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Eco Leather production in Apex Group Ltd. A contemporary business case Student Name Md. Mostain Belal ID Number 1235325 Topic Area Environmental Issue Project Title Production of Eco Leather by using the latest Technology in Apex Tannery Ltd. Introduction Background to the Project Leather is created by tanning hides and skins of animals; primarily cattle hide. Generally tanning (series of chemical operation) of leather involves using heavy metals like chrome which is later on discharged in the rivers near the tanneries polluting the water and soil causing hazardous intoxications to the human beings, nd environment around.

Ecological leather is the most advanced in respect to environmental protection. It is chrome free leather tanned using only organic compounds. Apex Tannery Ltd has been setting industry standards in Bangladesh leather export industry since 1976, equipped with the state of the art Italian modern machinery and maintaining high quality strictness. Through the years, its production has been production exceeds 23 million square meters and company sales turnover amounts to over IJS$30 million, thus creating an exemplary model for corporate development in the tannery sector.

They have been producing a range of products for example, cow full chrome, cow semi chrome, cow vegetable, goat full chrome, goat semi chrome and also various types of finished leathers for shoes and leather goods. Most of these products are being produced by using the conventional Chrome Tanning Method which is solely the indication of environmental hazards as well as the final product. The todays world has become more concerned about the Global Warming and consequently the Governments and other environmental organisations especially in the developed countries are emphasizing to use the Eco friendly products.

For xample, to help customers go green on a budget TESCO (retail company in UK) offers revolutionary E12 ‘E-leather’ women’s shoes. Some recent research and articles have shown that the use of environmentally friendly materials and fair-trade and ethical production standards is likely to become mainstream in the next decade in the Global apparel sector as the industry experts predict. The C cover story has recently published that this year suppliers aim to give more environmentally benign products and processes to leather industry. Mr. Celet, General Manager of the Turkey based DESA, observes the current trends in leather.

He states that eco-leather would make an entry into the market in a big way. He remarks, “The current fashion trend in leather apparel industry is towards more natural and casual looks. Another upcoming trend is the ecological leather, which has a potential to become a major opportunity for many tanneries, if the industry manages to set international criteria defining this product range”. Considering the recent trend, environmental impact and demand for E-leather in the Global Leather Market, Apex Tannery Ltd has introduced a new project (Six months duration) for launching a new product “E-Leather” by using its internal strategic tools

SWOT, PESTLE and cost Benefit Analysts. (Eco Production Wet blue discarded by tanneries is ground to produce leather fibre then combined with high performance core using the power of water. Pigmentation and coating are added to produce composition leather. Stringent testing and performance control throughout the eco friendly manufacturing process which uses recycled water, thermally oxidized gases and low energy plant. ) Aim of the Project To introduce the latest technology in E- Leather Manufacturing Producing the skilled Leather Technologist.

To increase the Product range Meet up the demand for fashion oriented people To minimize the ecological footprint during the manufacturing process. To maintain the high quality of product internationally. Justifications Luxury leather products always lead the avant grade of 3fashion compromising with the traditional craftsmanship. Ecological leather is still the same leather, but is manufactured driven by the conviction of controlling the green house effect as a major ecological issue with less or no impact to the environment.

All the materials used in the tanning and finishing process are fully biodegradable. It is manufactured by using alternative and renewable sources of energy, equipment, and chemicals pplying the latest technology in leather manufacturing. From this point of view I think my proposed topic is an appropriate one. Leather goods are now no longer restricted to Jackets, coats, belts and boots. Many other fashion accessories are also manufactured with leather attracting a lot of attention in the market.

Due to their durability and high glam quotient, fashion designers feel it is essential to have a leather Jacket or boots. Designer leather items are hitting the runways and ramp shows in a big way. They give better value for money in the long run. Various products such as trench coats, halters, bags, andbags, and upholstery can be manufactured using the eco friendly leather. Mr. Burak Celet, General Manager of the Turkey based DESA, in an exclusive interview with Fibre2Fashion expresses his views about the global leather industry.

He says, “We are convinced that the leather apparel business is a global business. However, it is a challenge to present it as a standalone retail concept. Therefore, we deem it to be necessary to have complimentary products in the range in order to minimize the seasonality effect”. Synthetic blends (conventional tanning) of leather products will lower the production osts. But they are likely to cause ecological damage as most of them are not biodegradable. Ecological leather focuses on the tanning process, and hence these products enhance the skin with beautiful textures, and finishes.

So, by utilizing the latest technology, available raw materials and cheap labour, Apex Tannery Ltd will able to produce the E-Leather and can compete with other leather producing countries especially China, India, Italy, and Japan. Throughout this project the Company will be able – To maximize its annual turnover To compete in the world leather market To make best quality leather To maximize its annual profit To make skilled manpower To contribute the national economy To create a new market for E- Leather niche for itself in the fashion industry.

