The effects of the Covid-19 pandemic on the leather and fashion supply chain in general are not yet quantifiable but undoubtedly the final count is likely to be quite heavy. At the time of this writing, our companies – from tanning to chemistry to mechanics – are looking at the date of 27 April or 4 May to finally be able to resume their activity after more than one month of forced closure. It is difficult to think of being able to recover lost work, if not in small part, considering also the gradualness of the restart and the safety measures to be implemented within the factories. The concern is that an entire season will be severely compromised and that perhaps the few existing orders have been moved elsewhere as competitors from other countries started earlier.
In these weeks of lockdown, Italian associations of the sector have reacted with a great sense of responsibility, respectful of health security provisions, but always at work to assist their associates and prepare for the restart. The supply chain unit received appeals from many parties to collaborate, but also to respect payment commitments to suppliers, because along the value chain everyone is both customer and supplier. We also have received interesting points of view that shift the attention on an ethical level and contain the hope that this terrible experience may leave us some moral teaching that reinforces the sense of community in the supply chain but also in the society in a broad sense.
An unprecedented emercency
“We are experiencing an incredible situation that we never thought we would have to face from both an entrepreneurial, an individual and a social point of view. Something with no precedent, but which is, however, bringing out a particular and mutual solidarity in the supply chain. I receive, we constantly receive messages from customers showing that they stand by our side. And who thank us for the service we have offered with continuity. We tanners are doing the same with our suppliers. In the midst of this terrible experience, I feel that there is the possibility of a change in attitude towards the world and towards others. The possibility of something more true and fair. The whole chain must be united, because only this way the real economy of our country can be saved”.
Gianni Russo, President of UNIC – Concerie Italiane (Italian tanners’association)
Tanneries, drop between 25 and 30%
“It is still early to draw up a complete balance sheet of the effects of the health emergency on the sector, from both an economic and organisational point of view. Estimates to date forecast an annual drop between 25 and 30%, if the reopening occurs within April. If postponed, the damage will certainly be higher. Our competitors have already resumed their activities”.
Fulvia Bacchi, General manager of UNIC – Concerie Italiane (Italian tanners’association)
Fulvia Bacchi, Direttore Generale UNIC – Concerie Italiane
What will the market be like?
“These days represent a huge challenge for us all; from the measures undertaken for the safety of companies to the management of financial resources, as the situation we are experiencing forces us to take tough decisions and plain and objective analyses, in a context that changes daily, waiting for a reopening of our production activities.
As I said, the situation is complex and despite all our “recovery plans” – we could not imagine and were not prepared for such a scenario. Everyone’s question is: what will the market be like at the end of this pandemic, what impacts will it have on us and our lives?
The difficult economic phase started already in the final quarter of 2019 and despite a ‘little ray of sunshine’ for the liveliness and interest in our Simac Tanning Tech 2020 fair, reality tells us that at least until June the world will not restart and who knows when we will be able to operate again under normal working conditions.
From what emerged at the last ASSOMAC meeting, the real economic impact of this ‘pandemic’ on our companies will perhaps be known towards the end of the year; but analyses reveal extremely worrying estimates; we can talk about a loss of turnover up to 50%, a lot will depend on what the market will look like at the restart: how many companies? how many orders? how many customers? what changes in the required products? what possibility to travel and carry out normal work activities?
If data should confirm this analysis, I think no further comment needs to be made…
All of us will certainly need new forces and strategies, appropriate tools to support a restart of the companies and as ASSOMAC we are already working into this direction.
Gabriella Marchioni Bocca, president of ASSOMAC – National Association of Manufacturers of Footwear, Leathergoods and Tanning Technologies
We will win together
“We have all been overwhelmed in recent months by a pandemic that has dramatically revolutionised our lives. News in the media upsets us every evening: the numbers of people in therapy and the growing tail of death remind us of a war bulletin! I believe that each one of us feared that, also our Italy and all of Europe could, sooner or later, be involved in some kind of military or financial war, hit by atomic bombs or economic meltdowns driven by financial enemy strategies; but we would never have thought that a simple virus could bring half the world to its knees (and perhaps the other half will receive the same treatment only at a later time; although of course we hope not). And the even more disconcerting fact is that we must fear the breath of our family members, friends, or work colleagues. We have seen quite a lot, but this was still missing! We are forced to stay home, to defend ourselves and to protect us from everyone!
It makes me think that our individualistic society should learn an important lesson from this: we are now defending ourselves all together and only if we are all respectful of the rules we will beat this virus; but in our society there are also many other “social viruses” that we will defeat only if we face them all together and if we become more engaged in our communities”.
Mariano Roberto Mecenero, President of AICC – Italian Association of Leather Chemists
We are all customers and all suppliers
“The UNPAC member companies have dealt with this emergency situation in good time and, before our supply chain was locked down by Law Decree, ensuring the availability of basic raw materials and chemical intermediates necessary to guarantee a prompt and rapid restart of supplies. To support the recovery of our supply chain’s economy, we tanneries, chemicals, mechanics and services must all be united and implement a system project to support our companies, we must team up to guarantee the supplies necessary to make the most of the recovery, to be immediately able to complete pending orders as well as new ones which, we hope, will incrementally and continuously resume. It is our duty not to disqualify the interconnected industrial activities of the supply chain, we must commit ourselves to activating a shared sector policy, in order not to fuel a race to obtain the lowest price, which could disrupt our entire supply chain, because, in the end, we are all customers and all suppliers.
Confident in the recovery of industrial activities in the short term, we are aware that sharing the supply chain objectives can be the aggregating factor that will allow the recovery of the production and economic system of our companies”.
Marco Frediani, President of UNPAC – National Union of Italian Auxiliary Producers
Rethinking research management
“The role of the Italian Leather Research Institute will be central in the concept of a new and renewed ‘environmental sustainability’. Ours is a public structure that must take a leading role, also in light of the inevitably forthcoming resources and the challenges we will have to face. We will need a new cohesion of the sector with our traditional interlocutors, with districts. Consistent with the activities of these years, we will need to reshape and rithink the research management system, to be at the forefront of innovations. For our sector, future means less use of water, less emissions, less use of chemical products and more waste valorisation”.
Graziano Balducci, President of SSIP – Italian Leather Research Institute
We remain the engine of innovation
“At this state, the Italian Leather Research Institute complies with all government provisions to contain the Covid-19 outbreak. During this difficult period it organised itself to give answers and continue its mission. We will always be the engine of research and innovation in a strategic sector. Our challenge is to always develop innovation, process and product technologies reducing environmental impact”.
Edoardo Imperiale, General Manager of SSIP – Italian Leather Research Institute