African Leather Industry Market Research Report

The report on the leather industry market in Africa has changed dramatically in the ten years since the end of twentieth Century and the beginning of twenty-first Century. The history of leather manufacturing industry in the world has changed greatly, and the days when developed countries supplied raw materials to developed countries in Europe and the United States have become history.

Major leather production in the Asia Pacific region such as China, Vietnam, India, Pakistan and Thailand has undergone a new and larger development. The European leather industry represented by Italy, Spain and Germany has been shrinking year by year due to the increasingly stringent environmental regulations, the increasing labor costs and the shortage of raw materials. The American leather producing countries represented by Mexico, Argentina and Brazil have formed a competitive position with Asian leather producing countries with their raw material resources advantages and advanced leather making technologies. Africa has abundant raw material resources, but the leather industry is developing slowly, which is the best region and the competitive place for the leather industry development and investment of some countries in the world.

The development level of leather industry in Africa: East Africa, South Africa and West Africa: three African industries are still driven by the availability of raw skins.

Most factories turn leather into the newest wet blue leather, and these areas have become the export base of large leather products.

South Africa with the developed leather industry is an exception, importing raw materials from neighboring countries only.

North Africa: leather industry in North Africa has a longer history than other parts of sub Saharan Africa.

The North African countries - Egypt, Morocco and Tunisia - are closely related to the European leather industry (especially the developed Italy leather industry).

As a result, these countries have shifted from producing large quantities of leather to producing leather products (mainly footwear).

Informal sector: the informal (manual footwear and leather products) sector played a very important role in the manufacture of leather products, especially footwear, before most countries in the world liberalized their economies.

In Kenya, for example, it is estimated that the Department produced 60% of footwear and leather products in the mid 80s.

Considering the low cost, basic training and cheap tools needed to enhance the competitiveness of the people who intend to start new businesses and enhance their product design or marketing skills, the footwear and leather products sub sectors have great potential in job creation.

The status quo of leather industry in some African countries: Ethiopia leather industry: according to statistics from relevant parties, the world's annual output value of leather is about 12 billion dollars, an average annual growth of 2%.

The major leather export countries are Italy, South Korea, the United States, Germany and Argentina, which account for 26%, 10%, 7%, 6% and 6% of the world's leather exports respectively.

The major leather importing countries and regions are China, Hongkong, Italy and the United States, accounting for 15%, 14%, 12% and 9% of the world's leather imports respectively.

The statistics show that there is great potential in the world leather market.

Ethiopia ranked first in the number of livestock in Africa, tenth in the world.

According to the latest data released by Ethiopia Ministry of agriculture and rural development, in 2004, Ethiopia had 40 million cows, 24 million sheep and 23 million goats.

The slaughtering rates of cattle, sheep and goats were 7%, 37% and 33%, respectively. The herdsmen supply leather processing plants about 2 million 400 thousand pieces of cattle hide, 8 million sheep skins and 7 million goat skins each year, and the leather processing plant has an annual output of 1700 to 18 million sheets of leather.

Most of Zhang Pi bought the farmers through small middlemen. In addition to natural damage, the traditional slaughtering, storage, storage and so on were also damaged to a certain extent, and the cortex was poor.

But the sheepskin raised at Ethiopia plateau has good toughness and other excellent qualities.

In the leather processing plant, half finished leather is 86%, and finished leather is 14%.

Zhang Pi is processed into pickled skin, wet blue and hard outer skin for export or processed into leather, and produces leather shoes, fur clothing, gloves, bags and tourist products locally.

The leather industry basically meets the demand for semi-finished products and finished products export market and domestic market. Most leather processing plants mainly export semi-finished leather, and 20% of the exported leather is supplied to the domestic market.

Ethiopia began developing leather and leather products 8 years ago.

At present, there are 20 leather factories, 9 factories are processing semi manufactured leather, the rest are leather goods factories, 4 of them are state-owned, and 16 are privately owned.

Leather and leather products earn only half of their foreign exchange earnings.

In 2001, 2002, 2003 and 2004, the export earnings of semi-finished and finished cattle and sheep skins were 17.2%, 14%, 11% and 9% respectively.

Essex's sheepskin is mainly exported to the Middle East, Europe, Southeast Asia and African countries. Live goats and sheep are mainly exported to Saudi Arabia, the United Arab Emirates, Yemen and Kuwait. The cowhide is mainly exported to Italy, France, Holland, the United Kingdom, the United States, Spain, Germany and Japan.

In recent years, the development of leather processing industry has been slow, and the leather factory has not started enough.

From 2001 to 2004, the export volume of leather and leather products was only $57 million, and the foreign exchange earnings of the products showed a downward trend.

According to the present situation of the development of Ethiopia leather industry, although Ethiopia has abundant resources of Zhang Pi, it has not been fully utilized. The processing capacity of Zhang Pi is also limited. Most of the products produced by the leather factory are semi-finished products, and the deep processing of leather, such as leather shoes, leather goods and other products, is relatively low.

The main reasons are: lack of high-tech personnel, market, technology, patents, technology, capital and corresponding supporting measures. The leather and leather products produced are not competitive, thus affecting the development of leather industry.

In order to develop leather industry, the government has listed leather and leather products as one of the priority areas.

The short-term strategy of the government is to increase the production capacity of wet blue or low-grade leather into pickled skin, finished leather and leather products. In the absence of finished leather, investors are encouraged to import from abroad, and the government is exempt from tax. The long-term strategy is to gradually expand the number of sheets for leather processing.

