By Vandana Prakash Nair
The leather sector is a valuable contributor to economic growth and employment generation in many countries across the globe. The growing industry in East Africa offers significant opportunity for business collaboration and investment. With this in mind, SITA organised its first leather investment mission to Ethiopia and Rwanda (2-6 July 2018) for members of India’s Council for Leather Exports (CLE), expanding on its leather activities in East Africa from successful interventions in Tanzania, Kenya and Uganda in November 2016 and December 2017.
It was a mission of contrasts. Ethiopia boasts the largest livestock population in all of Africa and a fully developed leather industry. On the other hand, Rwanda’s leather industry, is still at a nascent but growing stage. Even so, the quality of its livestock is excellent. The two countries do share some commonalities; both countries consider leather a priority sector. Furthermore, both countries present exciting investment opportunities for Indian investors.
The 17-member Indian delegation led by Mr. Javed Iqbal (Regional Chairman – Central Council for Leather Exports) consisted of representatives from across the value-chain of India’s leather industry. They hailed from the five Indian leather clusters of Delhi, Kanpur, Agra, Jalandhar, and Chennai.
The delegates were first introduced to the Ethiopian and Rwandan leather industries at investment roundtables held in Addis Ababa (2 July) and Kigali (5 July). In both countries, value- addition was the name of the game. The investment roundtables particularly underscored the high-level government and industry support for the development of the leather sector.
Ethiopia’s State Minister of Industry H.E. Bogale Feleke pledged to mobilise an Ethiopian delegation for the upcoming India International Leather Fair in Chennai in February 2019. Meanwhile, Rwanda’s leather sector is bolstered by the country’s Made in Rwanda policy, specifically geared toward developing the value chains of its priority sectors.
At the investment roundtable in Kigali, H.E. Michel Sebera, the Permanent Secretary of Rwanda’s Ministry of Trade and Industry (MINICOM), highlighted the extent of untapped opportunities for value addition, ‘Export of raw hides and skins and semi-processed leather brings US$12 million to the country. However, transferred into finished products it could generate US$130 million,’ he said.
Following the investment roundtables, SITA facilitated B2B meetings between Indian and East African businesses during which Indian investors were able to establish linkages with local businesses.
Field visits were then organised for the delegation according to the delegates’ various business interests. The visits were crucial for Indian investors to understand the state of the local industry, develop contacts and initiate discussions on possible partnerships with local companies. In Ethiopia, some delegates visited nine local tanneries in Modjo and Addis Ababa while others visited seven footwear and leather goods companies in Addis Ababa.
In Rwanda, the delegates were particularly inspired by a visit to Abahizi Dushygirane Ltd, a leather goods manufacturing company in the village of Masoro. Employing 204 artisans, of which 90 percent are women, Abahizi manufactures premium leather handbags for luxury companies like Kate Spade & Company and Coach. Such were the standards of the cooperative’s business model, management, quality controls and productivity, that one delegate, Mr. Anil Sondhi suggested, “This is an interesting concept that should be replicated in other countries in the region as well.”
The visits revealed concrete business opportunities for Indian investors; for example, three Ethiopian tanneries are currently on sale or open to joint venture partnerships. Other interesting opportunities lie in the absence of components and accessories manufacturing units in both countries that could cater to the entire African market given the recently signed Africa Continental Free Trade Area agreement.
At SITA, we are eager to explore these opportunities further in Ethiopia and Rwanda with our Indian investors. After all, there is nothing quite like fine leather.