We cannot ignore the likelihood of retraction

It is fallacious the argument that the export of wet blue affect the domestic supply.

 

COUROBUSINESS interviews the businessman Emilio Bittar, director of the company COMING, headquartered in the State of Goias . He talks about the prospects for 2009, the taxation of Wet Blue and about the National Forum for Studies and Research of Competitiveness of Leather.

According to Emilio Bittar, the taxation of Wet Blue is an inexcusable mistake that needs to be corrected.

 

 

 

 

 

CB - What are the prospects for 2009?

 

Emílio Bittar – There is a strong expectation regarding the business performance especially in the first half of 2009. The possibility of retraction both in the domestic market as in the external is not negligible. The internal market, however, could take advantage of the crisis and, depending on the price of the leather, it could even be higher in the second half of next year.

CB – The dollar costing R$ 2.50 could promote export, couldn't it?

 

Emílio Bittar   – No doubt, if it would stay in such level it would be an important aspect, but even so, quantitatively there is a reduction trend. There was a significant decrease in demand due to the real estate crisis that affected the U.S. padding market. The sale of leather for car industry also tends to decrease, depending on the crisis of American automakers. But the setting is still very foggy. At the end of the first quarter of 2009 it may be possible to get a more accurate picture of what will be in 2009.

 

CB – You have been fighting against the taxation of Wet Blue. How do you see such problem in the current framework?

 

Emílio Bittar - In the 20 countries that impose some sort of restriction on leather export, only three impose restrictions on Wet Blue - two by means of taxation ( Argentina and India ) and by a prohibition, Nigeria . The others ones impose restrictions on Salted leather export (primary stage), of which Brazilian export is not relevant. None of these countries has a good market for comparison with Brazil . The restriction of Wet Blue exports, in the current context, has no sense.

 

CB – Without the taxation of Wet Blue, is there any risk in the supply of leather for Brazilian footwear industry?

 

Emílio Bittar   - This argument was never true. And what is worse, is that it has been currently used, repeatedly, and it has been the basis for the government to maintain the tax. Because of such repetition, the Association that represents the footwear industry, even knowing that it is not true, has convinced technicians and government authorities. But it is a fallacy. What the industry does not speak is that such discussion began when 80% of the exported footwear was leather. In 2007, this number reduced to 42%. And it will decrease in the end of 2008. But whatever the case, despite the direct export of leather (leather only) that earns US$ 2 billion per year to the country, there is still a high quantity of leather in Brazil. In the years 2006 and 2007, for example, for a slaughter of about 44 million units, in addition to the leather imported by footwear companies, less the direct export of leather and export of leather via footwear, the result is a leftover unused (lost) of about 3 and 4 million hides. These are effective losses after the complete supply of the demand of the footwear industries. Saying that the leather export affects the domestic supply is a false argument of those who can no longer defend the idea that led the federal government to the mistake of taxing the Wet Blue export.

 

CB – You presented yourself in the meeting of the CNPC – National Council of Livestock Cutting, in the month of December, as Coordinator of the National Forum for Studies and Research of Competitiveness of Leather. Is this Forum a new segment Entity?

 

Emílio Bittar – Absolutely not. The Forum brings together companies and entities from all over Brazil and from other segments in a broad and democratic way, interested in opening a frank debate about the competitiveness of domestic leather, including the taxation of Wet Blue , in order to offer grants and information to those who are responsible for the segment public policy. Many companies and entities are and will remain affiliated to the Center of Tannery Industries of Brazil, but they do not feel represented in other environments, such as the Parliamentary Front which acts on behalf of the segment in the National Congress. The Forum is a positive initiative.

 

 

Revista Courobusiness, Edição 61 – nov/dez 2008.