ADDIS ABABA: Two Indian government leather development institutions have vowed to transform Ethiopia's leather sector in three to five years and make it globally competitive. Ethiopia has Africa's largest cattle population.
The arrangement has been made by the Central Leather Research Institute (CLRI) and the Footwear Design and Development Institute (FDDI) with the Ethiopian Leather Industry Development Institute (ELIDI). The two Indian institutions will transfer technology and help accelerate the sluggish growth of earnings from the East African nation's leather and leather products export.
During a half-day meeting held at the Sheraton Hotel here, directors of CLRI and FDDI promised ELIDI to provide all the training and necessary support to make Ethiopia one of the top 10 countries in the world in shoe and leather manufacturing.
"If we can't transform the sector in the coming three to five years, then we'd never do it," CLRI director Asit Baran said here.
By the support and training of FDDI and CLRI, the Indian leather industry has created job opportunities for 3.5 million people, generating $3.4 billion every year.
Mentioning the example of Vietnam, which has been able to attract many globally-known brand shoe and leather manufacturers in a short time, Baran expressed his hope that it is also possible for Ethiopia to follow suit by taking advantage of its cheap labour and abundant raw material.
Ethiopia, which stands at the top of Africa with some 50 million cattle, 25 million sheep and 23 million goat populations, has not been earning much from the sector in terms of export. Due to various reasons, only 1.5 million hides and 15 million skins per annum reaches tanneries, according to Solomon Getu, president of the Ethiopian Leather Industries Association and former director of ELIDI.
"Low off-take rates, natural and man-made defects and downgrading of quality of skins have been critical challenges for the development of the sector," said Solomon.
He also mentioned backward technology, poor managerial, technical and marketing skills as well as lack of trained manpower in the sector as additional challenges.
The country expects an annual income of $500 million from leather and leather products after four years at the end of the five-year Growth and Transformation Plan (GTP).
Currently, the country is earning about $104 million per annum from export of leather and leather products. The income was growing at an average of just four percent over the past five years.
According to industry observers, the fact that some foreign companies, which began operations to export finished leather products, are exporting semi-processed products is also among the reasons for the slow growth in foreign currency earnings from the sector.