WHEN it comes to leather goods, Hong Kong still plays the role of bridesmaid to her better-known counterpart Italy. In spite of increasing evidence that Hong Kong manufacturers have become major producers of leather goods for famous brand names in Italy and the United States, the common perception is that territory goods have yet to equal those of rivals. This misconception has made manufacturers reticent in revealing the established brand which use Hong Kong sourced product, worried that consumer prejudice might deter sales if buyers found that goods under brand names were partly produced in Hong Kong or China. This makes it difficult to actually find which brand names have production bases either in Hong Kong or China. Hong Kong's Trade Development Council (TDC) says in a fact sheet that some famous brands of leather handbags are manufactured in Hong Kong under licence. The chairman of the Hong Kong Leather Goods Manufacturers' Trade Association, Patrick Lee, said: 'The leather goods industry will grow more and more important because Hong Kong is a flexible place to do business. Statistics from the TDC show a healthy growth in the leather consumer goods industry. For the first eight months of 1994, total exports of leather goods grew 20 per cent to $23.68 billion. This compares with total exports for the whole of 1993 which rose 31 per cent to $30.3 billion. Footwear, which constituted 70 per cent of Hong Kong's total exports of leather consumer goods from January to August 1994, has grown fast to become the largest sector of the industry. In recent years, the sector has moved towards the production of high-end women's shoes. This is followed by travel goods and handbags, which accounted for 15 per cent of total exports during the first eight months of 1994. Clothing and accessories accounted for 15 per cent of leather exports during the same period. Hong Kong's high-fashion leather garment manufacturers have earned a good reputation in international markets. The United States is the largest market, accounting for 64 per cent of the total exports, followed by Japan and Germany. From a fashion point of view, Hong Kong has some way to go because the industry is still tilted heavily towards production as opposed to producing its own designs and brand names. 'This industry is still dependent on customers (buyers) own designs,' Mr Lee said. 'I think this is because there is not sufficient training for designers in this field in Hong Kong.' A few companies had built up their own names, such as Goldlion, but their numbers were small. Mr Lee said about 95 per cent of traditional Hong Kong manufacturers had shifted their production base across the border to Guangdong province to escape high costs - a move reflected in the trade statistics. For the first eight months of 1994, domestic exports of leather goods fell 19 per cent to $511 million while re-exportsfrom China jumped 22 per cent to $22.29 bil-lion. Hong Kong's local production of leather consumer goods concentrates on finished items, with the industry relying heavily on imported leather because territory-based tanneries supply less than 10 per cent of basic products. Only a few tanneries and leather finishing factories remain in Hong Kong because of the high cost of pollution control. Despite the relocation of much of the production base, Hong Kong leather goods manufacturers continue to face cost pressures because the base price of raw materials has risen steadily in recent years. Mr Lee said the cost of leather had increased by between 10 and 15 per cent since the beginning of this year over the corresponding period last year. Leather is the major cost component in the sector's final consumer item. Mr Lee said he knew of about 20 manufacturers who had to file for bankruptcy last year. The cost gloom, however, does not spell doom for the industry. 'This is a growing industry. While it may be competitive, there is always room for people to enter the market,' he said. The Asia Pacific Leather Fair, which ended yesterday, illustrated the industry's growing importance. The fair attracted about 3,860 exhibitors this year, up from 3,100 in 1994.