ETHIOPIAN LEATHER
SECTOR
The Future Hub For Africa
Major divisions of Leather Sector
Support industries of Leather Sector
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•
•
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Chemicals for Tannery
Accessory and Components
Finished Leather
Other synthetic Materials
Comparative and competitive advantage of Leather sector
• Raw Material Resource
• Labor
• Land Availability
CONTENTS OF THE
PRESENTATION
Ethiopian Manufacturing Industry Strategy
Other factors
Logistics
Custom
Taxation
Labor Union and Labor Laws
MAJOR DIVISIONS OF
LEATHER SECTOR
1. Tannery
Total no of tanneries are 32, of which 2 of them are under
investment. 23 of them are owned by local investors and 10 of them are
FDI. The FDI is from China, UK, Italy, India, Sudan, Turkey.
Around 6000 workers are employed.
They have a capacity of 50 million pieces of skin and 5 million hides.
They are located in Addis Ababa and other four regions.
Geographical distribution of tanneries. (Map of Ethiopia)
MAJOR DIVISIONS OF
LEATHER SECTOR
Geographical Distribution of Tanneries in Ethiopia
….DIVISIONS OF LEATHER
SECTOR
2. Footwear industries
22 medium and large scale footwear manufacturers which have a capacity of 12
million pairs.
More than 1000 micro and small footwear manufacturers which contributes for
90% of local market.
It is planned to reach 35 million pairs of production and 21 million pairs of
export.
More than 12000 workers are employed.
Almost 95% are located in the capital.
Labour productivity at present is 3 pairs in average.
….DIVISIONS OF LEATHER
SECTOR
1. Leather Goods and Garment
5 glove manufacturing factories , 2 of them are under investment
50 micro, small and medium leather goods and garment
manufacturers.
2000 workers are employed.
The weakest link of the leather sector in Ethiopia.
High potential area for both local and Foreign Investors.
SUPPORT INDUSTRIES FOR
THE LEATHER SECTOR
1. Tannery Chemicals:
Few Chemicals are produced in Ethiopia. Such as salt, lime,
soaking, liming and bating enzymes, sulphuric acid, and some
blending of fatliquors also done.
Most of the chemicals are imported.
Some chemical suppliers has a bonded warehouse facility like
Stahl, BASF, C and E limited, Repico.
SUPPORT INDUSTRIES FOR
THE LEATHER SECTOR
2. Accessory and Components:
Shoe boxes, Lasts, Molds, cutting die, soles(PU, PVC, TPR and TR) are
produced. But it is not in enough quantities and it covers only 30% of the need .
Adhesives are also produced and it covers 50% of a need.
Suppliers are taken bonded ware house permission to supply for the foot wear
as well as other leather product industries.
But also other accessories can be imported free of tax by the manufacturers.
SUPPORT INDUSTRIES FOR
THE LEATHER SECTOR
3. Finished Leather :
More than 100 million square feet of finished leather produced annually. Of which
72 million is from sheep and goat skin and 34 million is from cow hide.
More than 60 million square feet from sheep and goat and 10 million from cow is
exported annually .
There is a possibility of producing up to 500 million square feet at present capacity
of tanneries..
There are no leather product factories which are grown to take all the finished leather.
Quality finished leather manufacturers like Farida and United Vasan is entered in the
production.
C O M PA R A T I V E A N D C O M P E T I T I V E
A D VA N T A G E O F E T H I O P I A F O R T H E
SECTOR
1. Raw Material
Good Raw material base from all African countries.
Quality sheep skins for glove, shoe upper, garment and other
leather goods.
Very good type of goat skins.
Hides with high tensile strength.
ETHIOPIAN CATTLE
There are 53 million heads of cattle.
No 1 in Africa and 6 in the world
interms of population
5 million hides are produced
annually.
Fine grain and dense
Good for shoe upper both for ladies
and gents
ETHIOPIAN SHEEP
SKINS
Fine grain
70% is from red hair group
Highly utilized in gulf glove
It can be shaved until 0.3 mm
thickness with out loosing its
strength.
Glove manufacturers are coming to
Ethiopia to invest for the good
character of skins.
ETHIOPIAN GOAT SKIN
Found in large amount
3rd in Africa next to Nigeria and
Sudan
7.5 million skins are collected
annually.
High tensile strength
Very good for any suede product
C O M PA R A T I V E A N D C O M P E T I T I V E
A D VA N T AG E O F E T H I O P I A F O R T H E
SECTOR
2. Labour Force
60% of the population is young force.
Easily trainable
Minimum wage , unskilled 60-70; Semi-skilled 80-90 ; Skilled 90-110; Professional
120-150 USD per month. This is one of the comparative advantage for Ethiopia.
It is highly desiciplined if it is managed properly. They need human treatment only. I
Pro development of Labour Unions.
Communication in English is not that much difficult.
C O M PA R A T I V E A N D C O M P E T I T I V E
A D VA N T AG E O F E T H I O P I A F O R T H E
SECTOR
3. Land Capital
Minimum Lease
Easily Available for manufacturing industries
Industry zone development is growing by JV which the majority
share and mgt is for private, and by government.
OTHER FACTORS
Other factors
Logistics
Infrastructure
Custom
All types of Taxation
Training centers (LIDI and other TVET centers)
Peace and security of the country.
INFRASTRUCTURE
1. Power
we reach to have 2200 MW
Another 1800 MW will be added after 2-3months time.
The new Great renaissance dam is started and to be finished the
coming three years. It will generate 6000MW energy.
We have a capacity of producing morethan 50,000MW energy.
ETHIOPIAN AIR LINES
A member of star Allinaces
Following is a list of destinations Ethiopian
Airlines flies to as part of their scheduled
services. As of July 2012, the carrier serves 56
passenger destinations in Africa —17 of them
domestic ones—, nine in Europe and the
Americas, and 14 in the Middle East and Asia.
The airline also operates a cargo network of
22 destinations, 13 of them in Africa, two in
Europe, and seven in the Middle East and
Asia.
ETHIOPIAN SHIPPING
Although Ethiopia is land locked
country, It operate with own
shipping line at the port of Jibouti.
The port of Jibouti is 800 KM from
Addis.
We have 11 vessels and another 8
are ordered. Of which 2 of them
are submitted from china.
We have 4 dry ports.
ETHIOPIAN RAIL WAY
CORPORATION
Previously T was Established in
1904
It was only from Jibouti to Addis
Ababa.
Now that is demolished because of
its back ward structure.
Now it is again reestablished in
2006.
The construction is started and
ADDIS JIBOUTI will be over in
OCT 2015, this year.
TYPES OF TAXES
Turn over tax
Value added tax
Income tax
With holding tax
Excise tax
SUPPORT INSTITUTES
MOI
LIDI
TVET CENTERS
STANDARD AGENCIES
OTHER Development partners, Like UNIDO
SUPPORT INSTITUTES
Leather Industry Development
Institute;
1.
Duties and Responsibilities
2.
Facility
3.
International Relation and
Capacity building Project.
ETHIOPIA IS A
COUNTRY OF PEACE
1.
The status of peace and security
is high
2.
Ethiopia is also one of the
country who serves for world
peace by assigning peace keepers
in different African countries.
LET US DEVELOP TOGETHER
Ethiopia
Italy
THANK YOU