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Ethiopia’s leather industry generated more than USD 120 million in the last fiscal year.
Finished leather accounted for the overwhelming majority of this (82 percent), with gloves (16 percent) and other leather products (2 percent) making up the remainder.
Compared with last year, leather exports went up by 11.4 percent, or USD 12.4 million.
Ethiopia makes and exports a large range of leather goods, including shoe uppers, garments, stitched upholstery, backpacks, purses, industrial gloves and finished leather.
These items are exported to markets in Europe, especially Italy and the UK, the US, Canada, China, Japan and other Far Eastern countries.
Ethiopia made USD 51 million from the export of finished skin and hide. This year the figure has almost doubled, having increased to more than USD 100 million.
Shoe exports also rose in value, by 91 percent, topping USD 19 million.
The export value of gloves and other leather products more than doubled, rising from USD 1.5 million to more than USD 3 million.
The report showed that the export share of the value added leather products went up to 18 percent, compared with the previous year. This is a 94.2 percent increase, according to the report.
The report said export revenue from value added products has increased significantly since the beginning of the Growth and Transformation Plan (GTP) period.
In the first year of the GTP, 2010-11, the export of value added leather products was worth slightly more than USD8.6 million.
Last year, it topped USD10 million.
The export plan of the leather industry, according to the GTP, should have been USD 15 million to 16 million every month.
However, the revenue was limited only to USD 10.5 million for various reasons, including a limited logistics service during the first four months of this fiscal year as a result of the problem at the multimodal transportation system, lack of markets for products, lack of well developed market for skin and hide, electric power shortages and lack of skilled manpower [especially for shoe factories].
Delay in operation commencement of expansion projects and new factories are also factors, according to the report.
Meanwhile, the export revenue for this fiscal year is expected to be USD 300 million, according to Wondu Legese, Director of the Leather Industry Development Industry (LIDI).
Wondu is hopeful that most of the problems will be solved or eased for this fiscal year.
“The multi modal system has dramatically improved,” he said. “Formerly, it required factories three months or so to get their chemicals and other inputs. But now, only days are enough to get them”.
Wondu said the power shortage problem will improve as the government will work on prioritising the manufacturing sector.
“We will discuss the issue with the Ethiopian Electric Power Corporation (EEPCo) via an Industry Committee,’ he said.
EEPCo should supply electric power for the manufacturing sector for 300 working days a year without interruption, according to Wondu.
He also said managers of factories should think of bringing skin and hide from other countries, adding value and exporting it back so as to meet the GTP that the country set three years back.
Currently, the country produces between 16 million and 17 million skins and hides per year, while the demand stands at 48 million.
“We need, therefore, to bring skin and hide from other countries and add value and export it to augment our gains from the leather sector,” he said.
“There are countries that don’t even have skin and hide, but lead the world in export of leather products”.
Another positive factor for the export for this fiscal year is controls on the smuggling of leather products to other African countries, according to Wondu.
“Ethiopian leather products are sold to other African countries including Uganda, Kenya, and South Sudan, among others, illegally,” he said.
“But we are trying to take measures.” As a result, numbers of companies from these countries have been registered here and are buying shoes from merchants in Merkato and taking up to 90,000 pair of shoes, according to Wondu.
At the end of the GTP, the country is aiming to make USD500 million in leather exports.
Prime Minister Hailemariam Desalegn, at the 6th All Africa Leather Fair, held in February this year, urged the leather industry to do what it takes to accomplish this ambitious plan.
He recently pushed government institutions involved in exports to plan big so that the GTP plan would be met.