Synthetic Leather Market

Synthetic Leather Market: Overview

• Synthetic leather, also known as artificial or faux leather, is a substitute for traditional leather in upholstery, clothing, footwear, and other products. Demand for the synthetic leather has been rising in the last few years, as synthetic leather and traditional leather have similar appearance.
• Synthetic leather provides a wide range of colors and textures at a lower price compared to that provided by traditional leather

Rapid Expansion of Automotive Interior Materials Industry to Drive Global Market

• Rapid rise in population and disposable income has been propelling the demand for passenger and commercial vehicles, especially in developing countries such as China and India. The total number of new cars and light commercial vehicles (LCVs) sold across the globe were 86.01 million units in 2018, up from 79.77 million units in 2015.
• Thus, an increase in automotive sales and constant changes in consumer preferences in the automotive industry, especially in terms of automotive interior settings and looks, has been driving the demand for high-grade synthetic leather in the last few years
• Traditional leather is heavy, expensive, and difficult to handle; consequently, it is being replaced by synthetic leather in automotive interior settings ranging from seat covers to dashboards
• Synthetic leather is used in buses, trucks, cars, motorcycles, as it is highly elastic, comfortable, and resistant to high as well as low temperatures. Car owners are heavily investing in synthetic leather interiors to enhance the appearance of their cars as well as their driving experience.
• Therefore, expansion of the automotive interior materials industry is anticipated to drive the global synthetic leather market during the forecast period

Shorter Lifespan Compared to Traditional Leather to Hamper Market

• Synthetic leather has relatively shorter lifespan as compared to traditional leather, as prolonged exposure to heat and moisture degrade synthetic leather at a more rapid pace
• Synthetic leather is chemically treated to make it resistant to sunlight, scratches, and fire; however, it becomes weak and susceptible to degradation, due to wear and tear. Synthetic leather is available at an affordable price, however, it requires high level of care and maintenance and needs to be protected from direct sunrays to extend its lifespan
• In hot and humid environments, synthetic leather can easily degrade, as it is not breathable. Moist skin easily sticks to it on contact.
• Moreover, synthetic leather can be more easily torn or punctured through misuse or other means, as compared to traditional leather
• Unlike synthetic leather, traditional leather is known to have lifespan of 20–30 years if cared for properly 
• Thus, shorter lifespan of synthetic leather is likely to act as a restraint to the market during the forecast period

Eco-friendly Materials and Processes to Offer Opportunities

• Synthetic leather is more eco-friendly as compared to traditional leather; however, it can be made more eco-friendly and acceptable by changing certain aspects 
• Companies are presently shifting their focus toward recycled products to manufacture synthetic leather in order to promote sustainable development. Synthetic leather manufacturing companies are trying to develop new technologies and processes in order to minimize harmful effects of their operations on the environment.
• Companies are switching toward usage of recycled polyester ultra-fine microfibers as a raw material for their products. With this, they are not only preventing these microfibers from causing pollution, but are also reducing the demand for crude oil and petroleum-based products to a large extent. They are also minimizing the level of carbon dioxide (CO2) emitted from processing and manufacturing of virgin polyester fibers.
• Companies are also shifting toward water-based polyurethane in order to reduce the burden on the environment as compared to typical organic solvents that contain dimethyl formamide (DMF). Water-based polyurethanes can be utilized as an excellent leather-coating chemical. They have inherent flexibility, resistance to abrasion, and better tensile property. Moreover, they have a lower rate of emission of volatile organic compounds (VOCs) and hazardous air pollutants (HAPs), which makes them more useful in comparison with other solvents used for leather finishing. 
• Manufacturers are also adopting the direct spinning method in place of the composite manufacturing method of extraction. In the direct spinning method, high-quality raw materials are spun directly into a thread, which is subsequently cut into short, ultra-fine microfibers. In the composite manufacturing method, organic solvents containing substances, such as trichloroethylene, are used. Trichloroethylene is carcinogenic in nature.

Key Strategies Adopted by Companies

• On July 31, 2019, Asahi Kasei Corporation announced that it would operate regional headquarters in Thailand in order to expand its presence in the market in ASEAN. The company also declared that ASEAN is not only an important region for manufacturing, but it is also becoming a key market, which it wants to capitalize on.
• On July 17, 2019, Asahi Kasei Corporation announced plans to expand the production capacity of its Lamous artificial suede at its Nobeoka plant in Miyazaki, Japan, by 4 million square meters/year. This is expected to increase the company’s total production capacity to 14 million square meters/year upon completion in 2021.
• In July 2018, Teijin Limited announced that it had agreed to acquire J.H. Ziegler GmbH, a leading supplier of automotive interior materials in Germany. The acquisition cost stood at around US$ 137.8 Mn (EUR 125 Mn). Ziegler GmbH provides advanced nonwoven lining structures, including materials with superior ventilation capabilities that not only help prevent wrinkles, but also maintain the luxurious appearance of traditional leather materials.

Asia Pacific to Dominate Synthetic Leather Market

• Asia Pacific dominated the global synthetic leather market in 2018. The market in the region is estimated to expand at a significant pace during the forecast period, due to the rise in demand for sustainable and eco-friendly materials in the region. However, countries such as India and Vietnam consume PVC synthetic leather in large quantities, as it is inexpensive as compared to the PU synthetic leather. Increase in disposable income of the urban population is driving the footwear industry in Asia Pacific, wherein consumers are willing to pay more for premium products.
• Europe is also a lucrative region in the synthetic leather market. Footwear and automobile industries in Europe are witnessing significant demand for synthetic leather. Countries in Europe such as Germany, France, and Italy have various manufacturing units that require synthetic leather as their raw material and hence, the demand for synthetic leather is estimated to remain stable in the near future.
• North America is a moderately attractive region of the global market. Rapid rate of urbanization and developments in standard of living are key factors propelling the demand for synthetic leather in the region.

Synthetic Leather Market is Highly Competitive

• The global synthetic leather market is highly fragmented, with the presence of a large number of players operating at local, regional, and international levels
• Key players operating in the global synthetic leather market include
  • Asahi Kasei Corporation
  • FUJIAN POLYTECH TECHNOLOGY CORP.,LTD.
  • Mayur Uniquoters Limited
  • Toray Industries, Inc.
  • Zhejiang Hexin Holdings Co., Ltd.
  • Alfatex Italia SRL
  • H.R.Polycoats Pvt. Ltd.
  • FILWEL Co., Ltd.
  • Nan Ya Plastics Corporation
  • Teijin Limited
  • Achilles USA, Inc.
  • San Fang Chemical Industry Co., Ltd.
  • Kuraray Co., Ltd.