DEER SKIN TANNING WITH A PRODUCT FOCUS David Simek Simco Leather Corporation

1. DEER SKIN TANNING WITH A PRODUCT FOCUSDavid SimekSimco Leather Corporation Today, I would like to address two topics: the procedures of tanning exotic leathers, specifically deer, and the viability and the future of exotic leather and the future of exotic leather markets in the U.S. Simco Leather was founded in 1960 as a family business on a new and environmentally clean site in Johnstown, New York. We would come to realize the importance of this in the 1980’s when regulatory and monitoring procedures were required by the government.

2. Initially, we had 4 employees and a 5,000 square foot building. Over the years, we have grown to 62,000 square feet with a 15,000 square feet warehouse with approximately 30 to 40 employees varying with seasonal production. In the `60’s, we processed sheep from Iran for garment leather as well as some cow hide for garments and handbags. Do to changes in the marketplace and the Iranian embargo, we expanded to include processing deer, suedes, and other apparel leathers along with military leathers. Today, deer production is approximately 50% of our total. Tanning Process With the following slides you can see the processes we use at Simco Leather. For those of you who are in the tanning industry or are familiar with tanning this will be just a rerun of what you already know. For the others who have not been involved in this industry it will help explain some of the complexities of making deer and other exotics into fine leather.

3. Our deer warehouse will contain up to 80,000 hides at one time. Seasonally, we process over a quarter of a million hides. Since deer harvesting takes place in the fall and winter during hunting season, we must have a capacity to store these hides safely throughout the winter. By the end of June, all of the deer will be processed at least to the pickle stage. • The first step is to trim the hides to remove non-essential parts and to cull poor or damaged hides for special treatment. • This is a typical white-tailed deer from the mid-western states. These are the largest found in the U. S.The first week of production is involved in the removal of unwanted proteins and fats from the hides that cannot be made into leather. The “beam shop” procedures are the preparation steps for the tanning which is to follow.

4. These two pictures are of the soak bays. They are used for re-hydration of hides. • Soaps, alkalis and fungicides are added during this stage to retard bacteria growth and to begin breaking down natural fats in the hides. Earlier, we used tanks or drums to soak. They were too labor intensive. By using the soak bays, handling was reduced by 50%. • After 24 to 48 hours of soaking, fleshing is the next step. Here we remove the flesh from the hides so chemicals in the next step will penetrate the skin properly. Most animal hides can be un-haired by placing them in a paddle or drum with chemicals to dissolve the hair. Deer has to be handled differently because of its sensitive grain and the problems of floatation caused by the hollow hair. Keeping them underwater is a major problem. Our soak bays have 1/4” chains every 3 feet to hold down the soaking raw hides. My first experience, about 20 years ago, I had to improvise because we

5. didnot have the proper equipment. I placed the hides in a paddle, put plywood over the top, and wedged 2x6’s to the ceiling. I added water and chemicals and went home. Several hour later, I got a call from the plant to come back. The 2x6”s had literally raised the roof due to the pressure from the floating hides. • Following the fleshing, un-hairing chemicals are sprayed on the flesh side and then the hides are piled overnight. • The chemicals are absorbed and the hair follicle sufficiently weakened to allow mechanical removal of the hair. • By removing hair in this way, we can use it as a by-product for horse padding and collars which are manufactured by the Amish or for padding for hockey uniforms manufactured in Canada. • After the hair is removed the hides are placed in a paddle with a weak lime and sulfide solution for 24 hours. After they are removed from the paddle, they are fleshed a second time.

6. The last step in the “beam shop” is the bating and pickling procedure. An enzyme is added to remove the protein elastin and clean the residual hair scud. This is one of the most critical points of production. Enzymatic strength is very temperature and time sensitive. A 5o temperature difference can either double or reduce by one-half its active strength. A process time variation of 5 to 10 minutes can also result in too much or too little bating with a resulting piece of leather that is not suitable for its desired end use. At this point, sulfuric acid and salt are added. The hides are now in the pickled state. From the point of re-hydration, approximately 4 days prior to this step, the process is continuous. The chemicals added to perform their functions must be deactivated by pH or temperature change as in the bate, or rinsed clear as in the lime and sulfide stage but continued to the next stage without stopping until pickled. We process some deer which are transported to us from New Zealand and Australia in the pickle. As long as temperatures never exceed 90o F or is diluted by fresh water, the hides can be held for long periods of time.

