The Thai Leathergoods Association will once again petition the Federation of Thai Industries (FTI) to lower the duty on imported raw leather from the current 5-20 per cent to as low as zero, in order to increase the global competitiveness of local manufacturers before free-trade agreements take effect.

Association president David Chiu yesterday said the request would be included in its road map, which will be sent to the FTI early next year.

This will be the second time the association has sent such a request. It initially asked the FTI to lower taxes a few months ago, but has not received a response.

Chiu said that if import duties were decreased, annual export growth would jump from 2-3 per cent currently to as much as 10 per cent.

He said free-trade agreements would lead to cut-throat competition between Thai and foreign makers of leather goods.

Having to pay the current import duty alongside this will present a major obstacle for domestic manufacturers.

While waiting for an answer to its request, the association is arranging many activities to help increase the competitiveness of its members, including an open-house activity every two months where industry experts share their knowledge.

Chiu said local leatherwear manufacturers had been able to increase the quality of their goods to almost equal that of Italian manufacturers, while keeping their prices about 50 per cent lower. He said one indicator of success had come from European leather importers who, after importing heavily from China, have now begun to purchase from Thailand.

"They told me Thailand had become their country of interest because of our product quality and creative designs, while China mainly produces imitation products," said Chiu.

In the first nine months of the year, Thai leather-goods exports to the Netherlands increased 37.3 per cent, those to Italy rose 30.4 per cent, exports to France increased 21.3 per cent, and sales to Belgium were 12.9 per cent higher.

Yet Thai manufacturers still need to improve their production technology and keep up with global trends, said Chiu. To this end, some have purchased Italian production technology and learned production and marketing techniques from Italian experts.

Export Promotion Department  deputy director-general Kunyaphan Raengkhum estimated the value of Thai leather exports would reach US$1.8 billion (Bt66.1 billion) this year, up from $1.56 billion last year. Exports for the first nine months were valued at $1.18 billion.

The top five importers of Thai leather are the United States, Hong Kong, Belgium, Japan and the United Kingdom.

Meanwhile, the Thai Leathergoods Association will cooperate with the Export Promotion Department to hold the Thai Leathergoods Week from November 10-19.

More than 100 brands of leather products will be sold at the fair at prices 20-80 per cent below retail. Chiu estimates the event will attract 30,000 shoppers per day and generate Bt20 million in sales.

Nitida Asawanipont

The Nation