LAHORE - Energy crisis especially in Punjab has caused historical damage to the third major foreign exchange earning leather industry, as electricity produced through generators has turned the sector uncompetitive not only in international markets but also within country.

Majority of tanning units are facing complete closures due to zero availability of gas and prolonged power breakdowns in the province, as use of furnace oil for boilers heating is unviable, industry representatives said on Friday.

They said that tanning industry is mother of leather sector and government may save this important industry by offering relief package up to 5pc as provided in Bangladesh and India so that industry could sustain to setback of power and gas loadshedding.

They added that instead of depending on IMF and foreign barrowings on much higher cost, government must patronise local export industry to meet its foreign exchange needs. He said foreign exchange earned through export generate employment in the country and is not returned to the IMF along with high interest and several conditionalities.

“The tanning industry is at the verge of its collapse and need government support for its survival,” they observed.

Pakistan Tanners Association Central Chairman Agha Saiddain said that in India financial support was provided to the tanning sector under 11th ILDP during the global recession. Under this scheme an amount of Rs 253.43 crore were provided to the tanning sector for technology up-gradation, modernisation and capacity creation and this amount was further enhanced to provide grant of Rs 5 million to SMEs in tanning sector and amount of Rs 20 million for large tanneries in India.

He further said that in addition to above announced special relief packages were offered such as 2 percent for Focus Market, 2 percent for Focus Product, and 2 percent subsidy on bank interest. India has announced 12 Indian Leather Development Plans whereas in Pakistan no such scheme was introduced. He said that few years before in 2009-10 government appointed M/S J.E. Austin as Consultant to develop Leather Strategy for Pakistan. The Consultant charged $1 million and submitted its report to the Ministry of Production and Ministry of Commerce.

He maintained that the Leather Strategy developed by the consultant who charged $1 million to the government was finally dumped in the Ministry of Production and nobody knows its fate. He expressed his deep disappointment on this and mentioned it the major reason for decline of this industry that is providing jobs to more than one million people directly and indirectly.