This is a 500g block of fine polishing compound made from a mixture of fine abrasives and greases. Used in combination with a sharpening strop, it's fantastic for perfecting the sharp edge on your leather knives.
If your knife is fairly blunt, it's best to sharpen it on either a very fine traditional sharpening stone or diamond sharpening block first, and then use a strop with polishing compound/rouge to perfect the cutting edge.
Once your knife is sharp and working well for you, you can just freshen the edge with a strop and this polishing compound. This is a very generous half kilo block, so it will last indefinitely!
* Handy hint: There are some excellent video tutorials on You Tube covering knife sharpening for leather craft.