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Leather and Shoes Industry in Iran

Leather is one of the most attractive and profitable industries and trades globally since it provides a significant added value.

Iran is one of the oldest leather producers in the world.

A look at the antiquities shows that the Iranians used leather to make shoes, clothes, and weapons around 1500 BC. From time immemorial, Iranian leather had always been welcomed due to its proper ecosystem, being located on the Silk Road, and the influential role in developing industry and trade in the region and also the world.

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Iran’s first leather factory was established in 1932 in Hamedan, and then in 1934, the second factory was opened in Tabriz. Since then, the industry has gradually developed, and the number of leather factories enlarged from a factory in 1932 to 22 factories in 1943.

In the 1960s and 1970s, tanneries and leather processing units mushroomed across Iran country. With the advent of the Islamic Revolution in 1979, the leather industry came to a sudden halt. At the present time, Iran attempts to promote its leather and shoes industry. However, it is struggling with some serious issues.

Leather-and-Shoes-Industry-in-Iran

Iran ranks twelfth in the world in shoes production, and 177 million pairs of shoes are produced annually in Iran. In terms of job creation, the shoes industry ranks fourth in Iran. Recent estimates show 60-65% of units operating in Iran’s footwear industry are medium and large-sized, while 30-35% are small-sized units. Tehran, East Azarbaijan, Khorasan Razavi, Isfahan, Qom, Zanjan, Alborz, and Qazvin are the leading footwear-production provinces in Iran.

Tabriz province is also known as the hub of the leather industry in Iran. Iraq, Afghanistan, Azerbaijan, and Russia are the main destinations of exporting Iranian footwear.
Due to the reasonable climatic conditions, Iran is one of the top 10 countries in leather raw materials. Raw cow and sheep leather of Iran has a desirable and exemplary quality compared to other countries. On the other hand, the per capita consumption of shoes, which is about 200 million pairs per year, can create significant employment.

SHOES

The strategic priorities of Iran’s shoes industry to accompany foreign markets are foreign joint ventures to maintain and develop domestic market share, fashion and branding and the creation of advanced distribution networks, strengthen industry clusters, export development, smart advertising to encourage people to use domestic products, reduction of production costs and the sales repayment period.

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The need to move towards innovation in model and design and attention to academic education is one of the shoemaking profession’s necessities. This profession is associated with expertness and art. The beauty of shoes in model, color, design, and sewing aspects can attract customers. In this regard, it is necessary to train the experienced workforce in the design process. Accordingly, students are currently being trained in this industry in several vocational schools across Iran country.

In the past, people learned this profession experimentally, while now they are classically learning it. It seems that Today’s youth pay less attention to the shoemaking profession while creating capital in this profession, and learning various training in this field can help the country’s economy.

BAZZAR

Leather in Iran is a high potential market in which entrepreneurs can work in various fields of design, production, marketing, sales, and after-sales services. Now, the export of one leather jacket is five times profitable than the export of one oil barrel. Iran is among the top three countries in the leather production and export of semi-finished products. Leather produced in Iran ranks third in the world in terms of quantity and quality.

However, some Industry experts consider Iranian sheepskin as the best leather in the world. They believe that Iranian sheep have large rumps. Therefore, all the skin fat is absorbed by the sheep’s rumps, and it is easier to process. Moreover, wet skin does not smell bad.

Regarding the quality of Iranian leather, it should be said that the best cow and goat leather belongs to areas with dry climates, because in this case, the skin suffers from fewer scratches and animal diseases. The best sheep leather belongs to the Moghan plain and its surroundings in Iran.

Leather-and-Shoes-Industry-in-Iran

The majority of the leather garment market is currently held by Italy and Turkey. Italy is the capital of European fashionistas and one of the prominent producers of luxury leather products in the world. Turkey ranks second in the leather industry after Italy. Interestingly, 80% of Iran’s sheepskin and 20% of Iran’s goatskin export to these countries. Like crude oil, Iran is the largest seller of light leather in the world.

Most of Iran’s leather exports are in the raw form, due to the lack of infrastructure, the limitation of technical facilities, and deprivation of modern technology that weaken Iranian leather production. In the meantime, the raw exported materials return to their homeland in a fantasy form and multiplied prices. Thus, while losing national capital, the sale of raw leather created many job opportunities for other countries. In return, Iranian experienced local artisans of leather products cannot pass the experience effectively to future makers.

The production process from raw materials to leather and finished products reveals that Iran is well known in the raw materials market. However, when it comes to finished products, its presence in international markets is not substantial. The problem is that the production chain is not complete.

Leather-and-Shoes-Industry-in-Iran

Part of the chain, including shoe soles, buckles, other accessories, various leather goods, and leather garments, is not produced domestically on a large scale. The incomplete production chain leads to the increased value-added products and raw material sales and the recession in the domestic market, along with the export market downturn and lack of attention to branding in leather products.

If the problems of liquidity, added value, and equipping of machines are solved, the quality of Iranian products will be much greater, and with such products, there will be no need to import leather goods. Smuggling imports have also caused a lot of damage to the Iranian leather industry.

The profit from smuggling is far better than production, and smuggling, whether organized or otherwise, has always harmed the shoe and leather industry in Iran. However, in the last two years, the exchange rate difference has made the majority of smuggled imports no longer profitable. It is necessary to focus on efforts to create added value and make luxury products in order to promote the Iranian shoe and leather industry.

SHOES

In recent decades, investment in upgrading technology in the Iranian leather and shoe industry has declined. Thus, this industry faced a severe challenge due to backwardness in modern technology and reduced competition in the export market. At the same time, Iran is also facing the acute problem of selling raw leather. Machinery wear and the lack of new technologies, especially in optimizing water consumption and environmental issues, are some of the leather industry’s problems.

Lack of capital liquidity among employers, customs problems, and lack of necessary cooperation for the clearance of goods and importing devices are considered obstacles to upgrading machines. The Iranian leather industry can surpass other countries by upgrading machines and specialized human resources training. However, at the same time, and due to the sanctions and the mentioned problems of this industry, Iranian leather companies are operating alongside many major countries in leather production.

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