Leather industry is a potential industry in Indonesia since it can absorb large number of workers and has high value product and utilizes renewable resources. Development of leather industry should be focussed on innovation, technology development and industrial linkage. This research is intended to identify leather industry sector and set their development priority. It uses analytic hierarchy process (AHP) model. For analyzing purposes, it uses expert system software. The result indicates that the strongest criteria are raw material availability, market potential, and market infrastructures. The result shows that the priority sequences of leather industry development are as follows: leather preservation industry, leather craft industry, vegetable tanning industry, and chromium tanning industry. Based on sensitivity analysis, leather craft industry is influenced mostly by the market infrastructure criteria. Based on the result, this research recommends conducting value added analysis for each industrial sector and feasibility study for leather industry development.
Keyword: Planning, AHP, leather industry