Ethiopian Leather

Ethiopia is home to the largest population of livestock in Africa, with at least 40 million people owning livestock. Sheep and goat skins represent the bulk of Ethiopian leather production, producing an estimated 5 million skins annually. This sector is important in reducing poverty, as a large percentage of the population is directly affected by the leather industry.

Ethiopian product names that have for many years reflected distinctive high-end leather products are Bati Genuine, which refers to thin goat suede, Bati-type and Selallie Genuine, which refers to a special type of hair sheep skins.

There is also recognition in the wholesale market of the superiority of Cabretta leather for making gloves, not only for sport but in fashion as well, though many consumers are unaware of the Ethiopian origins. Ethiopian Cabretta leather is distinctive for being soft and yet strong at smaller thicknesses than other leathers making it the best type of leather for golfing gloves, with some retail prices double that of non-Cabretta gloves.

Bati goat skin is known to produce the softest, finest suede. Ethiopian herders are receiving about $10 for the skins that will produce a Bati coat. After tanning and processing to ‘wet blue’ or better levels for export, the exporter collects about $40-50 for the leather that will be manufactured into a coat outside Ethiopia. An importing wholesaler/ manufacturer will then make the coat with the final retail price being at least $400.

Herders and family sheep owners are receiving around $2 for the skins that will be used to produce one Cabretta golf glove that is both strong and thin, and better than other skins. The exporting sector is obtaining $5 for the leather that will be manufactured into the finished glove. Outside of Ethiopia, the glove retails for $25.

Cabretta, Bati, and Selallie skins are all internationally recognised for their strength and other qualities, resulting in premium prices being paid for these types of leather. Also, some of the fine leather goods coming from Italy are made from Ethiopian Bati, as wholesalers and manufacturers know it is one of the world’s best and are prepared to pay premium prices for it. This kind of reputation is important when devising an IP strategy, as reputations have intangible value and can result in greater export income.

Also, twelve Ethiopian leather companies recently developed a brand of luxury leather goods, Taytu. This brand is based on Ethiopia’s image as being authentic, and possessing the ‘essence of Africa’. The brand is distinctive, capitalising on Ethiopia’s geographical location and culture, both of which have strong intangible values. This luxury designer label had a successful launch; the entire collection sold out at the Paris fashion accessories collections in autumn 2006. Fashion experts note that consumers are beginning to tire of big brands; they are looking for unique labels, such as Taytu.

Supporting these differing elements with a package of IP-based business strategies would enhance existing reputations and communicate new ones, in order to produce more export income and secure that income for all stakeholders in Ethiopia. Given the recognition by wholesale buyers of Ethiopia’s fine leather and the intangible values tied to it, experts believe Ethiopian leather producers could increase their export income by three to five times. The 2007 export income was just over $90m, growing most by expansion of volume and some increased processing. Additional processing may create ‘value-added’, but only if the processing is profitable. ‘Value-captured’ through IP-based strategies can produce better net returns, an outcome that can be determined from a feasibility study with consideration of costs and benefits.

The quality and preservation of the hide are affected by dipping for disease prevention and quality control during slaughter and post slaughter transport to tanneries. In order to ensure high quality leather from Ethiopia, a scheme that provides incentives to herders and collectors to give more attention to the quality of the skins should be incorporated into an IP-based business strategy.

Value chain analysis will be available here shortly.

“A Blueprint for the African Leather Industry: A development, investment and trade guide for the leather industry in Africa”
United Nations Industrial Development Organization and the Common Fund for Commodities, Vienna, 2003

The Ethiopian Leather and Footwear Sector
http://www.bds-ethiopia.net/leather/index.html

“An Investment Guide to Ethiopia”
United Nations, Geneva, 2004

“A Leather Bridge With Africa.”
Italian Trade Commission Press Release, Rome, 2007

“Asian Foreign Direct Investment in Africa: Towards a New Era of Cooperation among Developing Countries”
United Nations Development Programme, Geneva and New York, 2007

“Why Don’t African Manufacturing Enterprises Export More? The Role of Trade Policy, Infrastructure Quality and Enterprise Characteristics.”
George Clarke, World Bank Development Research Group, 2004

“Environment and International Trade”
World Trade Organization, Geneva, 2004

“Ethiopia Agribusiness and Trade Expansion Activity”
USAID Monthly Update, Addis Ababa, Ethiopia, 2007

“Ethiopia: An Investment Guide”
Embassy of Ethiopia, 2005

“Ethiopian Exports to United States Nearly Double in Two Years”
Ethiopia AGOA & USAID Press Release, Addis Ababa, 2008

“Ethiopians Learning to Fight Ectoparasites”
Fintrac Press Release, Addis Ababa, 2008

“Global Hides and Skins Markets: A Review and Short-Term Outlook”
Food and Agricultural Organization of the United Nations, Geneva, 2007

International Merchandise Trade by Product
United Nations Comtrade Database, 2005

“International Trade Center Annual Report 2006”
UNCTAD, WTO, Geneva, 2006

“A Handbook for Value Chain Research”
Kaplinsky, R. and Morris, M., International Development Research Centre, Ottawa, 2007

“The Potentials of Electronic Commerce: Ethiopia in the Knowledge Age”
Teshome Kebede, Presented at the Conference on Information and Communication Technology and Development, Addis Ababa, 2001

“Uganda Biotrade Programme: Opportunities and Strategies for Wildlife Trade Sector in Uganda”
Moyini, Y. and Masiga, M., United Nations Conference on Trade and Development and the Uganda Export Promotion Board, Geneva and Kampala, 2005

“New Business Generated From Existing VEGA Programs”
USAID-VEGA Newsletter, Addis Ababa, 2006

“Value Chain Analysis for Policy-Makers and Practitioners”
Hubert Schmitz, International Labour Organization, Geneva, 2005

“Standards Governing the Export of North American Cattle Hides”
United States Hides, Skins, and Leather Association, Washington DC, 2005

“Success Story - Hides, Skins, and Leather: Improved Quality Spurs Growth Along the Supply Chain”
USAID Agribusiness and Trade Expansion Activity, Addis Ababa, 2007

“Trade Information Brief: Leather”
Australian Government AusAID, Canberra

“United Nations Conference on Trade and Development: An Investment Guide to Ethiopia”
The United Nations and The International Chamber of Commerce, New York and Geneva, 2004

Jay Kauffman, Fintrac

John Moriarty, Pittards

John Morton, Natural Resource Institute

Paul Pearson, International Council of Tanners