Paycueros one of Uruguay’s key tanneries, warns of a long-term decline in leather manufacturing operations. The company recently met with the Senate’s Labor and Social Security Committee, where it confirmed that maintaining past production levels is no longer possible under current global market conditions.

“It is practically irreversible that today, in the global context, the Paysandú plant can no longer manufacture the same volume of hides as it used to,”

Diego Stein, Director, Paycueros

The company has assured that the plant will remain active, but only to supply the regional market, not international clients. The shift comes as a result of changing global demand, logistical challenges, and increased competition, particularly from Asian markets.

According to Paycueros’ legal advisor, operating from northern Uruguay poses logistical disadvantages. In the current market, Asian buyers demand deliveries within 15 to 20 days, a turnaround that is nearly impossible to meet when shipping from South America.

Director Diego Stein added that the leather trade is moving rapidly toward Vietnam, Indonesia, India, and Cambodia, and away from traditional hubs like China.

This shift, combined with a decline in meat consumption, the fall of leather use in fashion and automotive, and the rise of synthetics, has put immense pressure on traditional tanneries like Paycueros.

Paycueros continued operations through the end of last year, but now admits that making leather in Uruguay may no longer be a viable medium-term option. The company is being forced to reshape its regional production model, focusing only on limited markets where it can still compete.

In the face of declining demand, workers have requested extensions of unemployment support, but the company does not foresee any increase in activity in Paysandú for the remainder of the year.