14 February 2018

Ethiopia: Leather Industry - Developing Sector Boosting Earnings

First in Africa and tenth in the world in terms of cattle population, Ethiopia possesses ample business potential opportunities for leather industry, employment generation, export earnings, and expediting nation's pace towards industrial development.

As sources indicate, the country has about 2.5 percent of the world livestock population with about 57.83 million cattle; 28.04 million sheep and 28.61 million heads of goat. Every year, the nation produces 5 million tons of hides, 8.1 million tons of sheepskins and 7.5 million tons of goat skins.

In view of these resources and identifying the multifaceted rewards in terms of creating more jobs, boosting export and overall economic growth, in the past decades, the government has been striving to develop the leather sector. This is being done mostly through attracting local and foreign investors from across the world and facilitating conducive environment to export high-end leather products rather than semi-processed outputs. And the country has made significant strides in the sector over the last few decades.

Currently, the leather industry is thriving remarkably. Anchor foreigner companies, for instance from Italy, China, UK, India, and Turkey, are operating within the country and the number of tanneries are increasing from time to time. Concurrently, international market destinations are expanding and the amounts of products that are supplied to the global market have increased in volume, variety and quality.

These days, Ethiopian made leather and leather products are exported in large volumes to high quality demanded markets in Europe and other parts of the world. And it is not now surprising to see Ethiopia's leather products in some of the largest shopping malls of Italy, United Kingdom, North America, Canada, Germany, Japan, China, Vietnam, Thailand and in many African markets such as in Kenya, Sudan and Uganda. Consequently, the sector is registering encouraging development and showing promising export revenue.

According to Leather Industry Development Institute the leather and leather product exports have shown substantial increment from 67 million USD to 115.4 million USD between 2004/05 and 2016/17 fiscal years and significant achievements are registered in increasing export volumes, and diversifying goods.

In the first half of the Ethiopian budget year, the country has earned a total of 69.6 million USD from exports of various high end leather products. The amount, compared with the same period of the previous year, surpassed by 20 percent.

Ethiopia's leather industry, as it bases on country's livestock resources, has sizable investment potential and business opportunities. And investing in the sector does not only benefit the country but it also generates high returns to investors. The sector is also enjoying significant international comparative advantages.

Particularly, owing well known sheepskins (in terms of quality, thickness, flexibility, strength and compact structure) that are very suitable for the production of high quality leather garments, gloves and other leather goods apart from creating more opportunities in the world market make the country the right place for leather industry.

Furthermore, government's investment friendly policies and strategies along with the duty free access for markets in USA and EU markets are sector's good opportunities for investors.

Not only these, the enabling and conducive atmosphere in terms of provision of incentives, including duty exemptions on capital goods and five-plus years of an income tax holiday as well as the political and economic situations are the other positive aspects of investing in Ethiopia.

With all these and other favorable investment opportunities, therefore, Ethiopia invites potential investors to take part in country's leather sector that would benefit them hugely.

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