Ethiopia moves towards expansion in leather exports

Worldwide, the leather industry is worth an estimated $65 billion USD. (USAID) To industry-insiders, Ethiopia is known for producing some of the finest leather material made from sheep and goatskin. It's being used to make anything from shoes and clothing, to gloves worn by top golfers like Tiger Woods. But despite this, and having approximately 88 million heads of livestock, (Source: Min of Trade) Ethiopia gets only 1% of the total trade in luxury leather. (Source: USAID)

One of the main reasons for this is because, up until now the country hasn't had the knowledge or equipment to produce what's called 'finished' leather. Most of it's output is what's called 'semi-processed' leather. Semi-processed leather is skin and hide that has been cleaned, washed and then exported to tanneries abroad. Finished leather has been further treated in order to modify it to the desired condition, depending on what it will be used for. For example, softened if it will be used for gloves and hardened if it will be used for shoes.

The Ministry of Trade is planning to impose an export tariff on semi-processed leather next year (details not yet finalised) to encourage tanneries in the country to produce more finished leather. The government believes that its foreign currency income from leather can be tripled.

Ethiopian Minister for Trade, Tadesse Haile, says the government wants to export more finished leather, but tanneries need to be improved in order to do so. Ethiopia has 24 tanneries producing around 60% semi-processed and roughly 40% finished leather with an estimated 20,000 people working in the industry.

Move towards producing finished leather and making own range of shoes

One tannery that is moving in to producing more finished leather is the Hafde Tannery - around 20 kilometres (12 miles) outside of the capital Addis Ababa. The Hafde Tannery is now moving towards producing not only finished leather to sell to manufacturers abroad, but it's also starting to make its own range of shoes in Ethiopia. It believes it'll soon quadruple its income and encourages other tanneries to follow suit.

John Moriarty represents UK leather company Pittards in Ethiopia, which has been working in the country for more than 70 years. (Pittards also manages Ethiopia's largest tannery - which is owned by the Ethiopian government.) Until now, Pittards has been buying Ethiopian leather and sending it to the UK to be manufactured in to various products like high-quality sports gloves. It's a major player in the Ethiopian market, buying up to $17mn USD worth of leather per year - which amounts to about 10 million square feet of leather.

Over the years Pittards has been bringing in experts to help Ethiopia improve its leather industry and as a result the company is now planning to attract some of its large glove-making contacts and big businesses to set up operations in Ethiopia.

Teshome Kebede, an expert in leather, says Ethiopia produces around 60% of the world's best gloving leather. The reason it's so good, he says, is because the fibre texture in Ethiopian leather is much denser than other animals and that makes it stronger, even at the thinnest level. But these gloves, and other products, are being manufactured outside of Ethiopia, meaning Ethiopia doesn't receive recognition for its top quality leather.

Teshome is currently working with USAID - the US Agency for International Development - which over five years is pumping $5mn USD into building Ethiopia's capacity to produce better quality and finished leather. He says in the future he wants to see labels on products made from Ethiopian leather reading 'Made in Ethiopia'.

If Ethiopia upgrades its tanneries, the workforce gets better trained and productivity increases, the industry could quadruple (Source: Min of Trade) bringing in millions more dollars.