Ethiopia's leather industry is showing considerable improvement over years. The industry is thriving to make use of modern technologies that will make the sector globally competitive. Recently, Ethiopian Leather Industry Development Institute (ELIDI) has organized a day long conference for evaluating its six month performance report.
Accordingly, it was revealed on the conference that the country plans to get 800 million USD from exports of value-added leather items in the coming five years or in GTP II period. In 2016 the country planned to generate 186 million USD by exporting processed hides and skins.
In addition, it was planned to earn 90.9 million USD in the last six months but the performance is 60 million USD which is 65.6 percent of the target. In other words, the current performance is declined by six million USD compared to the previous year six month export earning. Similarly, it was reported that export earning from leather industry witnessed sharp decline by billion of dollars in many other countries as well.
The reason for the decreasing price could be the increasing shifting technology from hides and skins to non leather and synthetic technologies. The market is shifting to non-leather products currently reaching 75 percent of shoes and other products using synthetic materials, said Leather Industry Development Institute Director General Wendu Legesse.
He said that the depreciation of oil price has opened opportunity for the high production of synthetic materials and have direct contribution for the lowering price of products from skin and hides in the international market.
We are struggling to produce leather products in high volume and quality in the coming six months so that the country's export income from leather sector would significantly be improved, he added.
Wendu also said that quality being the major criteria for penetrating international market is affected by different reasons. The defects that happen before and after the slaughtering animals would affect quality. The poor care in handling of animals such as scratches due to whipping, thorn cuts, brand marking and high prevalence of diseases such as ecto parasites are among the factors that down grade hides and skins, he explained.
According to him, the work of awareness creation has been seriously undertaken. The awareness is on how to preserve the pure skin and leather in store. This requires collaboration of two stakeholders. Those who collect skins and hides and the people whom they are selling to.
Though there are laws about quality standards, sometimes when shortage arises companies have tendencies of accepting the low standard skin and leather. In fact, some companies have improved quality through abiding to the standard and requirement. In this regard, the Institute has been working to enable companies produce high quality processed skin and hides materials by giving thorough training, he added.
Explaining the current leather industry status, Industry State Minister Tadesse Haile said that the industry has continued to be among government priority areas. Leather industry is very important for Ethiopia because the input used for production are obtained from local resources the country is endowed with. Ethiopia has a comparative advantage in this sector due to its huge animal resources, he added.
Needless to say, Ethiopia is home to the largest population of cattle in Africa and the 10th largest in the world. The number of livestock doubled between 1995 and 2010 from 58 million to more than 100 million. Owning to this, the government has given especial emphasis for the sector to play a role in earning foreign currency. In doing so, government is working through establishing Leather Industry Development Institute so as to support the industry. The Institute is backing the industry through conducting research, giving training, consultancy services. Quality control and laboratory testing is also what the Institute is currently carrying out.
The Institute, in collaboration with domestic and international universities, is training students in BA, Masters and Doctoral degrees in leather, shoe technology. This shows the commitment of the government is showing in supporting the leather industry, Tadesse said.
Our leather industry previously was characterized by sending unprocessed or semi-processed leather and leather products; but that trend is currently reversed. These days, leather companies, in the country, are exporting fully processed leather. The production of processed leather requires technology, capacity and ability to implement research results. Five years ago, there was no single shoe made for export. Now, the country is exporting international standard shoes for the global market. In addition to this, the export of glove that was non-existent before has been already started. Therefore, the industry is growing by the amount and variety of products, he explained.
He further said that nowadays, international market competition is becoming tough and leather industry has to give especial attention to quality. It begins with how we handle the animals, how we protect them from diseases and etc. This needs concerted effort of all stakeholders like Ministry of Agriculture, and Animal Protection Authority. We are also expected to correct the marketing system.
The ELIDI Plan and Information Director Tesfaye Birhanu said that in GTP-II especial emphasis has been given to domestic investors. The Institute is aggressively working in collaboration with different ministries to provide a specialized projects for the domestic investors. In doing so, it's planned to consolidate the already begun activities and increase domestic investors satisfaction mainly focusing on the demands of leather and leather products technology plan that directly relates with research and development as well as increasing its product and productivity.
Concerning the job opportunity the industry created during the past six months, Tesfaye said that 3,127 job opportunities were created in the major manufacturing companies. Shortage of raw hides and skins as well as other inputs, insufficient amount of motivations, rent seeking attitude, inability to attract quality investment in to the sub-sector as intended, limitations of modern management and technology capacity are among the problems identified during the six month performance report.
He also said that special attention has been given for encouraging local investors to join the leather industry sector through scaling up their capacity by providing different kinds of credit programmes. Meanwhile, attracting foreign investment is also prioritized for the fast development of the sector.
Upgrading technology for production of finished hides and skins, market expansion and support to a number of pilot factories in the shoe industry and support to the large numbers of Micro and Small/Medium Enterprises (MSMEs), which make up for half of Ethiopia's shoe production in the coming six months, he added.
