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12 | NEWSFOCUS November 20, 2018 www.mygov.go.ke Kenya bids for share of $100b leather market African countries have 15% of the world’s cattle population and 25% of sheep and goats but produce only 14.9% of global output of hides and skins BY ANNE CHERUIYOT “L eather is gold.” These are words of the chief executive officer of Kenya Leather Association Dr. Isaack Noor setting aside his pastoralist upbringing which teaches the value of milk, meat and blood rather than the skins and hides. But he knows what he is talking about. As an expert in the leather industry which is not fully exploited in the country, Dr. Noor is aware that we are sitting on a veritable goldmine. With a population of 50 million, if every Kenyan was to buy locally made shoes, the industry would be up and running. Very fast. Unfortunately we have been unable to tap into this market and today Kenya exports her leather semi processed or worse, raw as what is known as wet blue leather. Despite the soaring demand for the leather products on the world market, Kenya still remains a marginal player accounting for a very meagre percentage of the world exports; in 2013, Kenya’s leather industry accounted for 0.14 of world exports. The leather industry in Kenya produces only 3.3 million shoes against a demand of 42 million. The deficit is met by imports where 26.7 million are non-leather and 15 million being leather. The major player in production of shoes is Bata Company and the Kariokor market with over 300 leather workshops and stalls. They sell locally and to the East African countries. But now, the leather industry stakeholders have come together under an umbrella association Leather APEX Society which was launched recently. During the ceremony held in Nairobi, the chairman Robert Njoka said that the industry has had its challenges. But he sees light at the end of the tunnel as the president’s Big Four Agenda is rolled out. The Big Four Agenda is an initiative aimed at revitalising some key sub-sectors of which leather is one. The government has committed to injecting funds and changing policy in a bid to make leather a leading manufacturing sector. African countries account for four percent of world leather production and developing countries hold 45% share of world trade in leather manufacturing. Import penetration of the developing countries of domestic leather footwear markets by other countries is estimated at 73%. African countries have 15% of the world’s cattle population and 25% of sheep and goats but produce only 14.9% of global output of hides and skins. According to international trade forum 2015, export of hides has fallen in the recent years to below 44% but leather still ranked as a high export commodity. And thus Dr. Isaak’s words that leather is gold. The demand for luxury leather goods is soaring, fueled by a ballooning middle class in China with a taste for fine things, increased travel and increased sophistication in taste. Shoes, belts, jackets, wallets, travel bags and upholstery in leather is in high demand. And it is expensive and considered a luxury product worth having as a status symbol. Half of all leather produced goes to make footwear followed by furniture, clothing automotive industry and saddlery. Globally the leather trade is worth 100 billion dollars per year and supply never meets demand. Leading countries in leather trade include India, Italy, China, Brazil and Vietnam. The only country in Africa making an attempt to get a piece of this pie is Ethiopia which has made some strides in revitalizing her leather industry. And now Kenya. Plans are afoot to set up 5,000 cottage industries, build three leather parks and change the policy to end imports of some leather goods, a move that will see the sector leap forward. The leather industry was thriving until 1990 when it was choked by the importation of cheap second hand shoes. The operating tanneries were reduced from 19 to only four; and despite the industry’s spirited fight to recover they only managed to revive 12 tanneries. Njoka is hopeful that a vi0.14 Percentage Kenya’s leather industry accounted for in 2013 of world exports 3.3m Number of shoes the industry produces against a demand of 42 million. brant leather industry will meet the country’s demand for leather products and his dream is to see Kenyans buy Kenyan products to promote the industry. The resurgence of the in22,000 People employed by the leather industry, majority of them under SMEs. 20m Target number of shoes to be produced under Kenyatta’s big four agenda dustry will not only benefit the entrepreneurs but will also offer employment to the Kenyan youth. Currently, the leather industry alone employs over 22,000 people, majority of them under smallor medium-size enterprises (SMEs). President Uhuru Kenyatta’s target in the big four agenda to produce 20 million shoes by 2022 was received by the industry with both excitement and panic. Excitement because this is a chance to Kenya urged to improve quality of its products Companies should focus on the quality of goods and services more than the quantity, says Chinese envoy BY KURIA DUNCAN, SAMIRA KIBACHA AND MAKAU JOSHUA, KNA-NAIROBI C hina’s acting Ambassador to Kenya Li Xuhang has urged Kenyan entrepreneurs to raise the quality standards of their goods and services to make them more competitive. Speaking in Nairobi last Friday on the recently concluded China International Import Expo (CIIE) in Shanghai last week, the envoy said that for China’s import base to increase, Kenyan companies should focus on the quality of goods and services they offered more than the quantity. He said that the expo was a huge success, as “in a span of six days, it was able to attract a total of 3,600 participating companies and government officials from 172 countries, regions and international organisations across the world”. Li further noted that the promotional result of the world’s first import expo fully demonstrated China’s determination to strengthen cooperation and promote global trade. Cabinet Administrative Secretary for Foreign Affairs Ababu Namwamba, in his speech read by The Deputy Director of Economics in the Ministry Peter Ochieng said that there was a big imbalance in trade, with less export from Kenya to China. He stated that one of the 18,000 objectives of the event was to bring a balance in terms of imports and exports between the two countries. “As government, we are doing something to bridge the imbalance of trade between China and Kenya. That is the aim because we stand for a mutual benefit between the two countries in terms of trade,” said Namwamba. He further said that the way to bridge the gap is by increasing the exports from Kenya to China. The China International Import Expo 2018 was held at the National Convenshowcase what they are made of and panic because of the challenges hounding the industry and present an uphill task to be overcome. Some of the challenges include rudimentary technology, low productivity and limited technical skills that impact negatively on productivity and workmanship. Other challenges are the market and environment concerns, government policies that discourage local production of footwear, dumping of imported foot wear at extremely low prices, weak and underdeveloped footwear and leather products, lack of fitting and accessories that are mostly imported, and irregular supply of good quality leather from the local tanneries. Principal Secretary in the Ministry of Industry, Trade and Cooperatives Betty Maina says the government is committed to developing the leather industry by instituting policies that will ensure the development of the sector. It is envisaged that value addition of leather goods will increase income 12-fold in the next decade. The recent direct flights to the United States and other infrastructure provided by the government provide an opportunity to access that lucrative market. tion and Exhibition Center in Shanghai. It brought together government officials, business communities, exhibitors and professional purchasers from across the world and provided them with new avenues for countries and regions to do business, strengthen cooperation and promote common prosperity of the world economy and trade. As government, we are doing something to bridge the imbalance of trade between China and Kenya. That is the aim because we stand for a mutual benefit between the two countries in terms of trade - Ababu Namwamba

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