Ethiopian authorities are considering “appropriate measures” to be taken against a locally-based Chinese leather factory that tried to export illegally two containers loaded with about 100,000 pieces of semi-processed leather, according to press reports here.
Friendship Tannery and Shoe Factory, located at Mojo town, about 62km east of the Ethiopian capital, Addis Ababa, reportedly intended to ship the cargo under the guise of fully processed leather to China.
The new factory is among the dominant players in Ethiopia’s leather and shoe industry.
Expressing dismay at the factory’s illegal attempt, Tadesse Haile, Minister of State in the Ministry of Industry, said: “Trying to export what is not worth exporting is really sad. We did not know such things are happening. We are very serious on the matter and legal sanctions will be imposed.”
But, according to ‘The Reporter’, very few out of about 40 leather processing factories in the country were exporting genuine and fully processed leather.
Friendship Tannery generates some US$10 million a year from production and export of different types of finished leather.
Despite the encouragement the government gives the leather industry to add value to leather products, reports indicate that the industry has not succeeded in generating increased revenue.
In addition, The Reporter said local factories were time and again accusing foreign counterparts of benefiting from loopholes in the regulations governing the leather industry.
For many years, Ethiopia exported huge quantities of raw and semi-processed hides until 2002 when the government restricted exports of low value added hides and semi-processed leather, expanding into new export markets and encouraging higher-value products.
One of the measures used to restrict exports of low value added hides is an export tax of 150 percent on the hides.
“These measures had a notable impact on the composition of the leather industry’s exports, helping to shift the leather industry to finished products,” said the 2013 Economic Report on Africa, co-authored by the UN Economic Commission for Africa (ECA) and the African Union Commission (AUC).
The report noted that the measures provided the basis for engaging international lead firms to assist local tanning and manufacturing firms to upgrade their production activities.
Coffee and leather industries are two major sectors spearheading Ethiopia’s robust economic growth, according to the newly released report.
Around 10,000 Ethiopians work in the leather sector, which is characterised by increasing domestic competition.
PANA reports that the export market used to be dominated by Europe, but in recent years it started shifting to China and India.