Made in Ethiopia Shoes a Hit in Addis

Pushed by an unprecedented boom in demand, dramatic changes are being seen in the leather shoe business in Ethiopia. Scores of excited entrants are coming in to explore and present new designs to fashion-conscious customers in a fast growing city.

Aster Tadesse, in her 40’s, was among sixty retailers of locally made leather shoes in Amede Gebeya, Merkato. She has been in the business for more than a decade.

She carries more than 500 pairs of shoes in her store which is visited by about 50 people a day ranging in age from 25 to 40.

“The designs and models are better now compared with what was around five or six years ago,” said Aster.

Yared Girma, 25, who usually buys locally made shoes from Piassa connects the rise with an improvement in models and styles in the past three years.

“It’s a completely new product that has taken over the market,” Yared said. “Everything is new: the styles, the materials, the brands.”

A few months ago, he bought a pair of locally made leather shoes for 1800 Br in a shop on Bole road.

“The price has also escalated with the rise in demand,” he explains.

Aster, however, says the price increase is reasonable because of corresponding increases in rent and labour costs. She employs four people at her shop.

“We used to pay no more than 20 Br per day three years ago,” she added. “We now pay an average of 50 Br for each employee per day.”

The history of the leather industry in Ethiopia started 88 years ago, when the then Asko Tannery, now known as Tikur Abay Shoe Factory, was established. The production of leather shoes in Ethiopia dates back to the late 1930s when Armenian merchants founded two shoe factories in Addis Ababa. These factories nurtured a number of shoemakers, who opened their own factories across the country.

Today, the neighborhood of Merkato, a huge marketplace in the city is swarms with shoemakers, wholesale shops dealing in leather, soles, shoe accessories, and shoe retail stores.

Woldeamanuel Kebede, a shoe salesman with three decades of experience in a shop in the center of Merkato, said the demand increased less for locally made women’s shoes as a result of poor design.

Most young women between 25 and 40 years of age prefer to buy shoes based on uniqueness, rather than durability, retailers told Fortune.

The price of locally made women’s leather shoes varies between 350 Br and 500 Br in the 10 shops that Fortune visited.

New design trends and rising discretionary spending are also among the factors which spur growth in the footwear market.

“Designers tend to copy rather inventing a new model,” Woldamanuel commented.

In a bid to boost the leather industry, which accounts for less than four percent of the country’s total exports, the government established the Leather Industry Development Institute (LIDI), with the main objective of developing the competitiveness of the sector in the global arena.

The institute supports the industry through research, training, consultancy services, quality control and laboratory testing.

Rutisa Itecha is one of the designers who was trained by LIDI. He has designed more than 45 new models for Kangaroo Shoe Factory since he joined the company two years ago.

The major constraint that deters Rutisa and other designers face in coming up with new designs is a shortage of new soles.

“We can produce much more if there is no shortage of raw material,” Rutisa commented. “Locally produced shoe soles are always the same. It is very hard to find fashionable soles from local producers.”

Besides these constraints, lack of educational and training facilities affect designers’ abilities to be creative, according to Rutisa.

Currently, there are only five universities that provide footwear engineering as part of their courses. Addis Abeba University, Arba Minch University, Bahir Dar University, Komobolcha University and Wollo University give the course as the part of their annual program.

“To overcome such problems, we are working to raise the number of institutions to 12 by 2020,” said Biruk Tilahun, public relations manager for LIDI.

The Ethiopia footwear industry has grown from two factories in 1991 to 21 today. The industry now employs 14,000 nationally, according to the Central Statistical Agency.

Established 27 years ago, the Kangaroo Shoe Factory is among the country’s leading footwear manufacturers. The company was founded by the renowned entrepreneur Yirga Haile with a capital of 370,000 Br.

Kangaroo opened with 20 employees. It now employs more than 320 people and generates annual revenue of 51 million Br.

“Over the past few years, the industry saw a lot of progress in terms of technology and skilled manpower,” said Yoseph Behabtu, manager of Kangaroo shoe factory.

Last year, the factory undertook an expansion project costing nine million Br, with the aim of increasing its production capacity from 77,000 pairs of shoes per day to 120,000.

It is not only Kangaroo which raised its capacity last year. Anbessa Shoe Factory is also executing an expansion project at a cost of half billion birr, in Akaki Industrial Zone. The project will boost the firm’s capacity threefold to 10,000 pairs of shoes a day.

Anbessa has been in the industry since 1935. In 2011, it became a private holding at a cost of over four million dollars.

Besides selling to the local market, Anbessa also exports shoes. In 2015, the company sold more than 27,000 pairs of shoes on the international market.

Ethiopia exported 33.7 million dollars worth of footwear products, mainly to the U.S., last year, one million Br lower than the preceding fiscal year.

Although the export of footwear started a decade ago, the value has been facing a decline over the past two years.

Ethiopia is home to the largest population of cattle in Africa and the 10th largest in the world. The total cattle population is estimated to be more than 56 million.

“Besides the decline in international commodity prices, the country has shown no development in raising the number of destinations,” said Biruk, explaining the export decline.

“In a bid to develop new markets, we are promoting the industry to the international market through expos,” he added.

Two months ago, Made in Ethiopia, Enterprise Partners and Footwear Distributors and US retailers organized a joint summit under the theme “Ethiopia: The source of premium duty-free footwear manufacturing,” with the aim of promoting the industry more in the US market.

About 80pc of the world’s leather production is utilized by the footwear industry. Ethiopian footwear manufacturers use a remarkable amount of leather for their product. However, some industry veterans claim the raw material lacks quality.

The recent drought in the country, as well as an increasing number of livestock skin diseases, has led to a deterioration in the quality of leather on the market, according to skin and hides traders Fortune spoke to.

However, it doesn’t seem to be affecting the popularity of locally made leather shoes in the urban markets. The export markets will have to make up much ground when international prices stabilize.






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