Ecological leather provides the market with products that posses high demand performance, and also minimizes the ecological footprint during the manufacturing process. By completing this Project I will be able To make a new Product Development Project in future To handle a new Project in my practical Job To make some Project Management strategy myself To make the effective plan To understand the effective use of Gantt chart. Outcomes 1 Identify the development of a new product in terms of overall profitability. Objective 1 To develop a business case for a new Product built upon recent research.

Activities: Background to the project (already discussed) Justifications (already discussed) Deliverables: A well developed business case for a new product “E-Leather” based on the recent research. Objective 2 To review current theoretical debate that supports this business case. Supporting evidence with discussion: The essence of E- Leather and its impact, overall profitability throughout the world has become a crucial issue that can be seen n recent news published by Leather International Magazine and it also has been focused on many tanneries producing E-Leather.

Some important link can be taken revolution Eco Trends Conference Adidas speak at Eco Trends in Leather Conference Government backs CLIA’s Eco leather Mark BASF focus on eco friendly products Growing interest in Greener Leather New approach for processing Eco friendly Garment Leather According to the E Leather Group, Peterborough, I-JK, the principle advantage of Eco Leather are: Eco friendly Substantially less chemicals 50% less C02 emission 95% recycled water in process 50% to 70% natural gas usages

Less Landfill usages No adhesives in textile core The E-Leather Group has been successfully producing a wide range of Eco products. Considering all the recent report and other successful innovation, the Apex Tannery Ltd has taken an initiative to produce Eco Leather by maintaining the international standards. Delivering the supporting evidence that support the proposed Proposal. Objective 3 To incorporate into this business case information on market competitivity and activity.

Market Research and Discussion: To remain competitive in the world leather market in the long term, leather manufacturers in Bangladesh must need ecological equirements because of the growing awareness about the green product especially among the European countries who are the major leather importers from this country. According to the recent research, the consequent development of ecological leather finishing is being driven by the following forces: * The society consumes more carefully.

Traces of toxic substances in food or products for the daily life are under everyday discussion * Public discussion about toxic residues in products does harm to the (chemical) industry. The consequent removal of risky substances is an opportunity for the chemical industry for better marketing in the sense of esponsible care * Further development and chemical analysis has set down limiting values * New toxicological research leads to a new valuation of previously widely process will follow.

For example, the discussion about the carcinogen aryl amines in leather dyes has resulted in reducing the limits to the lowest possible analytical levels. The concept of market trend for Eco Leather production can be assumed through some of the following facts and fgures: ISA Tan Tech celebrate opening of new eco Tannery New Eco Tannery in Saigon E-Leather wins Kiwirail Leather Contract Eco efficiency for competitiveness China is the biggest supplier of leather products to the US and Europe. Slovenia (II-JV Tannery) is now producing Eco Leather.

E-Leather, Peterborough, I-JK is producing eco leather in a wide range. LANXESS (Germany Company) have put a stringent policy and product stewardship initiatives in place in order to ensure that all products are in accordance with environmental regulations as well as to help the leather industry get through the Jungle of restricted substances lists (RSLs) and reaching the multiple targets of set specifications. The International Union of the Leather Technicians and Chemists Societies (IULTCS) eported that: In recent years leather has lost a lot of markets and market share without creating any really new markets.

There is also the risk of a loss of credibility when used in certain markets as a commodity. The majority of tanneries are SMEs who are convinced of their skills and know how, but with a general lack of global strategic vision and marketing approach. The leather industry sector is too small and fragmented to Justify big resource allocations for R&D by the suppliers and the dedicated Leather Research Centres are also generally small and spread around the world.

Competitive Advantages 5 audits have been undertaken since 2008 in the following countries: Brazil Dominican Republic China India Mexico Netherlands Taiwan Thailand USA Vietnam Considering the above discussion on recent market research, its clear that todays world leather market is firmly concerned about the eco friendly leather products and some countries has already started to work on it and others are going to do as a consequence. As the demand for Eco Leather is growing day by day and there exists little competition in the world market, it is the best time to implement a project for Eco leather production.

Why I have chosen Apex Tannery Ltd, Bangladesh for Eco Leather Production? Because- The company has been equipped by modern IT System affiliated by ISO 9001-2000 in Quality Management System (QMS) The tannery is going to be relocated in Savar ( Leather Industrial Area) where the water treatment plant is proposed. Dealing business with both national and international countries. Available Experienced Leather Technologists qualified from Bangladesh College of Leather Technology (BCLT) Sufficient (Hides and skins) raw materials in Bangladesh Low labour cost.

