Scores of factories to set up industrial park
Having received positive nod from major global brands in the footwear industry, local shoemakers are propping up business relationships with renowned international brands that are eyeing to source bulks of shipments from Ethiopia.
Wondu Legesse, director general of the Leather Industry Development Institute (TIDI) told The Reporter that in an effort to upscale the marketability of the country’s footwear products, the institute under the guidance of the Ministry of Industry has collaborated with Made by Ethiopia, a local firm formed by a group of leather and footwear manufacturers, to launch a massive marketing campaign to promote the industry in the global market.
According to Wondu, some 10 manufacturers have joined hands to supply footwear products mainly destined for the US. To that effect, Memoranda of Understanding (MoUs) were signed recently with US souring brands.
Coordinating the activities of Made by Ethiopia, Bethlehem Tilahun, founder and owner of SoleRebels, who also lunched a coffee shop business recently, is pioneering the effort to leverage and convince global buyers that Ethiopia is the best alternative sourcing market when compared to Bangladesh and Vietnam—markets many international brands rely on to source products.
Bethlehem told The Reporter that Made by Ethiopia is currently ushering in the Ethiopia footwear industry into the global market by focusing on promotional activities to help the country become one of the major sourcing nations in the footwear and leather market. She also said that so far, Aldo, Wolverine, Caleres, Under Armor, Li&Fung, Sears, RLF, RG Barry, Zara, and Global Brands Group have shown interest to source from Ethiopia.
Most of these brands are represented by the American Apparel and Footwear Association (AAFA) whereas some 1,000 world class brands are also under the same association, Bethlehem said. According to the information posted on its web, AAFA encompasses companies which have managed to create some four million jobs within the US and contribute USD 361 billion in annual retail sales.
Following the first visits to Ethiopia by ten major brands a few weeks ago, Bethlehem and her colleagues have sent samples of the products they plan to manufacture. Some orders have been already placed, Bethlehem said, and that the Ethiopian team is set to visit the Aldo Group headquarters in Montreal, Canada, in the first week of February.
Recent CNN report took note of the shoemaking industry in Ethiopia and how it is shaping up. The momentum is more noticed when US end users have shown more interest to wear shoes made in Ethiopia. According to the CNN report, 87 percent of the footwear products imported to the US are sourced from China.
To sustain the emerging demand for Ethiopian footwear, apparel and leather goods, Bethlehem and her colleagues are in a hurry to finalize an industrial park project around Addis Ababa area. Already a dozen of local manufacturers have shown interest to lease shades in the park. Back in June, the project was launched to conduct to a feasibility study and currently, the team is trying to finalize a proposal in two months’ time. When finalized, the proposal will indicate how much capacity each factory has and how much funding is to be channeled. The source of financing among others is targeted to be the World Bank’s machinery leasing scheme, Bethlehem said.
Both Wondu and Bethlehem are confident that the Ethiopian footwear industry is in the making. Currently, the footwear export performance is closing in the gap with the finished leather export. Yet, the export figures in the first half of the current fiscal year were way below the targets. Accordingly, finished leather has fetched USD 31.7 million, footwear USD 19.2 million, gloves 2.4 million and leather apparels and accessories have earned USD 1.6 million. The target for the half year was set at USD 113 million but it failed short at 54.8 million, indicating a performance of 47 percent of the target.
Under such poor outcomes, Wondu sounds unthreatened. He is buoyant that in two years’ time the hurdles in the leather and footwear subsector would be resolved. Currently, there are projects that have the capacity of manufacturing some 20,000 to 30,000 pairs per year. Both local and global markets are jogging for huge quantities of supply. One of the neck breaking challenges, however, is the lack of capacity, Bethlehem emphasized. Local demand for footwear and leather products is estimated to be some 15 million pairs per year and of course the capacity falls half of that amount.