Markets. Russian Leather and footwear industries in 2002-2004

Markets
Russian Leather and footwear industries in 2002-2004

Finished leather production in Russia grows continuousely since 1998. Production of chrome-tanned leathers in 2002 as compared with 1998 amounted to 302% (202% growth), production of Juft leathers - 206% (106% growth), production of heavy leathers - 180% (80% growth). In 2003 production of chrome-tanned leathers amounted to 1421 million sq. dm (20.8% growth as compared with the year 2002), output of Juft leathers - 118 million sq. dm (16.8% growth), output of heavy leathers - 67.7 million sq. dm (8.3% decrease). Production of Juft and chrome-tanned leathers has been growing all these years. Meantime, after a couple of years of growth, we saw a considerable decrease in heavy leathers production in 2002-2003 (the term "heavy leathers" includes sole leathers, most of harness and saddlery leathers and some types of technical (industrial) leathers). In 2 years (2002-2003) decrease in heavy leathers production amounted to 34.8%. Many local footwear producers chose to use cheaper materials (reconstituted leathers and artificial materials) instead of heavy leathers for insole base production. Latest statistics from the Goskomstat of RF on the 1st quarter of 2004 provide some hope in revival of heavy leathers production in 2004. In the 1st quarter of 2004 as compared with the respective period of the previous year production of heavy leathers has grown by 31.5%, production of chrome-tanned leathers - by 19.35%, production of Juft leathers - by 50.96%.

Chrome-tanned leathers production. 1st Quarter, 2004 (thousand dm2)

Producer	1^st Quarter, 2004	1^st Quarter, 2003	Ratio 2004/2003 (%)
Total	409267	342923	119,35
Including biggest producers:
Ostashkov tannery	119322	94820	125,84
Russkaya kozha, Ryazan	110132	72191	152,56
Chrome, Yaroslavl	33699	38128	88,38
Kozha-M, Eletz	21664	19930	108,7
Rascom, Rasskazovo	18371	17596	104,4
Artex, Kirov	17740	5461	324,85
Spasskiy tannery	13924	431	3230,63
Kurskaya Kozha, Kursk	11068	13804	80,18
Trud, Serpuhov	9828	13629	72,11
Bokoz, Bogorodsk	8807	7662	114,94
Kozha, S. Petersburg	8470	8514	99,48
Kozhevnik, Kamishlov	5684	5002	113,64
Safyan, Kazan	5255	4046	129,88
Yuzhuralkozha, Chelyabinsk	4493	5348	84,01
Yurgens tannery, Bogorodsk	4227	5111	82,7
Rona, Ulyanovsk	3400 (wet-blue)	1189
Kors, Novosibirsk	3233	3572	90,51
Chrometan, Bogorodsk	2052	-
Vahrushy-Juft, Vahrushy	1740	1946	89,41
Oktyabrskiy leather-footwear plant	1267	1602	79,09
Koms, Belgorod region	765	983	77,82
Sterlitamakskiy tannery, Sterlitamak	643	2764	23,26
Sarapulskiy tannery, Sarapul	571	1245	45,86
Kuznetzkkozha, Kuznetzk	247	396	62,37
Vladikavkazskiy tannery, Vladikavkaz	215	-
Taganrogskiy tannery, Taganrog	1	4	25,0
Ruskon, Moscow	-	9578
Tverskoy tannery, Tver	-	3845
Krasnodarskiy tannery, Krasnodar	-	83

Two biggest tanneries "Russkaya Kozha and Ostashkovskiy tannery produced over 50% of whole Russian output of chrome-tanned leathers. Artex, Safyan and Spasskiy tanneries also achieved good growth rates. Some tanneries completely ceased chrome-tanned leathers production, some were closed, and others resumed production.

