Region
Ethiopia

Sector
Clothing & Textiles
Manufacturing

Summary:

Ethiopia is promoting investments in leather processing to add value to the products, which are largely exported semi-processed. The country's leather is recognized by manufacturers globally for its top quality.

Contact
Aby Berhane

Email
Et.trade@webmail.co.za

Tel
+27 12 346 4583
Fax
+27 12 346 3867

Investment opportunities in leather production

Ethiopia is a mecca for international buyers looking for high quality suede products - its goat skins are reknowned for producing excellent suede. The East African nation also produces two of the world's finest and most-sought-after varieties of leather. Given the existing abundant livestock resource, leather production should ideally be a huge and modern industry. But due to various factors, this is not the case.

There are investment opportunities to invest in tanning, manufacturing plants, and development of technology and design.  

Sector

Ethiopia, which has Africa's largest cattle population 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. The sector is earning about $104-million per annum from export of leather and leather products. Due to various challenges, only 1.5 million hides and 15 million skins per annum reaches tanneries. 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, according to industry observers. Additional challenges are backward technology, poor managerial, technical and marketing skills as well as lack of trained manpower. In September 2011, Indian government leather development institutions pledged to transfer technology that would help boost the sector.

Investing in Ethiopia

Ernst & Young's 2011 Africa attractiveness survey identified Ethiopia among the 17 African countries that will offer attractive Foreign Direct Investment (FDI) opportunities in the next five years. Research from The Economist indicates that the country was among the 10 fastest growing economies in the world over the past decade. Its gold mines and the potential to exploit the recently found natural gas reserves (currently 25bn cubic meters) will attract significant amounts of investment over the next few years. But poor levels of human capital, underdeveloped infrastructure and a challenging business environment are all barriers to investment outside of natural resources.

For further information on investing in the leather industry contact the Ethiopian Investment Agency.

Key contact: Aby Berhane
Economic Counselor
Embassy of Ethiopia
Pretoria, South Africa

Email: Et.trade@webmail.co.za