NAIROBI, Kenya Jan 7 – The government plans to grow the local leather sub sector by close to 50 percent in the next five years as it seeks to make the industry a major contributor to the economy.
The Ministry of Industrialization said on Thursday, it planned to establish a Leather Development Council to coordinate operations in the industry to ensure it becomes competitive in the global market.
Industrialisation Permanent Secretary John Lonyangapuo said the council would be well placed to formulate policies that will promote the production of hides and skins, poised to compete well with those from other markets.
Prof Lonyangapuo cited the lack of a solid policy framework as one of the reasons growth in the sector had been slow.
One aspect that the Council will be charged with; is promoting value addition chains of hides and skins products to increase income from the products.
“We expect earnings from this sector to swell significantly if we can increase the amount of value addition that goes to our hides and skins,” Prof Lonyangapuo said.
In 2008, Kenyan export earnings from semi processed leather and raw hides stood at Sh4 billion compared to Sh3.2 billion in 2005.
The sub sector has however been unable to fully exploit hides and skins as a locally renewable resource due to uncoordinated leather sector activities and poor leather development services.
Since 2004, the government with assistance from United Nations Industrial Organisation (UNIDO) has been putting in place measures that have put the sub sector on the path to recovery.
During that period, earnings from hide production went up from Sh2.8 billion in 2004 to Sh4 billion in 2009. Ninety percent of the hides are also being processed locally compared to 75 percent in 2004.
This growth pattern was however affected last year as the country underwent a period of prolonged drought. This had an adverse effect on the quality of skins being produced coupled with poor handling techniques, which also affected quality.
The PS added the ministry would also set up several mini tanneries, especially in the arid and semi arid areas, to avoid compromising the quality of the hides produced.
“The ministry through KIRDI has introduced the concept of mini tanneries. Since last year we have built three mini tanneries and many more are expected by 2012,” he said
He was speaking as he received a report from the National Economic and Social Council with recommendations for the leather sector.
The report calls for the setting up of Disease Free Zones across the country, developing standards for hides, skins, leather and leather products, development of Industrial Leather parks, credit sourcing geared towards affordable funding for MSME development.
The sub sector also plans to position itself for the export market to generate the much-needed foreign earnings as well as increase local consumption of leather products for the continued stabilisation and enhancement of growth in the industry.
China is the top importer of Kenyan hides accounting for 60 percent of exports; India 30 percent while 40 percent is shared between Thailand, Vietnam and Italy.