Tanzania is considered as a hotspot for leather investment owing to its large annual production of hides and skin, the political stability it enjoys as well as the availability of laws supporting the leather sector.
Two Italian companies have seized an opportunity and invested in Tanzania’s leather sector; which has not been widely explored despite the favorable conditions surrounding the business.
Toscana Machine Calzature (TMC) and ItalProgetti have entered into a deal with Prisons Department and the Public Service Social Security Fund to establish two leather factories in Moshi region in Kilimanjaro.
The companies are reported to invest USD 24.3 Mn in the construction of two leather factories. One of the companies will specialize in shoe making while the other will be a tannery. The companies will be seating on a 25 acre land, a location within Karanga Prison.
Reports indicate that the leather factories that will be managed jointly with Karanga Leather Industries Company Ltd in Karanga Prison are set to be completed in 16 months.
Daniele Ferradini, TMC’s sales manager disclosed that the Italian companies will cater for the costs incurred in the construction process as well as provide the required technology for production of quality leather products. The plant has been estimated to produce 1.2 Mn pairs of shoes per year.
Around 1980s Tanzanian government invested billions to grow the leather sector. Returns from the investment was not attractive prompting the privatization of state-owned tannery industries. The privatisation did not yield much results as the production condition further declined.
Low investments in value added leather industry have been denying the nation foreign currency incomes. This is despite the fact that Tanzania is second in Africa, after Ethiopia with the largest numbers of livestock. While it boosts large production of hides and skins, the country’s leather industry has not been yielding much. The market been largely controlled by SMEs who operate at limited capacity with regard to collection and processing of raw hides.
In a bid to revive the leather industry in Tanzania, Tanzania earlier tapped into Egypt’s technology. While announcing the move to adopt the latter’s technology, The Minister for Industry and Trade Charles Mwijage said “We are looking to revive the defunct leather industries and establish new ones to process and utilise the millions of skins produced in Tanzania every year.”
Freddy Kabala, general supervisor of the industrial development plan at the Leather Association of Tanzania reached out to some Indian potential investors in a move to solve the same.
Attempts to revive leather factories in the Magufuli-led country is currently ongoing, reports indicate.
Featured Image Courtesy: Strapa.com
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