7. After a period of 7 to 14 days of storage to achieve a uniform pH, the hides are ready for tanning. • Chromium is used to tan with supplemental additions of replacement syntans and resins to enhance the unique grain characteristics. • The hides are dried after tanning by first wringing excess water from them and then hanging them individually in a tunnel dryer for 24 hours. • On the right you can see a pile of deer hides that have just been taken down from hanging. Those of you who experienced the feel of clothes dried on a clothes line can appreciate the need for this next step. • We now have to dampen the leather and let it rest for another 24 hours. Heat is generated by dampening and piling.

8. We then mill the hides in a dry drum until soft. • Once softened, the hides are stretched on a staking machine. We have three different types of staking machine: the first is a multi-step machine designed and built locally, • The second and third are feed-through machines, one from Italy, • And the other from Czechoslovakia. Following staking, the hides are ready to be graded and sorted into different categories for quality and size depending on their final use, such as shoes, garments, gloves, or work gloves. After grading, the hides are split to level thickness. Without this procedure, manufacturers could not achieve straight, even seams. Large hides will produce a second, less valuable, but saleable split from the bottom half of the hide. Deer splits are used for clothing, gloves, and other small leather goods.

9. Coloring and finishing is determined by the customer’s end use. Custom coloring is a highly skilled craft and requires an artistic sensibility as well as the technical knowledge to address the range of customers’ needs. • In addition to creating hundreds of color variations, the leather may also have to meet the need for sheen, firmness, flame retardant, water and perspiration resistance and other use-specific characteristics. • This slide shows just our current custom colors being made for the month of April this year. • Drying procedures are the same as in the tanning stages but an added process of toggling is sometimes used to stretch and firm the hides. • Final trimming to customers’ specifications brings the hides to completion.

10. We also must remember that hides are purchased by the unit (per hide) and sold, after finishing, by the square foot or square meter. This slide is of our measuring machine or “cash register” as we refer to it. It is the last step before shipping. • Also, not to be overlooked is the importance of machine maintenance. The hardware we utilize in all of these processes can be just as critical to producing a quality product as the skills of the tanners and the formulations. • Along with normal production equipment, we utilize small sample paddles and drums for research & development or processing one-of-a-kind hides for trophies or exotic leathers. • Over the years we have tanned everything from a yak with the hair on for a mountain climber in Nepal to a 200 pound bison hide which was a blue ribbon winner at a state fair. Some of these unique items have led to new customers, some have not.

11. Our ostrich tanning started this way - after 10 years of working with small numbers of ostrich, we were asked to assist in a joint ostrich program in South Korea. American ostrich has the potential to become a profitable domestic leather, so we continue to support it as much as time allows us. • This last slide is one which I take exceptional pride in. Our state’s Business Review wrote an article last year about the elevation of Simco’s six department managers to company shareholders and managingpartners. Now, I’d like to share some thoughts about building an industry in exotic leathers. As you saw from our slides, the manufacture of fine leather from a wild animal is an intricate and complicated process. Some factors that occur in its production are not a consideration in packing house hides. Proper curing, storage, flaying or hide removal can detract from the final quality but cannot be controlled by the tanner or the purchaser. We can go to all the extra work to make a quality product but if markets are not there we still do not have a viable industry.

12. Let’s look at some of the things which have to be in place to be successful in the deer industry. 1. The raw hides should be readily available and as consistently uniform as possible. 2. The market must be researched to find a niche for the product. Small processors must find a manufactured product that is either overlooked or deemed unprofitable by large multi-national corporations. Products that are usually not produced by large companies include those that have too small production runs, too small profit margins, too tight time frames, or which demand too much attention to detail. 3. At each stage, from farm production to slaughtering, tanning, and manufacturing, we all must be diligently cost-conscious, or we will drive the end cost too high. Simco Leather is profitable in spite of massive changes in domestic leather production, very expensive regulatory mandates, union wages and benefits, and ever increasing chemical and equipment costs.

