Leather and Leather Substitute Product Manufacturing in Australia - Market Research Report (2013-2028)
Melbourne, Australia
Last Updated: June 2023
ANZSIC C1320Revenue
$419.9m
Past 5-Year Growth
Profit
$XX.Xm
Employees
1,425
Businesses
370
Wages
$XX.Xm
Leather and Leather Substitute Product Manufacturing in Australia industry analysis
Key downstream markets for the Leather and Leather Substitute Manufacturing industry are the clothing, furniture and automotive sectors. In recent years, these downstream markets have offshored their operations to take advantage of lower overhead costs. Countries like China and India have fewer regulations and source leather products nearby at competitive prices, so moving operations to these countries drastically improves companies' profit margins. Domestic manufacturers have transitioned to selling high-value products, focusing on premium hides and leather goods due to fierce competition from low-cost imports. Australian leather manufacturers rely heavily on international markets for both exports and imports. Exports are essential for the manufacturing supply chain, where manufacturers outsource a portion of leather processing to countries like China. Pandemic-related lockdowns and supply chain disruptions in global economic markets have severely disrupted the downstream vehicle manufacturing market. Vehicle manufacturers worldwide suffered from input delays, like semiconductor shortages, diminishing demand for leather interiors. Overall, industry revenue is expected to decline at an annualised 5.1% over the five years through 2023-24 to $419.9 million. This includes a current-year decline of 2.6%, largely due to developing international operations.Global trade conditions heavily affect the industry because of its export-oriented nature. Key inputs are derived from cattle farmers and the turn-off for each given season. Cattle farmers experienced severe droughts in the years leading up to 2017-18, which caused high turn-off rates. This oversupply meant that many cattle hides and leather materials ended up in landfill. Farmers have since begun rebuilding herd numbers, reducing turn-off rates in the following years.Industry revenue is projected to continue declining over the coming years. Import competition is set to become fiercer as overseas manufacturers begin to match domestic manufacturers' quality. Overall, revenue is projected to marginally decline, at an annualised 0.8%, through the end of 2028-29, to $403.6 million.
Trends and Insights
- The pandemic has significantly disrupted demand from export markets, reducing industry revenue. Cattle turn-off rates have fallen due to farmers wanting to rebuild herd numbers, limiting the number of available cattle hides.
- The majority of bovine hides are not fully processed into leather in Australia but in other countries. These hides are predominately harvested in Australia, but are sent to international manufacturers with cheaper processing capabilities.
- The industry predominantly operates in New South Wales, Victoria and Queensland. These states are expected to account for 82.3% of industry enterprises in 2023-24.
- Industry globalisation has led to increased buyer power in leather sourcing, with options like cheaper processing in China and luxury Italian leather goods appealing to many. Conversely, suppliers have regained power as recent heavy rainfall has improved cattle farming conditions.
Industry Overview
Market size and recent performance (2013-2028)
Industry revenue has declined at a CAGR of 5.1 % over the past five years, to reach an estimated $419.9m in 2023.
Trends and Insights
Key downstream markets are turning from domestic manufacturers to overseas options
- The automotive, furniture and clothing manufacturing sectors are key downstream markets for leather manufacturers. Leather manufacturers process hides and supply these markets with finished leather of different cuts and polishes.
- Additional trends and insights available with purchase
Source: IBISWorld
Industry outlook (2024-2029)
Market size is projected to decline over the next five years.
Trends and Insights
Industry consolidation is set to grow as international markets push out small manufacturers
- Industry consolidation is projected to continue over the coming years as small enterprises leave the industry in response to falling revenue.
Biggest companies in the Leather and Leather Substitute Product Manufacturing in Australia
| Company | Market Share (%)
2024 | Revenue ($m)
2024 |
|---|---|---|
AI Topper | 82.7 | |
Schaffer | 36.9 | |
Teys Australia | 19.0 |
To view the market share and analysis for all 3 top companies in this industry, view purchase options.
Products & Services Segmentation
Source: IBISWorld
Industry revenue is measured across several distinct product and services lines, including Semi-processed bovine hides, Processed bovine hides and Leather of other animals. Semi-processed bovine hides is the largest segment of the Leather and Leather Substitute Product Manufacturing in Australia.
Trends and Insights
Farmers' attempts to rebuild herds after years of drought reduced inputs for semi-processed bovine hides
- Semi-processed bovine hides represent the largest industry product segment. This segment includes skins of bovine (including buffalo) or equine animals that have been semi-processed.
