How To Start a Small Scale Tannery (Leather Processing Unit)

Starting a tannery or leather processing unit is a lucrative business in India. Here in this article, we intend to provide a detailed tannery business plan to the entrepreneurs who look for the same. Mainly, a tannery is a hide and skin processing unit that produce quality finished leathers. And leather products manufacturing companies are the major consumer of finished leather. Additionally, leather tanning is one of the traditional industries in India.

The livestock industry of our country is very promising. So the hide and skins are readily available here. And hide and skins are the major byproduct of the meat processing centers. Large animals are said to have “hides” (e.g. cowhide, buffalo hide) and smaller animals are said to have “skins” (e.g. goat skin,
sheep skin). However, Tamilnadu, West Bengal, Uttar Pradesh, Maharashtra, Punjab, Karnataka and Andhra Pradesh are the major leather producing states in India.

Most of the world output of leather is produced from cattle hides, goatskins and sheepskins. Hides and skins undergo a number of processing stages before a final product called finished leather is reached. According to your investment capacity and the raw material availability, you can initiate a tanning unit anywhere in the country.

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Tannery Market Potential

tannery

Source: Council For Leather Exports, India

Generally, the growth of the tannery business depends on the increasing demand for the finished leather. And the demand for the finished leather is increasing not only in the domestic market but also in the international market. India is the major leather exporter globally. The major exporting countries for the Indian Finished Leather are Germany, Italy, Hong Kong, Spain, USA, China, and Korea.

Additionally, there are several aspects boosting the growth of the industry. The availability of cheap labor, availability of good quality of hides and skins are the major reasons for the extensive growth of the leather industry. Additionally, the introduction of chrome tanning process and technical assistance from Central Leather Research Institute are boosting the growth.

The global demand for leather and leather products continues to increase day by day. In addition, there are several Government schemes for helping the entrepreneur in the leather industry. These schemes help to get the cooperation in marketing, export, and licensing factors.

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Tannery Business Compliances

Tannery or leather processing business demands different types of registrations and licenses from the Govt. authority. However, it also depends on the mode of operation. It is advisable to talk to a small business expert before commencing the business. Here, we put some of the basic requirements.

  • First of all, determine the form of your company and register the business. It is advisable, not to start a tannery business as a proprietorship. Because other forms of organizations help in securing funding and other cooperation from the several authorities.
  • Apply for the MSME Udyog Aadhaar online registration
  • Apply for Trade License from the Municipal authority.
  • In addition, you will need to have the permission from the Pollution Control Board. This is a very crucial aspect in this business. Generally, a leather processing unit produces both solid and liquid waste. And you must have an Effluent Treatment Plant to reduce the pollution.
  • Check the tax liabilities. Mainly, you will need to get the registration of P.Tax, TIN number, and VAT.

Related: Small Business Registration In India | Basic Guide

Tannery Setup & Machinery

Location selection is the most important factor in setting up the processing unit. It is advisable to start the tannery in an industrial zone. If you establish the unit in a domestic area then you probably face objection from the neighboring residents. Generally, a small scale tannery demands an area of 5000 Sq Ft built up area. Additionally, you must have the extra open sky premises within the unit.

In selecting the space, check the transportation facility and the availability of the skilled labors. In addition, electricity and water source are the major concern in establishing the leather processing unit. You may need to arrange a ground water supply arrangement for your factory.

Related: 14 Things To Consider In Selecting Factory Location 

Tannery Machinery 

You can start a leather processing unit by two ways. One is semi-automatic and another is fully automatic. However, it is advisable to start the unit as a fully-automatic basis. Also, procure the total plant from a reputed machinery manufacturer. Here we put a list of some basic requirements.

  • Drum with 5HP motor shaft pulley
  • Electrical Unit Heater for Stuffing Drum 5HP
  • Shaving Machine – single width
  • Electrical Hand Operated Setting Out Machine
  • Lace Cutting Machine
  • Spraying Machine with Dryer
  • Hydraulic Press
  • Brushing Machine with Dryer
  • Miscellaneous other equipment.

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Finished Leather Manufacturing Technology

Step I: 

First of all, you have to procure the wet blue skins from other plants. However, you can also procure raw hides and skins. After procuring, you have to classify the skin.

Step II: Re-tanning:

This involves re-treatment of wet blue skins, which are placed in drums.

Step III: Pre-finishing activities:

In this section, skins are “horsed up” (i.e., racked for a period of time set out), color dyed, stretched, dried using hot air, and then ironed.
Step IV: Finishing:

This involves classification and cutting (including sorting and trimming), spraying, and final conditioning. It includes staking, buffing, and milling. The latter operations are all carried out “dry”.

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Raw Materials For Tannery

The major required raw material is Wet Blue Hides. In addition, you have to procure Lacquer emulsions, Sodium bicarbonate, Sodium acetate, Formaldehyde and Dyes (different colors).

In addition, you have to hire employees for the operation. However, you have to hire the employees in the top level administration very carefully. A production manager and one finance head are the musts. Additionally, you can plan according to the size the output of your tannery.

  • About the Author:

Editorial Staff at NextWhatBusiness is a team of Business Consultants led by Rupak Chakrabarty.

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