For Online E-newspaper
The East African : Sep 15th 2014
The EastAfrican OUTLOOK SEPTEMBER 13-19,2014 the world, but there is little to show for it 35 “I think one of the key reasons Ethiopian shoe brands are not known globally or even in Africa is due to the lack of finances. But we are now increasing our outlets across the country and in Africa. Recently, we opened outlets in Khartoum, Sudan and Djibouti. We also plan to do the same in Kenya and Uganda soon,” said Habte. Birhanu Serjebo, the corpo- rate communication director at LIDI said the institute was working on ways to ensure local brands develop. “The major problem we iden- the local market is also a major challenge for the government’s vision of generating $500 million from the export of leather products by the end of 2015. Out of this target, the shoes sector is expected to generate around $360 million from exports. But over the past four years, Ethiopia has made less than $70 million from shoe exports. This does not come as a sur- prise given that the average export price of Ethiopian leather shoes for men is between $12 and $20 while locally, the products are being sold for between $22 and $32. Big brands dominate the mar- ket and survive by outsourcing some of their services including manufacturing plants. They then operate say designing, marketing and logistics departments. “We have no alternative but take the prices they give us if our objective is to generate hard currency from our products. Our company used to produce some of these major shoe brands and it was not a good experience for us,” said Zelalem Habte, the general manager of Ramsay Shoe Factory, whose company is trying to brand itself in the country and neighbouring African countries. tified in Ethiopia’s shoe industry is the lack of raw materials in terms of finished leather,” said Serjebo. “While the total demand of leather in the country is 40 million pieces per annum, we are only producing 21 million pieces. So, our factories are operating under half their production capacity. We are also trying to solve this problem through production of synthetic sport shoes which dominate the global shoe market,” he said. The big picture Ethiopia’s export earning is dominated by primary agricultural commodities such as coffee and oil seeds, that bring in around $3 billion annually while imports are valued at over $11 billion. Official statistics from the Ethiopian Revenue and Customs Authority show that of the total leather products export, still about 73 per cent is earned from finished leather, which has the potential to be converted into other value added products such as shoes, bags, gloves or garment. On the contrary, Ethiopia is still importing large numbers of shoes, leather and plastic products from across the world, spending millions of hard currency annually. Ethiopia is still importing large numbers of shoes, leather and plastic products from across the world, spending millions of hard currency annually.” Above: A shoe market in Addis Ababa; above, right: Duka Leather Products shoe factory; right: shoes on sale at a market in Addis Ababa. Pictures: Andualem Sisay Gessesse In addition as most shoe mak- ing and leather products’ accessories such as synthetic sewing thread, plastic linen, shoelaces, zippers, buckles and the like are being imported, the country is a long way from fully substituting imported shoes with other leather products. “These are also the invest- ment areas we are inviting private investors to,” said the ministry’s Sileshi. “Local institutions have been providing all rounded support to dozens of shoe factories in Ethiopia ranging from product development, consultancy, technology transfer, technical assistance and market support to linking them with potential buyers abroad, even though the manufacturers do not seem to be fully committed to exporting their products.” Chinese shoe manufacturing company Huajian, which has its own shoe city in China, is currently producing 2,000 pairs of shoes every day in Ethiopia. At about $40 per month, the cost of labour in Ethiopia is 10 times less than that in China, Mulugeta Megenas, the owner and manager of Duka Leather Products Factory. Picture: Andualem Sisay Gessesse which stands at about $400. Huajian recently secured 138 hectares of land in Ethiopia where it plans to establish its own industrial zone at a cost of about $2.2 billion. Foreign shoe factories like Huajian with an international marketing network are expected to boost Ethiopia’s foreign currency from the sector but the question begs: For how long will foreign brands dominate the industry?
Sep 8th 2014
Sep 22nd 2014