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Sialkot Tannery Zone: A Game-Changer for Environment & the Industry

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Sialkot has long been acclaimed as a major export-oriented industrial city in Pakistan, known for sports goods, surgical instruments, leather products, and a robust SME ecosystem. The Sialkot Chamber of Commerce & Industry (SCCI) has been central to driving economic development and environmental solutions for this globally connected industrial hub.

One of the most significant sustainability efforts in recent years is the Sialkot Tannery Zone (STZ) — a project designed to modernize leather processing, reduce pollution, and enhance export potential while protecting local communities and natural resources.

What is the Sialkot Tannery Zone?

The Sialkot Tannery Zone is a dedicated industrial area planned to relocate tanneries that were previously scattered across Sialkot city and its outskirts. By clustering operations in a purpose-built zone, the project aims to:

  • Provide centralized waste management
  • Build common effluent treatment infrastructure
  • Improve environmental compliance and public health
  • Strengthen Pakistan’s leather exports and industrial competitiveness

The zone is being developed on approximately 384 acres near Khambran Wala on Kuluwal Road, and tanneries relocating to the zone will have access to modern facilities and cleaner production systems.

This project represents one of the first dedicated industrial clusters in Pakistan designed specifically to address environmental challenges associated with tannery operations — including water and air pollution, hazardous chemical handling, and worker safety.

Why the STZ Matters

Environmental Compliance

Tanneries process leather using chemicals that can contaminate water, soil, and air if not managed properly. Prior to the STZ, about 250–276 tanneries operated in multiple clusters with limited wastewater and air pollution controls, posing risks to public health and the environment. UNIDO

Centralizing operations allows for:

  • Common effluent treatment plants (CETP)
  • Solid waste collection and disposal
  • Improved groundwater protection
  • Compliance with National Environmental Quality Standards (NEQS)

Project Evolution & Collaboration

The STZ concept emerged through sustained advocacy by the business community under the umbrella of SCCI, combined with government policy support and international partners like the United Nations Industrial Development Organisation (UNIDO) and the Global Environment Facility (GEF). Associated Press of Pakistan

Early approvals came from the Export Development Fund Board in 2016, aiming to integrate environmental resilience into industrial expansion — a key priority for global buyers of leather goods concerned about sustainable supply chains. The News International

The Sialkot Tannery Zone has been supported by:

  • Federal and Punjab Government departments
  • UNIDO technical assistance
  • GEF financial backing
  • Active participation of local industrialists, including many leather exporters

Current Status & Recent Developments

While the project has faced delays and administrative challenges over the years, notable progress has been made recently:

🔹 Development Advancing

As of 2025, STZ development is picking up pace with significant infrastructure work such as roads nearing completion, addressing pollution concerns once leather units relocate. Business Recorder

🔹 Financial Support Secured

In mid-2025, a loan agreement between the Punjab Small Industries Corporation (PSIC) and the Sialkot Tannery Association Guarantee Limited (STAGL) secured over Rs 661 million funding to support critical infrastructure, including power and utility connections inside the zone. Nation

🔹 Relocation Timeline

Government and SCCI officials have reiterated plans to complete tannery relocation and ensure all facilities outside the zone cease operations unless compliant by the target deadlines, reinforcing environmental enforcement. Nation

Benefits for Industry and Environment

Boosting Exports

Relocation to a modernized industrial cluster is expected to:

  • Improve leather quality through better processing
  • Meet stricter international environmental and social compliance
  • Attract more orders from global buyers and brands

Public Health and Ecology

Central treatment reduces toxic discharge into rivers, soil, and neighborhoods, improving living conditions for nearby communities.

Economy & Jobs

A centralized zone leads to:

  • More efficient operations
  • Creation of ancillary services (logistics, waste management)
  • Increased competitiveness of Sialkot’s leather exports globally

Sialkot’s leather industry already plays a major role in Pakistan’s export mix, and the STZ is poised to enhance this even further.

Role of Sialkot Chamber of Commerce & Industry (SCCI)

The Sialkot Chamber of Commerce & Industry (SCCI) is the key business body representing thousands of manufacturers and exporters in the region. With over 16,000 active members, SCCI fosters business growth, resolves policy challenges, and drives project implementation such as the STZ.

SCCI’s role includes:

  • Advocacy with government and donors
  • Land acquisition and planning support
  • Coordination with international agencies
  • Ensuring industry needs are reflected in policy frameworks

For more details, see the SCCI profile here: https://scci.com.pk/profile/ scci.com.pk

Looking Ahead

The STZ represents a strategic shift towards modern, environmentally compliant industrial production in Pakistan. While past delays and funding issues have slowed progress, renewed momentum, government backing, and industry commitment point to a future where Sialkot’s leather sector continues to thrive sustainably.

The success of the Sialkot Tannery Zone could serve as a model for other industrial clusters in Pakistan, balancing economic growth with environmental protection in line with global sustainability trends.

External References

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