adminBusiness Correspondent
Players in the leather industry in the Comesa region have been urged to add value to their products as they were depriving themselves of the much needed revenue by exporting raw hides. Speaking in Bulawayo during the launch of the Zimbabwe Leather Value Chain Strategy last week, Comesa secretary general Mr Sindiso Ngwenya said member countries were failing to generate more revenue by exporting raw leather materials.
“The Comesa region is very important to Africa and the world in terms of the size of livestock herd and production of hides and skins.
However, Comesa’s contribution to global trade in these products is very weak and was estimated at 0,3 percent in 2012. This is mainly attributed to the concentration in production and trade of non-value added commodities, such as hides and skins.
“The global value chain stands at approximately $80 billion, which is approximately three fold the value of the meat and meat products value chain. Let us not forget that the leather value chain is a by-product of the meat industry,” said Mr Ngwenya.
“In the period 2001-2012, Comesa’s leather value chain experienced a positive performance, in particular with regard to the primary segments of the value chain, which all grew significantly. In particular, Comesa’s stock of goat skins increased by 28,6 percent, whereas at world level the same segment declined by 4,2 percent.
“In comparison, negative trends were recorded in the production of light bovine leather, which declined by 3,7 million square feet, and in the export of raw hides and skins and light bovine, with a loss of $67 million and $55 million respectively,” said Mr Ngwenya.
He said the overall market potential of Comesa leather could grow from an estimated value of raw material of $378 million to an estimated value of $875 million for fully finished leathers.
“This represents a value addition of roughly $500 million or about 150 percent of the value of raw materials.
“If all the raw hides and skins are transformed into finished goods like footwear, garments and other leather goods, the industry would balloon to $2,5 billion from the present value of $450 million,” said Mr Ngwenya.
He said the Comesa region’s market size for footwear was estimated at 365 million pairs of shoes per annum, based on the estimated footwear per capita of 0,85.
“Assuming all these pairs of shoes are produced in the Comesa region, approximately 365 000 shop level jobs would be created, which would trigger demand in the finished leather, soles, glues and other accessories consequently creating more indirect jobs,” said Mr Ngwenya.
He said Comesa would continue to promote the economic transformation and growth of the region’s economy through deeper and sustainable integration, which was anchored in building industrial competitiveness through the development of national and regional clusters.
Bongani Ndlovu
Online Reporter