Packer Leather has taken over 100 years to become one of Australia’s leading exporters of leather and now specialises in finished kangaroo hides, a premium leather experiencing great demand from fashion designers and elite sporting shoe makers.

Packer Leather’s marketing director Graham Packer said the company, founded in 1891, had survived and prospered against the odds in Australia’s shrinking tanning industry.

The Packer family of Narangba, on the southern Sunshine Coast, has been involved in Australia’s leather industry since 1891, when English immigrant Joseph Packer founded a tannery in Brisbane.

Packer Leather has since become a world leader in producing and exporting leathers. The business is now run by Joseph’s great-grandsons, Lindsay and Graham, who relocated to Narangba in 1972 and soon began specializing in kangaroo leather.

Their journey to becoming one of Australia’s largest exporters of finished kangaroo leather has been continually challenged by foreign competitors.

“The kangaroo leather industry was controlled or dominated by European interests or some in America,” says Graham Packer, brother of managing director Lindsay.

“So they would take the raw material out of Australia and finish it and then supply their own factories. Until we came along and began fully finished kangaroo leather, there was very little size of that operation in Australia.

“So we have taken that – in other words taken some of the raw material away from the overseas interests – produced the leather here, and then shipped it to the overseas factories.”

Since 1972 the company has grown from five employees to about 170, but despite having export deals across Asia, Europe and America, Packer Leather continues to look for new markets.

“Kangaroo is known in football,” says Graham Packer. “But there’s only a limited volume of raw material that can be used in that. We‘ve taken that beyond those things into fashion, into dress, into casual, into handcraft leather.

“If you’re a movie buff, well our leathers have made the whips in all the Zorro movies and all the Indiana Jones movies. Gloving is one of our strong points. We’ve also produced a world first in putting kangaroo leather into automobile components.”

A kangaroo hide typically sells wholesale for about $US6.50 - more then four times the price of bovine leather, and its tensile strength far exceeds that of any domestic animal leather.

Its strength, coupled with its light-weight characteristics, make it the ideal material for manufacturing shoes or gloves. However while Australia’s kangaroo leather commands top prices across the globe, the country’s tanning industry is shrinking. Packer Leather is one of only seven tanneries remaining in Australia.

Graham Packer explains the factors that have led to the industry’s demise.

“The leather industry on the whole has had to compete with external factors – processing in third world countries, and the big major leather producers have all shifted a lot of their tanneries into those countries,” says Mr Packer.

“The big impact in Australia (is), we have to meet very strict environmental standards like the Europeans, whereas the Asian factories are just beginning to start to look at some of those. So that has been a big cost.”

Australia’s shrinking tanning industry has therefore had to find other ways to survive against the lower-cost, foreign competition.

“It’s finding that niche market and developing that with some innovation – putting some extra innovation into leathers that others don’t,” says Mr Packer.

“We have wet and dry grip leathers; we have leathers that will remain black leather – the sun looks at it as if its white leather and reflects about 70 per cent of the heat. We have abrasion proof, fireproofing, waterproofing – these sort of normal things that happen everywhere, but there are certain levels to what you can do.”

Australia’s kangaroo leather industry is worth about $80million a year, but of the leather exported, only about 15 per cent is sold as fully processed hides. The industry is also limited by strict quotas applied to annual kangaroo harvests, which in 2007 totalled about 3.2 million animals.

“It’s a limitation on a resource,” says Graham Packer. “So we try to maximize our take and we have a capacity here to do probably half a million square feet per month of leather and that’s what we work towards.

“The cost of the raw material has gone up considerably, so it is very difficult to maintain the growth that we had perhaps in the '80s. We are maintaining some small growth now, but it’s all about finding new markets –maintaining the old markets and finding those new markets.”