at a cost of Rs. 25 crore, is completed by the year-end.

Restriction a damper

Most of the new investments are in shoe and footwear component manufacturing and to some extent in leather products. A restriction on new tanneries has seen little investment in one of the crucial sectors of the industry, with exceptions like the Naser Bali group that manufactures leather garments and gloves at Vaniyambadi. Its director P. Anees Ahmed said the group had obtained permission from the court for relocating its tannery and was going for a "big expansion."

The project, entailing an investment of about Rs.15 crore, would be finished by January.

An interesting development, as an offshoot of the rising investments and the emphasis of large units to focus on core competencies, is the growth of tiny and small units.

According to Mr. Ahmed many such have sprung up as the large units outsource a part of their work.

© Copyright 2000 - 2009 The Hindu