- More insights available in the full report
Widen you competitive advantage with related industries
Competitors
- Synthetic and Natural Textile Manufacturing in Australia
Complementors
- Tailoring and Clothing Accessories Manufacturing in Australia
- Footwear Manufacturing in Australia
- Footwear Wholesaling in Australia
International industries
- Global Handbag & Purse Manufacturing
- Leather Tanning & Finishing in the US
- Leather Good & Luggage Manufacturing in the US
- Backpack & Courier Bag Manufacturing in the US
- Luggage Manufacturing in China
Table of Contents
About this industry
Industry definition
Industry firms primarily cut, tan, finish and dye leather and animal hides, skins and fur. Companies also produce sheepskin and slipe wool. Operators also manufacture leather or synthetic leather handbags, wallets, suitcases, saddles and harnesses. The industry excludes leather clothing and footwear manufacturing.
What's included in this industry?
Semi-processed bovine hidesProcessed bovine hidesLeather of other animalsSaddlery material and leather sporting goodsHandbags, briefcases, wallets and pursesVegan leather and suedeCompanies
AI TopperSchafferTeys AustraliaPurchase this report to view all 3 major companies in this industry.
Related Terms
SLIPE WOOLLEATHER TANNINGGREEN FLESHINGLIME SPLITTINGPICKLINGLIMING WET-BLUETURNOFFIndustry Code
ANZSIC 1320 - Leather and Leather Substitute Product Manufacturing in Australia
Performance
Get an indication of the industry's health through historical, current and forward-looking trends in the performance indicators that make or break businesses.
Analyst insights
The pandemic has significantly disrupted demand from export markets, reducing industry revenue. Cattle turn-off rates have fallen due to farmers wanting to rebuild herd numbe...
In this chapter (4)
- Current Performance
- Outlook
- Volatility
- Life Cycle
Key metrics
- Annual Revenue, Recent Growth, Forecast, Revenue Volatility
- Number of Employees, Recent Growth, Forecast, Employees per Business, Revenue per Employee
- Number of Businesses, Recent Growth, Forecast, Employees per Business, Revenue per Business
- Total Profit, Profit Margin, Profit per Business
Charts
- Revenue, including historical (2013-2022) and forecast (2023-2028)
- Employees, including historical (2013-2022) and forecast (2023-2028)
- Businesses, including historical (2013-2022) and forecast (2023-2028)
- Profit, including historical (2013-2023)
- Industry Volatility vs. Revenue Growth
- Industry Life Cycle
Detailed analysis
- Trends in supply, demand and current events that are driving current industry performance
- Expected trends, economic factors and ongoing events that drive the industry's outlook
- Key success factors for businesses to overcome volatility
- How contribution to GDP, industry saturation, innovation, consolidation, and technology and systems influence the industry's life cycle phase.
Products and Markets
Learn about an industry's products and services, markets and trends in international trade.
Analyst insight
The majority of bovine hides are not fully processed into leather in Australia but in other countries. These hides are predominately harvested in Australia, but are sent to i...
In this chapter
- Products & Services
- Major Markets
- International Trade
Key metrics
- Largest market segment and value in 2023
- Product innovation level
- Total imports, level and trend
- Total exports, level and trend
- Trade Balance
Charts
- Products & services segmentation in 2023
- Major market segmentation in 2023
- International trade, including imports by country and exports by country
Detailed analysis
- Trends impacting the recent performance of the industry's various segments
- Innovations in the industry's product or service offering, specialization or delivery method
- Key factors that successful businesses consider in their offerings
- Buying segments and key trends influencing demand for industry products and services
- Recent trends in import and export volumes, country of origin or destination, and expected future trends
Geographic Breakdown
Discover where business activity is most concentrated in an industry and the factors driving these trends to find opportunities and conduct regional benchmarking.
Analyst insights
The industry predominantly operates in New South Wales, Victoria and Queensland. These states are expected to account for 82.3% of industry enterprises in 2023-24.
In this chapter (1)
- Business Locations
Charts
- Share of revenue, establishment, wages and employment in each region
- Share of population compared to establishments in each region in 2023
Tables
- Number and share of establishments in each region in 2023
- Number and share of revenue each region accounts for in 2023
- Number and share of wages each region accounts for in 2023
- Number and share of employees in each region in 2023
Detailed analysis
- Geographic spread of the industry across Asia Pacific, and trends associated with changes in the business landscape
- Key success factors for businesses to use location to their advantage
Competitive Forces
Get data and insights on what's driving competition in an industry and the challenges industry operators and new entrants may face, with analysis built around Porter's Five Forces framework.