Heavy leathers production. 1st Quarter, 2004 (thousand dm2)

Producer	1^st Quarter, 2004	1^st Quarter, 2003	Ratio 2004/2003 (%)
Total	17995	13684	131,5
Including biggest producers:
Ribinsk tannery, Ribinsk	6310	5187	121,65
Shevro, Ostrogozhsk	6192	5160	120,0
Taganrogskiy tannery, Taganrog	1931	423	456,5
Chrometan, Bogorodsk	1548	407	380,34
Vahrushy-Juft, Vahrushy	703	478	147,07
Sterlitamakskiy tannery, Sterlitamak	485	107	453,27
Saratov tannery, Saratov	273	1021	26,74
Safyan, Kazan	219	233	93,99
Kuznetzkkozha, Kuznetzk	188	300	62,67
Kozha, S. Petersburg	94	125	75,2
Kors, Novosibirsk	-	6

Two biggest Russian producers (Shevro and Ribinsk tanneries) produced about 70% of whole Russian output of heavy leathers. Shevro, being an unsurpassed leader in high quality heavy leathers segment, during only a few years have also considerably increased production volume becoming one of the biggest Russian producers of heavy leathers. We suppose that management team appointed by new owners of the tannery in 1999 has heavily contributed in company's success.
Also Taganrog, Sterlitamak and Chromtan tanneries were quite successful achieving outstanding growth rates.

Juft leathers production. 1st Quarter, 2004 (thousand dm2)

Producer	1^st Quarter, 2004	1^st Quarter, 2003	1 кв.2004г.в % к 1 кв. 2003г.
Total	34611	22927	150,96
Including biggest producers:
Yurgens tannery, Bogorodsk	7915	3598	219,98
Chrometan, Bogorodsk	6508	5664	114,9
Taganrogskiy tannery, Taganrog	6191	813	761,5
Vahrushy-Juft, Vahrushy	4345	5018	86,59
Kuznetzkkozha, Kuznetzk	3126	293	1066,89
Kozhevnik, Kamishlov	2774	780	355,64
Ribinsk tannery, Ribinsk	1456	1803	80,75
Artex, Kirov	1319	1098	120,13
Yuzhuralkozha, Chelyabinsk	411	1391	29,55
Bokoz, Bogorodsk	369	8	4612,5
Safyan, Kazan	261	164	159,15
Kors, Novosibirsk	87	56	155,36
Kozha, S. Petersburg	35	37	94,6

Yurgens and Taganrog tanneries as well as Kuznetzkkozha, Kozhevnik and Bokoz significantly increased output of Juft leathers. On the other hand former leader Vahrushi-Juft gradually reduces Juft output.

Footwear production. 1st Quarter, 2004 (thousand pairs).

Producer	1^st Quarter, 2004	1^st Quarter, 2003	Ratio 2004/2003 (%)
Total	10051,7	10398,0	96,67
Including biggest producers:
Bris-Bosfor, Krasnodar region	2281,0	2874,0	79,37
Mua Production, Vladimir region	500,0	320,0	156,25
Unichel, Chelyabinsk	369,0	357,0	103,36
Torzhok footwear factory	327,8	283,1	115,79
Donobuv, Rostov region	299,5	156,8	191,01
Egorevsk-obuv, Egorevsk	238,0	228,0	104,39
Oktyabrskiy leather-footwear plant	235,0	220,0	106,82
Kuznetzkobuv, Kuznetzk	231,5	227,4	101,8
Davlekanovskaya footwear factory	187,5	304,1	61,66
Belka Trade House, Moscow	184,0	-
Kalita, Kaluga	172,0	182,0	94,51
Westfalika, Novosibirsk	147,9	36,6	404,1
Parizhskaya Kommuna, Moscow	143,0	142,0	100,7
Ankar, Perm region	141,0	117,0	120,51
Tor, Tambov region	133,9	179,1	74,76
Spartak, Kazan	133,6	149,9	89,13
Obuvprom, Samara region	123,9	129,5	95,68
Magnitogorskaya footwear factory	123,5	130,5	94,64
Smolenskaya footwear factory, Smolensk	116,3	5,4	2153,7
Union of Vahrushy Enterprises, Vahrushy	115,9	63,0	183,97
Ryazanwest, Ryazan	113,7	145,7	78,04
Zarya Svobodi, Moscow	104,0	137,0	75,91
Kors, Novosibirsk	97,3	100,6	96,72
Muhanov footwear factory, Moscow	93,0	95,0	97,9
Basko Trade House, Kirov	70,3	48,5	144,95

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