Economy, Domestic Economy

Synthetic Leather Production Lucrative

Synthetic Leather Production Lucrative
Synthetic Leather Production Lucrative

Leather is one of the oldest materials used in the manufacture of different articles of clothing and upholstery. Its durability and flexibility, as well as the air of prestige it carries, have enabled it to be produced in a wide variety of types, finding its place among fashion-forward consumers.

Genuine leather items, although nearly always in demand among the upper middle class, have faced the opposition of environmental and animal rights advocates in recent years. It has also given rise to environmental concerns over the pollution caused by leather processing factories.

Enter the industry of synthetic leather production, in which no animals are harmed and a considerably less amount of pollution is caused. It also boasts other advantages over genuine leather.

Synthetic leather is considerably easier to cut and sew compared to genuine leather. It can also be mixed with a wide variety of other materials to achieve different levels of durability and thickness. It can be dyed to almost any color, patterns resembling those of genuine leather and costs roughly one fifth of genuine leather goods.

The Persian daily Forsat-e Emrooz recently published a report on the production of synthetic leather in Iran and the sector’s investment potential.

The production of synthetic leather in Iran can be a highly lucrative business, as according to the report, only 28% of domestic leather market constitute items made from real leather while the rest is dominated by synthetic leather products, which demonstrates its considerable potential.

  Production Process, Investment

Synthetic leather is a multilayered sheet made of foam, glue, lining fabrics and a certain amount of skin and hide. The two main types of synthetic leather are PVC (polyvinyl chloride), which is made by adding plasticizers and dye to PVC to make a flexible fabric in a natural color, and PU (polyurethane). The latter is much more widely used and is made by coating cotton or polyester with a polymer, which makes the synthetic leather breathable, ideal when used in garments.

 It is then treated to look like real animal hide with patterns printed over it and dyed to the desired color.

In order to set up a plant with a production capacity of 2,000 tons per year, a piece of land with an area of about 6,000 square meters is required, which will have a warehouse for raw materials and the finished product, offices and a laboratory. This will cost close to $147,000.

The cost of purchasing the machinery will differ based on their quality. Setting up a production line with domestically manufactured machinery will cost about $588,000, while Italian or German machinery will cost double this figure.

Furthermore, some $294,000 should be set aside as working capital.

Finally, 15 employees, including a production manager, production supervisor, lab manager, accountant and sales manager, are needed.

All the required permits can be acquired from the Ministry of Industries, Mining and Trade.

  Domestic Market

According to a player of the industry, Ahmad Reza Khazaei, the synthetic leather market in Iran has good potential, as the raw materials and the machinery, whether domestic or foreign, can be purchased with no hassle.

Based the Iran Customs Administration’s statistics, close to $15.2 million worth of synthetic leather were imported in the last Iranian year (ended March 20, 2015), while only $117,000 worth of this commodity were exported during the same period.

Khazaei, who is a synthetic leather production machinery expert, said, “Many large players of the industry are expanding their production lines and intend to purchase new and modern machinery, which indicates Iran’s rising demand for synthetic leather.”