Ethiopia is currently engaged in war ignited by the terrorist TPLF and to defend its territorial integrity, the combating defense forces sacrifice their life for the holy cause.
The war also incurs economic cost to the nation hence; to withstand the possible crises boosting the export sector is taken as a way out. Among the preferred sectors which can tap the foreign market is the leather and leather products.
According to the Ministry of Trade and Industry, in Ethiopia about 8 million cattle hide, 12 million of sheep skin and 8 million of goat skin are available in the market. There are 34 tanneries and all are owned by local and foreign investors and created job opportunities for thousands.
The amount of leather and leather product export is increasing from year to year and currently the nation annually earns 300 million Dollars from processed leather and leather products.
It is learned that the nation has a potential to garner up to 1.5 billion Dollars annually. However, due to informal slaughtering and lack of sufficient value chain the nation is unable to utilize the resource for economic advancement.
The government in its 10 years perspective home grown economic growth plan aspires to garner up to one billion Dollar from the leather industry.
Zelalem Merawi is the manager of KER EZKI Ethiopia engaged in manufacturing leather and leather products. As to him, while others currently sacrifice their life in the war front he and his company engaged to support the war through money contribution and creating job opportunities to citizens. In the coming five years he tries his level best to enhance the number of the workers up to 500 and to enhance the export.
Currently, the company leather and leather products are penetrating the USA, Europe and Asian markets.
Of late, in the world market annually 250 billion Dollars is circulated in the leather and leather products market which surpassed the price of wheat and medicine annual money circulation in the market and this clearly indicates the sectors potential in garnering foreign currency and create job opportunity to citizens.
To benefit from the market’s potential KER EZKI Ethiopia opened shops in Washington DC, Bole international airport, near Ednamol cinema, Sarbet, Case-insis and Kuriftu resort in Debrezeit town. In addition, it strived promote the Ethiopian leather products brand in the foreign markets.
It is understood that our country has high livestalk population in Africa but its contribution to the economy is insignificant. The utilization of cattle skin and hide as input in the leather industry is still under developed.
As to Zelalem, the least price set for the skin in the market which is 10 Birr per head forced cattle raisers to pay less attention to properly maintain the skin and hide. Traditionally, both in the low and high land parts of the country cattle rearing practice only value the cattle meet rather than the skin and hide.
Whereas, in the outside world more attention is paid to the skin and hide and there is a viable market. Hence, providing incentive and trainings to cattle raisers is essential. Currently, while middle men purchase hide and skin 10 Birr per head, amazingly the processed skin will be sold up to 300 Birr. Hence, to benefit cattle raisers from their wealth such unfair situation must be reversed to the better.
According to Zelalem, the government encourages both local and foreign investors to involve in the leather business and similar to countries such as Europe, USA, China and India planned to establish leather cities so that investors could easily acquire places to begin production. Currently Mojo town is selected as leather city. The other countries experience indicates that, each leather city has its own specialization.
Producing leather products pass through various processes. The raw skin and hide first must pass some process and changed in to leather and this must be performed in one city. In the next step, it will be coated and pass to the other process and will go upto the end to be finished good. This working process shows how division of labor works in each leather cities. In Ethiopia, the current practice in the leather products production doesn’t reach to this level and most leather manufacturing do all jobs from A to Z which is unprofessional. Therefore, it must be changed in to the modern one through specializing in one type of product.
Urban centers such as Adama, Addis Ababa, Hawassa, Bahirdar, Gonder, Desie, and Diredawa can be taken as preferred places for the establishing leather cities.
In urban places there are sufficient well trained personnel which can work in the leather industries with various specializations. Hence, the sector in addition to creating job for urban unemployed, it helps import substitution and boost export. It is known that, the nation spends its meager hard currency to import shoes and other leather products.
Zelalem further stated: “Currently approximately, Ethiopia is a country for over 100 million inhabitants and we can assume that half of them are women. Out of them, if 10 million women need bags and use two bags per year, annually they need 20 million bags and if one bag is sold by one thousand Birr only by this product the sector could earn 2 billion birr.”
Similarly, out of the 100 million people, if there is shoe demand by 90 million people, the leather industries could obtain sufficient market and in such a way it is possible to boost the nation’s income and create job opportunity for thousands and substitute the imported shoes.
Zelalem said that traditionally the public assumed leather factories as if they are unfriendly to the environment but it is totally a wrong conception. Even some financial institutions have wrong attitudes towards leather producers. When loan request is forwarded to them, they do not provide quick response and thought that their loaned money will be liquidated. Therefore, strong work is needed to change such attitude.
Ethiopia is in advantageous position to tap the African leather and leather product market. The African Trade Preferential stipulates that, the export product must utilize 70 percent of its inputs derived from local sources this again enable to create strong value chain locally which connect cattle producers, abattoirs, traders and manufacturers. In addition the value chain will be stretched globally up to the whole sellers and retailers. Hence paying attention to the sector is essential.
In order to tap the African leather market countries which has no experience in leather production are involving in the business.
South Africa, Kenya and Egypt can be mentioned in this regard. Uganda and Tanzania are establishing new tannery by bringing experts from abroad.
Asked what solution to be forwarded in addressing complaint raised from some corner regarding shortage of chemicals and salts used as input in the industries Zelalem said that, salt is a local product and it should not be mentioned as a problem and the shortcoming is artificial posed by corruption and mismanagement. He also said that most industries utilize 90 percent of their inputs from local sources only they import 10 percent of their inputs from abroad. Hence, the government should allocate foreign currency to the producers so that they can easily import it.
According to the Ministry of Trade and Industry, countries such as United Kingdom, Italy, Thailand, India, Vietnam and Indonesia are the destiny of Ethiopia’s Leather and leather products.
BY ABEBE WOLDEGIORGIS
ETHIOPIAN HERALD NOVEMBER 30/2021