Support from worldwide recognized chemical company e. . , CLARIANT and BASF. Outcome 2 Calculate, Agree and Plan for the necessary resources required for the Project Objective 4 To identify and cost all materials, equipment, labour and other resources required for developing the product Activities Costing of Materials and other resources: The tannery has already got a well set of materials and equipments, it has Just to be purchased a High Pressure Water Jet Machine which is considered the main equipment for Eco leather production.

The estimated cost for High Pressure Water Jet Machine is E2000 The estimated maintenance cost for this machine will be (E50 er monthx6months) = ?‚¬300 Material handling cost (E20 per month x 6months) = E120 The overall estimated cost for other equipments (which already exist in the company) e. g.

Splitting Machine, Chemical Bath etc will be approximately (E50 per month x6 months) = E300 It is estimated that the company will produce 1000sq-ft Eco leather per day i. e. (1000 x 180) = 180000 sq-ft within 6months the project time. The estimated total cost of raw materials (raw hides and skins) will be ( 18000 sq-ft xEO. 5 per sq-ft The estimated cost for essential organic chemicals will be approximately E6000.

The salary of the Project Manager will be (E500 per month x 6 months) = E3000 The salary of the Production Manager will be ( E400 per months x6months) = E2400 The salary of the Assistance Production Manager will be (E350 per month x 6months) = E2100 The salary of the Chief Leather Technologist will be (E450 per month x 6months) = E2700 The total salary of two Assistant Leather Technologist will be {(E400 per month per personx 2)=E800 per month x 6month} =E1400 The salary of the three Supervisors will be {(E250x3) =E750 per month x 6months} – E4500 The wages of 10 labour will be {(E30 per month per labour x 10)= ?‚¬300 per onth x 6months F E1800 Delivering all the material and equipment costs required which may be used for the Objective 5 To identify and cost the training and development of staff required. Cost for training and development: The Chief Leather Technologist and Assistant Leather Technologist will have to be trained up on Ecological production for two weeks from BLC (British Leather Technology Centre) which will cost approximately E6000. Delivering the estimated cost for the training of staffs which may be used for the financial forecasting.

Objectives 6 To identify sources of all resources required Identify the sources of resources: Raw materials from local market. Labour from local area Heavvy machineries can be leased from local tannery. Funding 40% capital from company’s yearly interest 20% capital from ordinary share of Apex Group. 10% Delay payment to the creditors 30% Bank overdraft Deliverables A rough overview of financial appraisal for the proposed project. Outcomes 3 Plan and agree the implementation of the product and the measures for monitoring and evaluating success. To plan and agree the time scale for management and implementation of the project Time Scales for Proposed Project Management

Completion of feasibility report within 14 days Developing business case within 35days Market research and competitivity within 42days Making a complete financial appraisal within 21 days Pre production planning within 14days Planning and implementing the market strategy within 49days. Delivering a Gantt chart showing the time frame for each and every task. (See the appendix) Objective 8 To plan and develop an appropriate marketing strategy for implementing the project Developing appropriate marketing strategy: Strategic Advertisement Advertisement through national media for growing the awareness for using the cological leather goods Exciting advertisement through company’s existing website To participate in International Leather Fair Publishing as breaking news in the Leather International Magazine.

Direct advertising or make a proposal to the world renowned Brand e. g. Nike, Addidas, Puma to become as a client as they are showing keen eager to use eco product now a days. Increasing the international clients within the next two years. The market can be segmented by two groups, one is local and the other is International. Because of recent credit crunch the economic climate has gone down in Bangladesh. That’s why t is the best time to concentrate on its production by using the available resources whereas the global warming has become the crucial issue today. Bangladeshi leather market will be able to differentiate itself to be best combat competition only because of its available raw materials and labour.

The main barrier to entry into the new market place (world market) is marked as lack of communication (both visual and verbal), capital, technology, skilled employee and legal legislation. So we need to remove these barriers as early as possible. Delivering the strong strategies to accelerate the project and to achieve the goal of he project as well. Objective 9 To develop appropriate measures to monitor and evaluate progress. Tools for measuring progress: Conducting meeting in every month with project manager, Production Manager and Chief Leather Technologist. Weekly report presented by Project Team Leader Introducing the ‘performance appraisal technique’ for the employees involved in this project. To look at the base line of the Gantt chart to evaluate the actual progress the work.

Introducing and explanation of the tools which will be used to measure the progress of the project Conclusion: The concurrent market research on eco leather over the whole world has shown a potential especially for the growing leather industries in the world. Having the available raw materials and manpower, Apex Tannery Ltd in Bangladesh, has taken a six months long project for eco leather production. The each and every step for progressing of the project, the company, has planed to exploit the most experienced project manager, team leader and the most experienced leather technologists as well. The company has also undertaken some contingency plan on which some alternative future has been taken into consideration for this project.

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