Leonardo Farms Sustainable crocodile leather

Background: Crocodylus porous

Saltwater crocodiles also known as indo-pacific crocodiles are naturally inhabited and found in Australia, Bangladesh, Brunei, Cambodia (Extinct?), China (historically possible), India, Indonesia, Malaysia, Myanmar, Palau, Papua New Guinea, Philippines, Seychelles (extinct), Singapore (Extinct), Srilanka, Solomon Islands, Thailand (Extinct?), Vanuatu, Vietnam (extinct?).

Ecology and Natural History

Crocodylus porosus is the largest of the living crocodilians with reported lengths of up to 6-7 m (Webb and Manolis 1989,2009; Whitaker and Whitaker 2008). These crocodiles attack humans and livestock only when given opportunity and are farless predators for human deaths compared to Nile Crocodiles. It is also the mostly widely distributed among all crocodiles across the whole south East Asia up to Australia.

Saltwater crocodiles are most commonly found in non-tidal freshwater intersections of rivers and inland freshwater lakes, swamps and marshes (Freshwater environments). In the marine environments it mostly inhabits in tidal rivers and creeks where salinity changes with different seasons and distance upstream. They mostly move around coasts between rivers and occupy offshore islands.

Conservation and status

Current status of saltwater crocodiles is hard to directly say as it is so widely distributed as some countries the natural breeding stocks are survey and reported and conservation actions are going on whereas in some countries the conservation plan is not fully implied. This is a challenging as countries such as Bangladesh, India and many more are developing economies and thus it’s an opportunity cost of the budget. Throughout most of the region Crocodiles are considered dangerous animals especially those who share the environment with them. Australia has been the pioneer of conservation of saltwater crocodiles. Due to high demand of crocodile products such as skin, meat, teeth, skeleton, blood and others hunting of became very popular especially in mid 1940s to 1970s. Although protection measures and conservations programs have been taken by NGO, Governments and Private entities there is a long way to go. Habitat loss continues to be a major problem and they are commonly killed due to their nature. Commercial farming for raising awareness and conservation of natural breeding stocks.

Saltwater crocodiles in Bangladesh

In Bangladesh Saltwater crocodiles are found in Sundarbans (Ganges delta and also world largest mangrove forest) but there are no exact data available of how many exactly are there. The population estimated to be 150-200 individuals in 1985, but is believed to be reduced by 100 due to variety of reasons (Manik 2009). The Karjamaa Crocodile Breeding centre was established in 2000 to conserve and release breeding stock and hassling into the wild. But till today there has not been a recording history of releasing any crocodile into the wild. The Wildlife ministry has till today given 2 commercial crocodile farming licenses based on production through captivity breeding, acquired adult stock from Malaysia.

Business Opportunity

“I saw Gold in Crocodiles, so I went for it"- Midred Parker (Owner Kazuri Crocodile Farm- Jan 2017)

Introduction about Crocodile Farming

Crocodile farming is one of the most profitable emerging businesses in this decade for emerging markets. On average, it isn’t very difficult to get 150% profit for each crocodile as a wide range of products can be extracted from these crocodiles. Saltwater crocodiles; Crocodylus porosus are the largest living crocodiles and are naturally found in South-east Asia and the pacific region . They are also commercially produced in some these nations. Commercial farming of these animals has been introduced not only for business purposes but also with the aim to protect these animals from illegal poaching. Alongside this, elements of conservation & research are also introduced and it is important to note that the species is CITE (Conservation of International Trade in Endanger) listed.

Products and It's trade

The crocodile products can be sold in the American, European and the Asian markets with very high value largely due to its rarity but also due to its demand from the luxury market. Products that can be extracted include but are not limited to leather and gourmet meat (Low cholesterol and High protein) but elements can be used by the perfume and pharmaceutical industries as well. The current market price of saltwater crocodiles belly skin is on average $8-12 USD/cm, blackstrap skin for $35-60 USD, Meat for $20/kg, Tail fillet for $26, Tenderloin for $27.50, Striploin $25, Mince for $14, leg bone $13.5, Bone in tail $22.5, Bone in upper carcass $11.5. Direct heads are also sold in the market for $25-35. Teeth are also sold in market for jewelry industry for $900-1200/kg. To sum up the above, it is clear that the commercial production and farming of crocodiles leaves little waste and their use flexibility makes it possible to attract a wide range of customer. Furthermore, these products as well as the management and harvesting of them is undertaken with strict CITE supervision in order to ensure correct treatment and to avoid illegally harvested parts from entering the market.

