Tata International inks JV with GST Autoleather

With an eye on capturing an untapped market for automotive leather, Tata International

has formed a joint venture with Michigan-based GST Autoleather. It will supply automotive leather to OEMs in India in the coming years aiming to achieve a revenue target of over Rs 200 crores from the segment in the next three years. It has plans of venturing into the branded footwear segment with three brands for men and one for women.

Currently, the need of this segment is being fulfilled by importing automotive leather from overseas, despite the country being a significant producer of leather and leather products. The depreciation of the rupee and subsequent increase in import costs has opened up opportunities for the Indian leather product manufacturers. Tata International has been an exporter of finished leather to those manufacturing automotive upholstery, furniture and lifestyle products and also to manufacturers of footwear, jackets and accessories.

The company also has plans to double its finished leather production from about 3.5 million square feet a month to 6.8 million square feet in the next three years. About 60 percent of its production at the fashion leather manufacturing unit in Dewas in Madhya Pradesh is exported to Europe and Asia. The current revenue from this business is about Rs 360 crores.

The leather industry in India is considered among the top 10 forex earners growing at a compounded annual growth rate (CAGR) of about 8.22 percent.