Analyst insights
Industry globalisation has led to increased buyer power in leather sourcing, with options like cheaper processing in China and luxury Italian leather goods appealing to many. ...
In this chapter (4)
- Concentration
- Barriers to Entry
- Substitutes
- Buyer & Supplier Analysis
Key metrics
- Industry concentration level
- Industry competition level and trend
- Barriers to entry level and trend
- Substitutes level and trend
- Buyer power level and trend
- Supplier power level and trend
Charts
- Market share concentration among the top 4 suppliers from 2018-2023
- Supply chain including upstream supplying industries and downstream buying industries, flow chart
Detailed analysis
- Factors impacting the industry’s level of concentration, such as business distribution, new entrants, or merger and acquisition activity.
- Key success factors for businesses to manage the competitive environment of the industry.
- Challenges that potential industry entrants face such as legal, start-up costs, differentiation, labor/capital intensity and capital expenses.
- Key success factors for potential entrants to overcome barriers to entry.
- Competitive threats from potential substitutes for the industry’s own products and services.
- Key success factors for how successful businesses can compete with substitutes.
- Advantages that buyers have to keep favorable purchasing conditions.
- Advantages that suppliers have to maintain favorable selling conditions.
- Key success factors for how businesses can navigate buyer and supplier power.
Companies
Learn about the performance of the top companies in the industry.
Analyst insights
Both Schaffer Corporation and A I Topper & Co are heavily export-oriented, making them vulnerable to global economic conditions and fluctuations in demand. This reliance on e...
In this chapter
- Market Share Concentration
- Companies
- Company Spotlights
Charts
- Industry market share by company in 2019 through 2023
- Major companies in the industry, including market share, revenue, profit and profit margin in 2023
- Overview of AI Topper's performance by revenue, market share and profit margin from 2017 through 2023
- Overview of Schaffer's performance by revenue, market share and profit margin from 2017 through 2023
- Overview of Teys Australia's performance by revenue, market share and profit margin from 2017 through 2023
Detailed analysis
- Description and key data for AI Topper, and factors influencing its performance in the industry
- Description and key data for Schaffer, and factors influencing its performance in the industry
- Description and key data for Teys Australia, and factors influencing its performance in the industry
External Environment
Understand the demographic, economic and regulatory factors that shape how businesses in an industry perform.
Analyst insights
Growing environmental concerns about chemical waste disposal have increased costs for the industry. This rise has pushed leather manufacturing overseas where regulations are ...
In this chapter
- External Drivers
- Regulation & Policy
- Assistance
Key metrics
- Regulation & policy level and trend
- Assistance level and trend
Charts
- Regulation & Policy historical data and forecast (2013-2028)
- Assistance historical data and forecast (2013-2028)
Detailed analysis
- Demographic and macroeconomic factors influencing the industry, including Regulation & Policy and Assistance
- Major types of regulations, regulatory bodies, industry standards or specific regulations impacting requirements for industry operators
- Key governmental and non-governmental groups or policies that may provide some relief for industry operators.
Financial Benchmarks
View average costs for industry operators and compare financial data against an industry's financial benchmarks over time.
Analyst insights
Profit margins have been falling behind over the past five years due to reduced demand in key downstream markets. Pandemic-related disruptions, like a global semi-conductor s...
In this chapter
- Cost Structure
- Financial Ratios
- Key Ratios
Key metrics
- Profit margin, and how it compares to the sector-wide margin
- Average wages, and how it compares to the sector-wide average wage
- Largest cost component as a percentage of revenue
- Industry average ratios for days' receivables, industry coverage and debt-to-net-worth ratio
Charts
- Average industry operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2023
- Average sector operating costs as a share of revenue, including purchases, wages, depreciation, utilities, rent, other costs and profit in 2023
- Investment vs. share of economy
Data tables
- Cash Flow & Debt Service Ratios (2013-2028)
- Revenue per Employee (2013-2028)
- Revenue per Enterprise (2013-2028)
- Employees per Establishment (2013-2028)
- Employees per Enterprise (2013-2028)
- Average Wage (2013-2028)
- Wages/Revenue (2013-2028)
- Establishments per Enterprise (2013-2028)
- IVA/Revenue (2013-2028)
- Imports/Demand (2013-2028)
- Exports/Revenue (2013-2028)
Detailed analysis
- Trends in the cost component for industry operators and their impact on industry costs and profitability
Key Statistics
Industry Data
Data Tables
Including values and annual change:
- Revenue (2013-2028)
- IVA (2013-2028)
- Establishments (2013-2028)
- Enterprises (2013-2028)
- Employment (2013-2028)
- Exports (2013-2028)
- Imports (2013-2028)
- Wages (2013-2028)
Methodology
How are IBISWorld reports created?
