How To Start a Tannery Business (Leather Processing Unit) – Complete Guide

Tanneries or leather processing unitis play a crucial role in the leather industry, transforming raw animal hides into durable leather products used in various applications such as footwear, apparel, accessories, and upholstery. If you’re considering venturing into the tannery business in India, here’s a step-by-step guide to help you navigate the process effectively.

The livestock industry in our country is very promising. So the hide and skins are readily available here. And hide and skins are the major byproduct of meat processing centers. As per this report, the leather industry in India accounts for around 13% of the world’s leather production of hides/skins and handles a robust annual production of about 3 bn sq. ft. of leather. In addition, The country accounts for 9% of the world’s footwear production.

10 Steps to Start a Tannery Business in India

1. Conduct Market Research

Before diving into the tannery business, conduct thorough market research to understand the demand for leather products, industry trends, competition, and regulatory requirements. Identify potential customers, suppliers, and distribution channels to gauge market opportunities and challenges.

2. Develop a Business Plan

Draft a comprehensive business plan outlining your tannery’s objectives, target market, product offerings, operational strategies, marketing approach, and financial projections. A well-defined business plan serves as a roadmap for your venture and facilitates decision-making and resource allocation.

3. Obtain Necessary Licenses and Permits

To operate a tannery business in India, you’ll need to obtain various licenses and permits from regulatory authorities such as the Pollution Control Board, Directorate General of Foreign Trade (DGFT), State Pollution Control Board (SPCB), and local municipal corporation.

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 several authorities.
• Apply for the MSME Udyog Aadhaar online registration
• Apply for a Trade License from the Municipal authority.
• In addition, you will need to have permission from the Pollution Control Board. This is a very crucial aspect of this business. Generally, a leather processing unit produces both solid and liquid waste. And you must have an Effluent Treatment Plant to reduce pollution.
• Check the tax liabilities. GST registration is a must in India at present to carry out a manufacturing business.
• Tannery Setup & Machinery

4. Secure Funding

Assess your financial requirements and explore funding options to finance your tannery business. You may consider self-funding, bank loans, venture capital, government schemes, or partnerships with investors. Prepare a detailed financial plan and budget to estimate startup costs, working capital needs, and potential return on investment.

5. Acquire Suitable Premises

Select a suitable location for your tannery with access to necessary infrastructure such as water supply, electricity, transportation, and waste disposal facilities. Ensure compliance with zoning regulations and environmental norms to mitigate potential risks and legal issues.

It is advisable to start the tannery in an industrial zone. If you establish the unit in a domestic area then you probably face objections 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.

6. Set Up Tanning Facilities

Invest in modern tanning equipment, machinery, and technology to streamline the tanning process and improve efficiency and productivity. Designate separate areas for raw material storage, soaking, liming, fleshing, tanning, dyeing, finishing, and quality control to maintain workflow and hygiene standards.

7. Buy Machinery

You can start a leather processing unit in two ways. One is semi-automatic and the other is fully automatic. However, it is advisable to start the unit on 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.

8. Source Raw Materials

Establish reliable supply chains for sourcing quality raw materials such as animal hides and skins from authorized suppliers, slaughterhouses, and livestock markets. Ensure adherence to ethical and sustainable practices in sourcing raw materials to maintain product quality and compliance with regulations.

Read: Top Small Manufacturing Business Ideas

9. Implement Quality Control Measures

Implement stringent quality control measures at every stage of the tanning process to ensure the production of high-quality leather products. Conduct regular inspections, testing, and analysis to monitor product quality, consistency, and compliance with industry standards and customer specifications.

10. Develop Marketing and Distribution Channels

Develop a marketing strategy to promote your tannery’s products and services through various channels such as online platforms, trade fairs, exhibitions, and industry associations. Build relationships with leather manufacturers, wholesalers, retailers, and exporters to expand your market reach and distribution network.

Frequently Asked Questions

What is the tanning process, and how does it work in a tannery?

The tanning process involves treating raw animal hides or skins with tanning agents to convert them into durable leather. It typically includes stages such as soaking, liming, fleshing, tanning, dyeing, and finishing to remove hair, fats, and proteins from the hides and impart desired properties to the leather.

What are the environmental concerns associated with tannery operations, and how can they be addressed?

Tannery operations have environmental implications due to the use of chemicals, wastewater discharge, and solid waste generation. To address environmental concerns, tanneries must implement pollution control measures, wastewater treatment systems, and sustainable practices to minimize pollution and comply with regulatory standards.

What are the regulatory requirements for setting up a tannery in India?

To set up a tannery in India, entrepreneurs need to obtain various licenses and permits from regulatory authorities such as the Pollution Control Board, the Directorate General of Foreign Trade (DGFT), and local municipal corporations. Compliance with environmental, health, and safety regulations is mandatory to operate a tannery legally.

What are the challenges faced by tannery businesses in India, and how can they be overcome?

Challenges faced by tannery businesses in India include regulatory compliance, environmental concerns, fluctuating raw material prices, competition, and technological advancements. To overcome these challenges, tanneries can invest in modern technologies, adopt sustainable practices, diversify product offerings, and enhance operational efficiency.

How can entrepreneurs ensure the quality of leather products produced by their tannery?

Ensuring the quality of leather products requires implementing robust quality control measures throughout the tanning process. This includes conducting regular inspections, testing for quality parameters, adhering to industry standards and specifications, and addressing any issues or deviations promptly to maintain product quality and customer satisfaction.

What are the potential markets for leather products produced by tanneries in India?

The potential markets for leather products produced by Indian tanneries include domestic consumers, exporters, manufacturers of footwear, apparel, accessories, furniture, automotive components, and the global leather industry. Entrepreneurs can explore diverse market opportunities and distribution channels to maximize their market reach and sales.

What are the startup costs associated with setting up a tannery business in India?

Startup costs for a tannery business in India depend on factors such as the scale of operations, facility size, equipment, technology, raw material sourcing, regulatory compliance, and infrastructure requirements. Entrepreneurs should conduct a thorough cost analysis and budgeting exercise to estimate startup expenses accurately.

Are there any government schemes or incentives available to support tannery businesses in India?

Yes, the Indian government offers various schemes, subsidies, and incentives to promote the leather industry and support tannery businesses. These include financial assistance programs, skill development initiatives, technology upgrade schemes, export promotion incentives, and infrastructure development projects. Entrepreneurs can explore government schemes to avail of benefits and support for their tannery ventures.