Ethiopia could see $190 mln leather sales in '09

17 December, 2008

ADDIS ABABA (Reuters) - Ethiopia's leather sector expects export earnings to rise to $190 million in 2009 but a prolonged crisis in the global economy could cut that forecast by 5-10 percent, an industry official said on Wednesday.

"The sector exported leather and leather goods worth $103 million during the year that's just ending and expects to earn $190 million in 2009," Abdissa Adugna, secretary general of Ethiopian Leather Industries Association (ELIA), said.

"But given the current global financial crisis, we anticipate between 5 to 10 percent reduction of the targeted income in 2009."

Ethiopia has an estimated 41 million cattle, 25 million sheep and 23 million goats but poor husbandry and black market livestock sales to neighbouring countries have meant that the industry has remained underdeveloped.

The government has been on a programme to revive the sector and 45 private industries producing leather and leather goods have formed an association to develop the business.

The association has already received orders to supply Ethiopian-made shoes worth $10 million to European markets in 2009, he said.

ELIA has an aggregate capital of $10 billion and groups tanneries, footwear manufacturers and producers of goods such as suede garments, Adugna said.

The Horn of Africa country exports a lot of processed and semi-processed hides and skins but ELIA wants to end that, Abdissa said.

"Our factories have installed the latest machines. They can transform hides and skins such as the Ethiopian highland sheepskin into value-added finished products like hand gloves, bags and suede, which could fetch better income."

The global leather business was worth some $50 billion in 2008, Abdissa said, citing U.N. estimates. Africa accounts for only 1 percent of that trade although it has more than 10 percent of the world's cattle population, he said.

Ethiopia is Africa's biggest exporter of coffee but is trying to diversify earning streams by going into sectors such as horticulture.

Its total export earnings in 2007/08 (July-June) were $1.5 billion and coffee accounted for $525.2 million of that.

Ethiopia's government has forecast economic growth of 10.8 percent in 2008. But despite its robust performance, the country of 81 million people is still one of the poorest in the world. - By Tsegaye Tadesse