“Stricter than in Germany”

The tanning industry is considered particularly harmful to the environment. In China and Vietnam, German investors are showing how its ecological impact can be reduced. They want their TanTec Group to become the international standard for sustainable leather production, as Uwe Hutzler, the general manager, told Hans Dembowski in an interview.

Interview with Uwe Hutzler
Occupational health must be safeguarded: worker at Saigon TanTec Dembowski Occupational health must be safeguarded: worker at Saigon TanTec

What does it mean if a product is LITE certified?
LITE stands for “low impact to the environment”. It is a registered trademark of TanTec and indicates that a product is manufactured with particularly low use of energy and water, and low carbon emissions. The rates are defined by the international Leather Working Group (LWG), and they are the industry benchmark. The LWG evaluates resource consumption in the tanning industry and awards LITE certificates. Compared with the industry average, the TanTec Group uses 42 % less energy and 56 % less water. Our carbon emissions are 35 % below the industry average.

And this is documented in detail?
Yes, it is. For all LITE leather, a special report must be compiled that documents the product’s environmental impact and compares these values with the benchmark. Accordingly, customers of LITE leather can distinguish themselves from competitors, which helps to market their goods. Our ultimate goal is to establish a new standard for the tanning industry that will pave the way for sustainable and environmentally-friendly production all over the world.

Which tanneries have been awarded LITE certification so far?
Both TanTec production facilities in China and Vietnam were built according to sustainability criteria and both are being modernised continuously. Our newest production facility in Mississippi is also being built in an environmentally sound manner.

Who buys LITE-certified leather?
Our biggest customers include manufacturers of brand-name shoes like Timberland, Deckers, Keen, The North Face and Reef. The Wolverine Group, which owns brands such as Hush Puppies, Caterpillar, Merrell and Harley Davidson, also uses LITE leather. These companies are keen on a green reputation, because that is part of their public-relations strategy. They are also aware of the merits of sustainable leather production.

How did the LITE benchmarks come about?
We developed them step-by-step. Our desire is to manufacture our products in the most sustainable manner possible and thus improve our competitiveness in the market.

Competitiveness is basically about prices. In what sense does eco-friendly production matter?
In the premium shoe market, it is no longer enough to simply offer customers a well-designed product. Nowadays, the right background is needed too. Particularly in the US and the EU, customers are paying increasing attention to a product’s history and its manufacturing process. They are interested in issues such as the traceability of the raw materials, the treatment of waste, emissions, energy consumption and workers’ rights. Child labour must be avoided. Moreover, overtime hours must be limited, and manufacturers must ensure the occupational health and safety of their employees, and so on. Modern shoe brands like Timberland understood this trend early on, and positioned themselves strategically. They insist on annual audits and want suppliers to re-evaluate their production methods and update requirements. On the other hand, investments in sustainable production methods bring long-term economic benefits, lower energy expenditure, for instance.

What support did you get from German development agencies?
The German Investment Corporation (DEG), a subsidiary of KfW that promotes private-sector investment in developing countries, has supported our sustainability strategy with loans and grants for years, helping us to finance and implement environmental projects. Obviously, the progress of these projects is documented in detail. Thanks to the DEG, both TanTec production sites were equipped with solar-heating systems, waste-water recycling systems and biomass boilers. We were also able to research ways to recycle chromium-contaminated by-products of the tanning process.

Tanning is considered a dirty industry for low-wage countries. Nevertheless, it has become difficult to find locations for new production facilities in China or Vietnam even for manufacturers like you, who are interested in sustainability. Why is that?
The tanning industry basically follows the value chain. Facilities should be in close proximity to the shoe factories, so they are set up in the respective countries. In recent years, however, China has become increasingly concerned about air and water pollution and soil degradation. The People’s Republic has become the largest emitter of greenhouse gases, even ahead of the USA. In order to stop the trend, China is tightening environmental regulations, some of which are now even stricter than in Germany. More and more Asian countries are following China’s example, in particular Vietnam. As a result, companies have moved abroad or have been forced to close because they did not comply with the new rules.

Is it true that South Asia has not kept pace with this development?
It is true that economic growth is still often pursued at the expense of social and environmental indicators in South Asia.

However, you also see opportunities to start manufacturing in industrialised countries again – you just mentioned that you’re planning to open a facility in Mississippi. What is the background?
We are actually beyond the planning stage. All equipment has been ordered and is being shipped to the USA. We’ll start producing leather in January 2015. We are following the trend in the shoe industry. Manufacturers are increasingly shifting production from Asia to the Americas. Countries like the Dominican Republic, Mexico, Honduras and El Salvador are becoming important, and, at some point, Cuba certainly will. The sites are closer to the North American market, so the value chains are shorter. By producing in Mississippi, moreover, we’ll even be able to promote the most recent “Made in the USA” trend.

What environmental issues do your suppliers still face?
Our raw material is called “wet blue”: it is chrome-tanned leather that is not dried, nor has it been dyed or otherwise processed. One of our suppliers’ biggest problems is removing residual chromium and salts from the waste water. However, all of our suppliers are LWG certified and meet the strictest requirements for sustainable production, including for waste-water treatment. Furthermore, tracing the origin of the raw materials is becoming increasingly important. In order to receive the best LWG rating, upstream suppliers have to be certified too. Raw materials must not be sourced from dubious suppliers. One consequence is that we import our hides from Brazil and the USA. In Asia, it would be impossible to prove that the animals were treated humanely – which is something our customers increasingly insist on.

Uwe Hutzler is the general manager of the TanTec parent company ISA TANTEC LTD in Macao, China. The group’s sustainability strategy is supported by the DEG. www.liteleather.com

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