Ethiopia’s strategic move to fully utilize its leather potential

Ethiopian leather and leather products await a bright future. The country has faced different challenges while developing the sector over the past decades. However, the government has now proposed new strategies and policy measures to activate the sector.

Ethiopia is generously endowed with animal resources, according to the Central Statistics Agency (CSA). Its cattle herd of more than 53 million, as well as its sheep and goat populations of 25.5 and 24.1 million respectively, place the country first in Africa. With an annual harvest rate of nearly 10 percent for cattle, 33 percent for sheep, and 38 percent for goats, the country has enormous potential for supplying hides and skins at low prices.

Ethiopian goat and sheep skins are renowned for their superior quality. Yet Ethiopia’s share in the world trade in leather and leather products is tiny. Currently, however, the Ethiopian government has duly recognized this potential and efforts are underway to harness the potentials of the sector. Likewise, the government has been actively involved in promoting the industrialization of the leather value chain.

According to the Ethiopian Investment Commission (EIC), the leather sector is one of Ethiopia’s main manufacturing sectors. In recent times Ethiopia has mainly exported finished leather, followed by growth in footwear exports. Other leather goods, including gloves, bags and small leather goods, have significant exponential growth potential. The recent expansion in the production of leather gloves is proof of the existing capacity as well as the export potential with constant growth in volume and value. Over 75 domestic and foreign leather and leather products factories have invested in Ethiopia. Leather exports, which were USD 23 million in 2013, reached USD 133 million in 2018.

Recently, the Ministry of Commerce and Industry revealed that preparations are underway to establish a new leather-specializing city in the country. The city is expected to adopt the latest high technology and well-established leather and leather goods manufacturing industries.

In addition, Ethiopia is selected to host the 12th Pan African Leather Fair (AALF) and the 5th World Leather Congress from November 3-6, 2021 in Addis Ababa, the Minister of State of the Ministry of Trade and Industry, Teka Gebreyesus, said the promising growth of the Ethiopian leather industry has experienced over the years constitutes the competitive advantage of the country to choose as the venue for the event.

The Minister of State further said that the trade fair and congress would provide African leather goods manufacturers with an excellent opportunity to enter the international market. The event will also provide business-to-business networking opportunities among attendees.

More than 5,000 participants from 250 international leather goods manufacturing and exporting companies as well as researchers from over twenty countries are expected to attend the event. The fair also aims to create opportunities for attendees to share experiences, harness potentials and motivate new innovations, among others, Teka added.

Currently, the Ethiopian government is actively working on the development of specialized industrial parks (IPs) for textiles and clothing. “Ethiopia is considering making the city of Modjo in Oromia State the hub of the leather industry and is considering attracting the participation of flagship companies, thus turning the city into one of the cutting-edge tannery centers in Africa, ”he noted.

Modjo’s leather hub is expected to create employment opportunities for more than 30,000 Ethiopians. Apart from this, the project will promote the contribution of the private sector and multinational investors to the development of the country’s leather sector. More than 200 million USD are allocated to the realization of the project.

Hawassa Industrial Park, Bole Lemi Industrial Park and Kombolcha Industrial Park are among the major industrial parks specializing in textiles, clothing, leather and leather products. China, Hong Kong, United Kingdom, Thailand, Italy and India, among others, are the main export destinations for Ethiopian leather and leather products.

The availability of raw materials, access to a large market, an abundant and young workforce at competitive labor costs, a privileged geographical location and strong export performance, among others, are the main benefits for investing in Ethiopia’s leather and leather products sector.

African Leather and Leather Products Institute (ALLPI) Advisor Mekonnen Hailemariam (Professor) said the event will create the opportunity to enhance research and development, technology transfer and innovation as well as marketing gateways to the African leather industry.

Hailemariam underlined that ALLPI contributes to the modernization of the leather industry in Africa by integrating the latest technologies of the sector. The conference and exhibition will discuss ways to improve the leather industry in Africa and come up with possible solutions to alleviate bottlenecks in the sector.

According to the Ethiopian Chamber of Commerce and Sectoral Associations (ECCSA), Ethiopia’s leather industry started around 90 years ago, when the Asko Tannery, now known as Tikur Abay Shoe Factory, opened its doors. doors for the first time. 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, there is a huge market for shoemakers serving the domestic market with wholesale stores selling leather, soles, shoe accessories and retail shoe stores. At the same time, a number of factories are active which produce shoes for the export market, including Sole Rebels, Oliberté and Enzi. The leather and leather goods sector contributes on average about 6-8% of the gross value of the product of all manufacturing industries and contributes about 6% to the national GDP.

Accordingly, the expansion of export destinations for African leather products is the top priority of the show and congress. Currently, various multinational investors are joining the investments in the untapped leather sector of the country. Among these, the two Chinese manufacturing investment firms Huajian Group and Hong Kong’s New Wing Group have taken the industry lead in making giant investments in Ethiopia. These companies are both shoemakers who have worked on fulfilling US and European original equipment manufacturing (OEM) orders, so 100% of their Ethiopia-made products will be exported. Moreover, these companies only produce shoes for women, while local companies focus almost exclusively on shoes for men.

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