16 Oct Ethiopia Sets an Aggressive Growth Plan for Footwear
Over the last years the government in Ethiopia , using the Leather Industry Development Institute [LIDI], has taken a strong hand in enhancing productivity of its footwear factories through various capacity building programs including the development of a centralized training facility, labs for both its tanneries and factories, investment in infrastructure in order lay the foundation for rapid industrial development through an export led strategy focused on the leather industry and the footwear sub-section specifically.
With the renewal of AGOA (African Growth and Opportunity Act) recently concluded with the USA, the EBA agreement (Everything But Arms) with the EU, and the LDC duty free regimes in Canada and Japan for Ethiopian goods, Ethiopia’s new plan aims to become a major export manufacturer to both the USA, Canada and Europe as Vietnam will be the only other nation with duty-free entry into these markets. Complementing this is Ethiopia’s large manpower pool that consists of a young and energetic population who are excited to engage in manufacturing related work. Rounding that out is the ready supply of leather emanating from the fact that Ethiopia is home to the largest cattle and livestock herds on the African continent.
Over the past three years FDI has led to major investments from factories in China, Taiwan and Turkey. In addition, the new two-way rail link between Addis and the port city of Djibouti will be completed at the end of this month and the Railway Authority has already taken delivery of 315 locomotives. The nation’s GTP (Growth & Transformational Plan) is clearly focused on expanding current capacity from within the country while establishing a private-public arm that is customer- facing to facilitate customer acquisition, product development, sampling and factory certifications including ISO, C-TPAT, individual customer audits and incoming materials testing. In addition, the new venture will provide a central bonded warehouse for supply chain partners where those materials do not exist in the local market.
It is noteworthy that kaizen (continuous improvement) has been introduced in a number of factories and lean production lines are now the next step in productivity enhancement. At the same time the new customer-facing venture, Made by Ethiopia, will facilitate export processing, customer liaison and coordination of factory capacity plans. Several new factories are about to be phased in adding more than 250,000 pairs per month over the next 18 months to existing capacity.
The Made by Ethiopia team is headed by Bethlehem Tilahun Alemu, the country’s leading young entrepreneur with Italian technical expertise and Western partners for its customer-facing activities. There will be far more to come from Ethiopia in the weeks ahead.