The leather and by-products industry is undergoing major worldwide changes in production and technology, with new competitors and markets. The industrial countries, as well as the countries of Southeast Asia and other developing economies are interested in this sector because the leather and by-products industry has a high export potential, is labor intensive, and has important backward linkages to suppliers.
Modern technology is needed to satisfy the demanding requirements of high income groups.
The production of leather and leather products has taken place in Argentina since the country's earliest days. Its agricultural sector has provided the hides the industry has required either as a main product or a by-product depending on the period. Mercosur countries are leather producers that can count on significant competitive advantages. They possess extensive areas suitable for cattle breeding and a favorable climate. Competition resulting from trade liberalization, both generally and within Mercosur.