BY TEWODROS KASSA
Ethiopia’s leather and leather products await a rosy future. The country has been facing different challenges along with developing the sector for the past decades. However, the government has now come up with new strategies and policy measures to activate the sector.
According to the Central Statistics Agency (CSA), Ethiopia is generously endowed with livestock resources. Its cattle population of more than 53 million, along with sheep and goat populations of 25.5 and 24.1 million respectively, put the country first in Africa. With an annual off-take rate of nearly 10 percent for cattle, 33 percent for sheep and 38 percent for goats, the country is endowed with enormous potential for cheap supply of skins and hides.
Ethiopian goat and sheep skins are known for their superior quality. Yet Ethiopia’s share in world trade of leather and leather products is tiny. Currently, however, the Ethiopian government has given due recognition of this potential and efforts are underway to harness the potentials of the sector. Likewise, the government has been actively involved in the promotion of industrialization in the leather value chain.
According to the Ethiopian Investment Commission (EIC), the leather sector is one of the leading manufacturing sectors for Ethiopia. Of late, Ethiopia is exporting mainly finished leather followed by growing shoe exports. Other leather items including gloves, bags and small leather articles have a large potential for exponential growth. The recent expansion in leather gloves production is proof of existing capacity as well as the potential to export with a steady growth of volume and value. More than 75 domestic and foreign leather and leather product factories have invested in Ethiopia. Export of leather, which was 23 million USD in 2013, reached 133 million USD in 2018.
Recently, the Ministry of Trade and Industry disclosed that preparations are underway to establish new leather specialized city in the country. The city is expected to embrace the latest technology advanced and well-established leather and leather products manufacturing industries.
Moreover, Ethiopia is selected to host the 12th All-African Leather Fair (AALF) and 5th world leather congress from 3-6 November 2021 in Addis Ababa, Ministry of Trade and Industry State Minister Teka Gebreyesus said that the promising growth Ethiopia’s leather industry has experienced over years constitutes the competitive edge for the country to be chosen as the event’s venue.
The State Minister further stated that the trade fair and congress will avail a great opportunity to African leather goods manufacturers to penetrate the international market. The event will also provide opportunities for business to business networking among participants.
More than 5,000 participants drawn from 250 international leather goods manufacturing and exporting companies as well as researchers from over twenty countries are expected to take part in the event. The trade fair also seeks to create opportunities for the participants to share experiences, harness potentials and motivate new innovations, among others, Teka added.
Currently, the Ethiopian government is aggressively working on developing specialized Industrial Parks (IPs) for textile and garment. “Ethiopia plans to make Modjo town of Oromia State the hub for leather industry and envisions to attract anchor companies’ involvement thereby transforming the town into one of the state-of-the-art tannery centers in Africa,” he remarked.
The Modjo leather hub is expected to create job opportunities for more than 30,000 Ethiopians. Apart from this, the project will promote the private sector and multinational investors’ contribution to develop the country’s leather sector. More than 200 million USD is allocated to realize the project.
Hawassa Industrial Park, Bole Lemi Industrial Park, and Kombolcha Industrial park are among the leading industrial parks working specializing in textile, garment, leather and leather products. China, Hong Kong, UK, Thailand, Italy, and India among others, are the leading export destinations of the Ethiopian leather and leather products.
Raw materials availability, access to wide market, an abundant and young workforce at competitive labor costs, a privileged geographic location, and strong export performance, among others are main advantages for investment in the Ethiopian leather and leather products sector.
Advisor to African Leather and Leather Products Institute (ALLPI) Mekonnen Hailemariam (Professor) for his part said that the event will create the opportunity for enhanced research and development, technology transfer and innovation as well as marketing gateways to the African leather industry.
Hailemariam highlighted that ALLPI is contributing its part towards the modernization of Africa’s leather industry through integrating latest technologies in the sector. The conference and exhibition will deliberate on ways to enhance Africa’s leather industry and forward possible solutions to ease the sector’s bottlenecks.
According to Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA), the leather industry in Ethiopia started some 90 years ago, when the then Asko Tannery, now known as Tikur Abay Shoe Factory, first opened its doors. The success of this factory nurtured a number of shoemakers, who subsequently established their own factories in Addis Ababa and across the country. Today, in the Merkato district of Addis Ababa, a huge marketplace exists for shoemakers serving the domestic market with wholesale shops dealing in leather, soles, shoe accessories, and shoe retail stores. At the same time, a number of factories are active that produce shoes for the export market, including Sole Rebels, Oliberté and Enzi. The leather and leather products sector contributes on average about 6-8 percent of the gross value product of all manufacturing industries and contributes about 6 percent to national GDP.
Accordingly, expanding African leather products export destinations is the utmost priority of the fair and congress. Currently, different multinational investors are joining investment in the country’s untapped leather sector. Among these, the two Chinese manufacturing investment firms Huajian Group and Hong Kong’s New Wing Group have taken as a leading in the sector regarding undertaking giant investment in Ethiopia. These firms are both shoemakers worked on fulfilling American and European Original Equipment Manufacturing (OEM) orders, so 100 percent of their Ethiopian-made products will be exported. Moreover, these firms produce only women’s shoes, while local firms focus almost exclusively on men’s shoes.
The Ethiopian Herald August 6/2021