13. To give you some examples of the above: a) Fashions in the apparel industry change with the seasons and frequently in mid-season. Samples that are submitted will not all be in demand for a production run, however, those that are well received by the buyers will have to be produced in a short time frame. b) Smaller operations can economically produce small runs of specialty items which can not be done by large volume manufacturers. As an example, Simco spends more than $1,000 a week on BASF chemicals, however, our volume is not sufficiently high enough for BASF to sell to us directly. Their costs to administer our account make it prohibitive. For small accounts like ours, BASF has to use an independent distributor. c) If the production is domestic, the time frame is much less than from a Pacific Rim area and makes domestic contracts feasible for small producers. Conversely, small operators cannot compete successfully with standard colors and finishes for high volume

14. leathers. Typically they are the black and brown jacket leathers, pig suedes, white athletic shoe leather, etc. These products can have a manufacturer’s lead time of 6 to 9 months and are being produced in countries with lower wage structures, less environmental restrictions and all the other factors that make large scale, low skill production hugely profitable for multi-nationals. d) There is no area in our tannery that has not been made more efficient in the past decade. In addition, we never stop looking at ways to partner with others to get the job done better, faster, or cheaper depending on what is being demanded by the customer. If we neglect any area of production, we risk our profitability. After being in business for 40 years, it is apparent to me that in the future, our large U.S. corporations will be heavily invested in the service sectors, emerging technologies, and finance. Smokestack industries will be secondary and most operations relegated to third

15. world countries. Small companies, like mine, will have to be committed to highly specialized fields filling niche markets such as fashion and military leathers or those which require extra care and a higher level of skills than can be attained in large-volume operations. Exotic leather fits all of these general parameters. Our area of New York had been active in tanning Texas deer for many years but with the move of glove leather production and manufacturing overseas, it completely stopped. The small size of Texas deer makes it uncompetitive to northern white-tail in the traditional deer markets. Texas deer promoters will have to develop new markets within the limitations of the product.

16. Three areas come to mind immediately: chamois leather, foil-faced, and printed leather. All of these can be used with hides which have grain defects to produce a quality product. Texas deer sold to China gains some return on investment but selling retail instead of wholesale ultimately will produce a larger profit margin which may mean the difference between success and failure in the long run. In less than two decades, Simco has watched some of our customers go from 95o domestic manufacturing and 5% imports to just the opposite. The majority of our leather is going to be manufactured into products abroad and imported back into this country. However, our area supports several, highly successful manufacturing operations. Some sewing operations are done in the mid-Atlantic states, but custom work is still done locally. We’ve seen large volume, high end leather manufacturers move to offshore facilities, move again to Pacific Rim countries, and ultimately go out of business. Success does not always follow cheap overhead.

17. One good idea with the proper groundwork, can create a profitable business. Chamois, which I mentioned earlier, is selling in catalogs and automotive centers for up to $20.00 a square foot. Normally, nowhere on the packaging does it mention what type of hide is used to create this chamois. Traditionally it has been an end-use for poor grained sheep, but some of the finest chamois I’ve produced is from deerskin. Foils and prints which are applied to leather are another unique product with endless possibilities in the fashion industry. I’ve brought some samples of these with me. Although not all of these are in demand at this time, it does give one an idea of potential uses. Recently, we developed a nonchrome-tanned leather. which replicates brain-tanned leather used by Native Americans. This is being made into Native American products being sold through

18. their casinos all across the country. We learned of this tannage through a university seminar, years ago, in Regina, Canada. The aldehyde tannage mimics the incomplete combustion or “smoky” tannage of the past. In my experience, there is no one, big solution to establishing a domestic industry in exotic leather, but a series of small solutions. An example of an exotic leather business getting off to the wrong start, in may opinion was the ostrich industry. The ranchers we’ve done business with have been pursuing contracts with U.S. boot manufacturers. If this market had been properly researched, I’m sure that most ranchers would have seen that the lack of uniformity of their hides would be a deterrent to a large volume buyer. Even if a hide seller had a decent inventory of grade ones and twos, without an outlet for the balance of their inventory, it wouldn’t be long before they were out of business or in a serious cash shortfall. The variety of ostrich breeds and mixes across the

19. country and even within the same flocks, demands national standards before the industry can truly move forward. The exotic deer industry can learn valuable lessons from these mis-steps. Basically, each region of the country will have different resources, different contacts, and different outlets. The successes in one area will enhance the chances of success for those in another. The key is not to lose sight of the goal which is to establish farm-raised deer as a quality leather. An industry starts by sharing knowledge as we are doing here today - and I’m very pleased to have been asked to contribute to yourconference.