Various investors are considering setting up leather factories after Rwanda pledged to establish a tannery park in Bugesera Special Economic Zone. ALSO READ: How varsity students saved part of stipend to start shoe-making business The country’s progress in streamlining the leather value chain was unveiled during the Africa Leather Value Chain Annual Forum 2024, running from December 10 to 12, in Kigali. The 17th Annual Africa Leather Value Chain Forum 2024 is focusing on enhancing the African leather value chain. The establishment of a tannery park in Rwanda is timely, as leather product makers currently import finished hides and skins at high costs. The proposed investment for an integrated leather processing plant, complete with effluent treatment facilities, is estimated to require an initial outlay of $15.1 million. ALSO READ: New factory seeks to reduce leather imports Jean d’Amour Kamayirese, a representative of Kigali Leather Cluster, which includes hides and skins dealers as well as leather product manufacturers, said the anticipated tannery park is attracting investors in leather product manufacturing. He cited one member of the cluster who is setting up a shoe factory in Kigali Special Economic Zone. The factory, aimed at reducing the country’s footwear import bill, could produce 900,000 pairs of shoes per month. One year ago, the government helped us form a cluster that brings together hides and skins dealers, abattoir owners, and leather product makers. Some of our members are interested in setting up large leather factories because they expect to source finished hides and skins locally, following the government’s pledge to establish a tannery park, he said. He said a tannery park is needed given that there are currently more than 100 tonnes of hides and skins in stores that are rotting away due to lack of market in the EAC. ALSO READ: Rwandan hides, skins traders decry challenges in EAC market Alexis Kabayiza, the Chief Technical Advisor (CTA) at the Ministry of Trade and Industry, said that a feasibility study is being conducted for the tannery park since interested investors need such facilities, including effluent treatment plants, to get locally made and affordable raw materials. “We have identified the zone for the tannery park, and we are still conducting the feasibility study, looking at the required capital and working on the designs. The feasibility study could be completed within three months. This study will also guide investors interested in this sector, as they first need details before setting up factories to produce shoes, belts, and other leather products,” he said. Nicholas Mudungwe, the Executive Director of the Africa Leather and Leather Products Institute, stressed the need for more tannery parks and their effluent treatment plants in Africa to promote locally made leather products. “We are addressing the challenges facing the leather industry. The first is sustainability. We need a green industry that does not harm the environment. Centralized effluent plants can also reduce production costs in factories. We are also focused on financial access. Development banks need to get involved. we are also looking at product designs,” he said. Supporting SMEs Mudungwe added that with the development of the leather industry, SMEs could tap into the African Continental Free Trade Area (AfCFTA). ALSO READ: Private sector urged to expand market under AfCFTA trading To support SMEs in the leather value chain, he suggested that governments’ procurement processes should prioritize locally made leather products. “Governments are the biggest consumers in any country. We have departments such as the military, police, schools, and others that require leather shoes,” he said, also urging SMEs to collaborate in order to meet both local and international demand for leather products. “For instance, one SME cannot meet government orders. They should aggregate to fulfill such orders. Standards boards should also help ensure that manufactured products meet the minimum standards required for the market,” he noted. Marie-Jeanne Umuhorakeye, the officer in charge of technology transfer at Kigali Leather Cluster, said that the development of the leather value chain is set to create jobs for more youth, women, and fresh graduates. “Meat production in Rwanda is increasing. We have skins from cows, goats, sheep, and others that should be locally processed, which will attract investors to establish leather factories. We need a tannery park and technology transfer to produce quality products,” she said. ALSO READ: A look at meat, Rwanda’s emerging export Bede Bedetse, an investor who wants to establish a leather factory in Kigali Special Economic Zone, said: “Africa should not export raw hides and skins outside the continent. They should be locally processed, through tannery parks, to develop our leather sector by supplying factories.” Edward Malunga, the president of the Leather Industry Association of Malawi, noted that raising the standards of leather products could help SMEs compete in the African Continental Free Trade Area. “Government institutions and financial institutions should help SMEs access financing and working capital to manufacture in volumes sufficient for the continental market,” he noted.