In order to have an in-depth analysis, this paper will be focusing on Saltwater Crocodile skin only as the belly skin is the most expensive and most demanded product in the market for high-end leather products for luxury brands. As seen in the paper, the demand of the crocodile skin for luxury brand is slightly decreasing in the European market but is increasing highly in the Asian markets such as China and Japan. Australia and Papa New Guinea together produce 80% of the total market of Salt-water crocodiles skin. The main importers of such skin are America, France, Spain, Italy, China and Japan. The skin is bought by direct buyers such as LVMH, GUCCI, Prada and also 3rd party buyers such as Pan American leathers (USA), Sakamoto (Japan) and Gaudi Leathers (Japan).

Why Crocodile farming in Bangladesh

‘Leonardo’ farms will be located in Bangladesh, which is located in the Indian subcontinent sharing its borders with India and Myanmar above the Bay of Bengal . Bangladesh is a low-income country. Encouragingly, a recent Goldman Sachs study quoted Bangladesh as being part of the “Next Eleven” emerging markets along with Vietnam, Egypt and South Korea . The primary exports of Bangladesh come from the Ready Made Garments sector (4th largest exporter in the world), Footwear, Frozen fish and leather . Its major trading partners are the European Union, USA, China, India, Japan, Malaysia and Singapore with whom Bangladesh has some free trade agreements. Due to its strategic location at the crossroads between south, east and South-East Asia, Bangladesh is an important promoter of regional potential as well as a strategic country in terms of location allowing for easy access to port facilities and the large Asian markets. Over the last decade Bangladesh has also shown positive growth in its HDI index as well as in its overall politically stability. Due to its location, the subtropical weather in Bangladesh is also natural habitat of saltwater crocodiles, especially in the region of Sunderbans, the world’s largest mangrove forest. As garment and textile exports contribute so heavily to Bangladesh’s export revenue (almost 90%) the Bangladeshi government is trying to diversify its export portfolio. Directly because of this, the government provides strong incentives for export-oriented businesses. These incentives include aspects such as; a lower cost of capital as well as tax breaks granted by the Bangladesh Revenue Board and the Central Bank of Bangladesh respectively. Overall, this provides a very healthy opportunity for Leonardo Farms.

Industry Analysis and Competitive Advantage

Historically speaking, the Crocodile industry has been controlled and dominated by Australia and Papa New Guinea. Together they control almost 80 % of the global crocodile market. Since this industry is labor intensive emerging markets along with their sources of cheap labor are trying to break into this market. Countries such as Egypt and Kenya along with many developing economies are trying to increase their export revenue via innovative business ideas. Comparing minimum Labor Prices between Bangladesh ($2/ day) and Australia ($17.7/per hour) the difference in terms of production cost is exceptional. Due to the competitive fashion market, high-end luxury brand buyers will be moving towards cheaper raw materials with good quality and thus Bangladesh Crocodile farming Industry can take a big chunk of it in the near future. To have a better chunk of the global market share, their needs to be more crocodile farms to have a better bargaining power and also share knowledge such as farms in Australia (Northern Territory case) .

Currently, Bangladesh government has issued 3 licenses according to different sources in the Bangladesh forest department. According to sources, Bhuluka Crocodile farm exported their first shipment of 500 skins at $900/Skin to Japan in 2016. They were also featured in Reuters in 2009 . As this business model is already successful in Bangladesh, this reduces the risk weight for Leonardo farms. There is available skilled manpower and technical person for crocodile farming in Bangladesh. The project in Bhakula, Bangladesh got special credit facility from Bangladesh Bank and also got technical support and credit from World Bank, Bangladesh .

Credits:

Created with images by flok85 - "crocodiles crocodile farm australia" • Damien @ Flickr - "Crocodile Farm" • SomeBaL_ - "@ Crocodile Farm, Miri - Sarawak, Malaysia" • DeusXFlorida (10,211,658 views) - thanks guys! - "Crocodile smile." • SomeBaL_ - "@ Crocodile Farm, Miri - Sarawak, Malaysia" • tamapan - "the crocodile farm crocodile farm samut prakan" • Menswear Market - "Brown Crocodile Leather Loafers" • davecito - "India - Bengal area 1950s" • PublicDomainPictures - "swamp snout cold"

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