IBISWorld has been a leading provider of trusted industry research for over 50 years to the most successful companies worldwide. With offices in Australia, the United States, the United Kingdom, Germany and China, we are proud to have local teams of analysts that conduct research, data analysis and forecasting to produce data-driven industry reports.
Our analysts start with official, verified and publicly available sources of data to build the most accurate picture of each industry. Analysts then leverage their expertise and knowledge of the local markets to synthesize trends into digestible content for IBISWorld readers. Finally, each report is reviewed by one of IBISWorld’s editors, who provide quality assurance to ensure accuracy and readability.
IBISWorld relies on human-verified data and human-written analysis to compile each standard industry report. We do not use generative AI tools to write insights, although members can choose to leverage AI-based tools within the platform to generate additional analysis formats.
What data sources do IBISWorld analysts use?
Each industry report incorporates data and research from government databases, industry-specific sources, industry contacts, and our own proprietary database of statistics and analysis to provide balanced, independent and accurate insights.
Key data sources in Australia include:
- Australian Bureau of Statistics
- Australian Taxation Office
- Australian Securities & Investments Commission
Analysts also use industry specific sources to complement catch-all sources, although their perspective may focus on a particular organization or representative body, rather than a clear overview of all industry operations. However, when balanced against other perspectives, industry-specific sources provide insights into industry trends.
These sources include:
- Industry and trade associations
- Industry federations or regulators
- Major industry players annual or quarterly filings
Finally, IBISWorld’s global data scientists maintain a proprietary database of macroeconomic and demand drivers, which our analysts use to help inform industry data and trends. They also maintain a database of statistics and analysis on thousands of industries, which has been built over our more than 50-year history and offers comprehensive insights into long-term trends.
How does IBISWorld forecast its data?
IBISWorld’s analysts and data scientists use the sources above to create forecasts for our proprietary datasets and industry statistics. Depending on the dataset, they may use regression analysis, multivariate analysis, time-series analysis or exponential smoothing techniques to project future data for the industry or driver. Additionally, analysts will leverage their local knowledge of industry operating and regulatory conditions to impart their best judgment on the forecast model.
IBISWorld prides itself on being a trusted, independent source of data, with over 50 years of experience building and maintaining rich datasets and forecasting tools. We are proud to be the keystone source of industry information for thousands of companies across the world.
Learn more about our methodology and data sourcing on the Help Center.
Frequently Asked Questions
Unlock comprehensive answers and precise data upon purchase. View purchase options.
What is the market size of the Leather and Leather Substitute Product Manufacturing industry in Australia in 2024?
The market size of the Leather and Leather Substitute Product Manufacturing industry in Australia is $419.9m in 2024.
How many businesses are there in the Leather and Leather Substitute Product Manufacturing in Australia industry in 2023?
There are 370 businesses in the Leather and Leather Substitute Product Manufacturing industry in Australia, which has declined at a CAGR of 1.2 % between 2018 and 2023.
Has the Leather and Leather Substitute Product Manufacturing industry in Australia grown or declined over the past 5 years?
The market size of the Leather and Leather Substitute Product Manufacturing industry in Australia has been declining at a CAGR of 5.1 % between 2018 and 2023.
What is the forecast growth of the Leather and Leather Substitute Product Manufacturing industry in Australia over the next 5 years?
Over the next five years, the Leather and Leather Substitute Product Manufacturing industry in Australia is expected to decline.
What are the biggest companies in the Leather and Leather Substitute Product Manufacturing market in Australia?
The biggest companies operating in the Leather and Leather Substitute Product Manufacturing market in Australia are AI Topper, Schaffer and Teys Australia
What does the Leather and Leather Substitute Product Manufacturing in Australia include?
Semi-processed bovine hides and Processed bovine hides are part of the Leather and Leather Substitute Product Manufacturing industry.
Which companies have the highest market share in the Leather and Leather Substitute Product Manufacturing in Australia?
The company holding the most market share in Australia is AI Topper.
How competitive is the Leather and Leather Substitute Product Manufacturing industry in Australia?
The level of competition is high and increasing in the Leather and Leather Substitute Product Manufacturing industry in Australia.
