Though Chinese tanneries and manufacturers play a significant role in the Ethiopian leather industry, more production lines should be established to produce value-added goods locally, according to a high-level official at the Ministry of Industry of Ethiopia.

Ahmed Nuru, adviser to the State Minister, says Chinese companies are crucial to the development of the country's leather industry.

"One important element is that they are bringing in new technologies," he says.

He says although many Chinese factories have been established in Ethiopia, there are ample opportunities for more partnerships.

"Another advantage that Chinese manufacturers have created is that they have also taken our products to the Chinese market," he says.

Nuru says the leather industry in Ethiopia is one of the nation's pillar industries earmarked for economic development.

"This industry is based on Ethiopian resources. Ethiopia doesn't only have the largest livestock numbers in Africa, it's the largest in the world," he says. "So if we can properly utilize the resource and add value to it, the potential for the global market is huge."

He says giving resources value, rather than simply processing skins, is critical to sustaining the economy and its industrialization.

"The biggest change in this industry has taken place over the last three to four years," he says. "We first introduced a better management system in this sector along with a better use of technology.

"This industry goes back five decades in my country, but we only exported raw materials till about five years ago. We thought we were losing a lot of value by only exporting raw skins. So we started to bring in technologies to finish the process here. We also linked the leather industry to the footwear industry."

Chinese companies are also bringing their technologies to the country, although most companies are more likely to produce finished leather, Nuru says.

"But now they have started supplying processed leather to the footwear industry locally. One of the biggest companies now playing a significant role in footwear exports in Ethiopia is a Chinese company called Huajian," he says. "They brought the women's footwear industry to our country."

Chinese manufacturers, he says, are also taking the lead in footwear exports from Ethiopia. He says the finished products are very important for the industry because it generates foreign currency for the country to develop both the economy and the industry.

"Despite our huge potential, the scale of exportation is still small, especially of finished products," he adds.

Nuru says Ethiopia is still at an early stage in introducing technologies, particularly finished leather processing technology.

Building more manufacturing factories is also critical for Ethiopia and its economy because finished leather can be used in the glove and footwear industries.

"That is also a challenge for the government because we can't force companies not to export processed leather. What we can do is to lead them to foster a sense of manufacturing leather products locally."

In this process, more specialized companies also need to be encouraged to build up a complete production chain "because you can't produce everything in one company only", Nuru says.

"Another critical point we need to address is exports' delivery time. We have logistical challenges at the moment since Ethiopia is a landlocked country," he says. "It's not efficient now in terms of transportation and delivery. But we are working to tackle this problem to facilitate the development of this industry."

lilianxing@chinadaily.com.cn

(China Daily Africa Weekly 06/14/2013 page16)