Leather industry faces bleak future.
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Leather
Association of Tanzania (LAT), Executive Secretary, Mr Joram Wakari, said in
Dar es Salaam yesterday that leather exports have dropped to less than 5 per
cent forcing some players to close down their businesses.
“The
situation is worse as very little is being exported due to fall of demand from
the most importing countries including China and Pakistan thus leaving most
godowns full of packed semi processed leather products,” he said.
For
example, one leather factory in Shinyanga has closed down operations due to
falling demand for semi processed leather products. The situation has not
impacted only Tanzania, but also Kenya, Ethiopia and Brazil. He said most
business people in the leather industry were frustrated and had incurred heavy
losses since when the situation started to surface on the last quarter last
year. The governments will also lose substantial revenues from the leather
industry.
“The
country spends substantial amount of its scarce foreign exchange to import
around 60 million pairs of shoes annually,” he said, adding that the concerted
measures were needed to increase investment on the leather industry to absorb
unexpected shock.
Tanzania
currently uses only a fraction of the potential in leather industry while
spending substantial amount of its scarce foreign exchange to import footwear
and other leather materials from abroad. Other imports on leather products
being bags and handbags, wallets and belts that can be made locally using the
available raw hides and skin.
He
said local entrepreneurs are given opportunity to make 30 million pair of shoes
annually out of 60 imports which could have made big difference to the economy
and absorbed the shocks from the international markets.
Presently,
the local manufacturers can make less than one million footwear annually. He
said the sector offers huge potentials for local investors to develop the
present small scale leather factories as well as establishing the new ones
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