In terms of investment, the government has taken the following measures: public private cooperation, export tax incentives, export credit guarantee, providing long-term credit for investment funds and industrial purposes, tax exemption for imported raw materials and finished products, and reduction of related pport and pit service charges.

In order to encourage investment, Ethiopia stipulates that capital goods such as machinery and equipment, building materials, and 15% of the value of capital goods can be exempted from import duties and can be pferred to the equally qualified investors.

Import duties and import duties on raw materials used for manufacturing export products can be refunded.

According to the investment domain, geographical location and export products, the income tax is exempt from 1-7 years.

If there is a loss during the period of tax exemption, the duty-free allowance can be deferred after the expiration.

Reinvestment is made with profits, which is exempt from 2-3 years' income tax.

Taxes that are used for research and training costs during the investment period can be refunded.

Except coffee, all export products and services are exempted from all export duties and taxes on export goods.

In addition, Ethiopia has joined the Multilateral Investment Guarantee Agency (MIGA) and the international investment dispute resolution Convention (ICSID), which are affiliated with the world bank, and has committed to guarantee the political and non-commercial risks related to currency pfer, acquisition and nationalization, war and social unrest, and breach of contract.

The state constitution protects private property from being expropriated and nationalized by the government and abide by bilateral investment agreements.

Foreign investors may remit their profits and dividends, repay principal and interest of external loans, payment of technology pfer agreements, foreign investors' selling, liquidation or pfer of shares or ownership to local investors in exchange for free and free remittance.

If China's enterprises can invest in Ethiopia with financial and technological advantages, take advantage of the abundant resources of Ethiopia and seize the opportunity to expand the leather industry. The advantages lie in: 1. Ethiopia has a population of 72 million, and the potential market is huge.

The high quality leather, especially the high quality leather products, can be sold locally to fill the vacancies in the high quality products of the Ethiopian leather industry and meet the market demand.

2, China is one of the major importers of leather.

Invest in Ethiopia to set up factories, use Ethiopian leather resources and cheap labor force to produce high quality leather and leather products, and carry them back to China to solve our demand for leather and leather products.

3, with the advantage of market access, the production of leather and leather products will be sold to other countries to earn more foreign exchange.

Since 2000, Ethiopia has been a beneficiary of preferential policies for Africa's growth and opportunity (AGOA) act. Most leather products exported to the United States are exempt from 2-38% tariffs.

As a member of the southeast African Common Market (COMESA), goods are free to enter 23 African countries, and the preferential treatment of "all goods except weapons" (EBA) can be used to enter the European market.

In summary, Ethiopia has abundant animal resources, preferential policies to encourage investment, favorable conditions for international market access and domestic market demand. Foreign investors coming to invest in leather industry can not only promote the development of Ethiopia but also bring considerable economic income to investors. The prospect is very optimistic.

Morocco leather industry: medium-sized enterprises occupy the main force. Morocco is located in the northwest corner of Africa, with beautiful scenery and picturesque scenery. It enjoys the reputation of "North African garden".

The leather industry in Morocco is a pillar industry in the country. Most of the leather industry belongs to small enterprises.

At present, there are 435 enterprises in the leather industry in Morocco. Among them, there are 270 leather making factories, 165 shoe making factories and 15000 employees. The annual output value accounts for 82% of the small enterprises below 10 million Dee Rahm, 16.3% of the medium-sized enterprises between 10 million to 50 million Rahm, and only 50 million of the large enterprises that exceed the 50 million Rahm's.

Medium-sized enterprises are the main force of the leather industry in Morocco. Although they account for only 16.3% of the total number of the same enterprises in the country, their output value accounts for 58% of the total industry, 46% of their jobs, 51% of their wages, 65% of their exports, and 56% of their investment.

Morocco is a large animal husbandry country, with about 23000000 cattle / sheep herds and very abundant fur resources.

However, due to lack of capital and technology, a large number of fur can not be further processed.

Almost all enterprises engaged in fur processing are manual shops, and the quality of products is difficult to guarantee.

Experts believe that the investment in factories, the use of local leather resources to produce leather shoes, leather goods and other leather products, and then export, profits are very impressive.

According to the survey report, there are 435 enterprises engaged in leather and leather shoes processing in Morocco. The leather industry accounts for about 3% of the total export volume of the processing industry and shows a trend of gradual increase.

Morocco is a large animal husbandry country, with about 23000000 cattle and sheep herds, and very rich fur resources.

However, due to lack of capital and technology, a large number of fur can not be further processed.

Almost all enterprises engaged in fur processing are manual shops, and the quality of products is difficult to guarantee.

Experts believe that investing in factories and making use of local fur resources to produce leather shoes, leather goods and other leather products and then exporting to Europe should be profitable.

The African leather industry's status in the world can not be ignored: from the perspective of future development and cooperation, the status of African leather industry in the world leather industry must not be ignored.

Opening up the leather industry, reducing or even completely eliminating any form of protectionist policy may bring great opportunities to international trade.

Under the coordination of its Cotance, the European Federation of tanning manufacturers' associations, Europe is working hard to strengthen its trade with the region and promote the participation of the entire industry, including machinery manufacturers, tanning chemicals producers, and leather products producers.

In addition, Europe may also be an ideal partner to promote the development of tanneries in the region. This has its reasons for producing machinery and equipment, as well as chemical and proprietary technology factors.