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COMMITTEE ON
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INTERGOVERNMENTAL GROUP
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SUB-GROUP ON HIDES AND SKINS |
Sixth Session |
Cape Town, South Africa, 9-11 November 1998 |
DEVELOPMENT OF THE HIDES, SKINS AND LEATHER SECTOR IN AFRICA |
1. The Sub-Group on Hides and Skins has, on a number of occasions, expressed concern at the problems facing the hides and skins sector in Africa. At its Third Session, in 1992, it requested an investigation of the marketing of African hides and skins with emphasis on the problems and constraints affecting the African hides and skins and leather field. At its most recent Fifth Session held in Bologna (Italy) in May 1996 the Sub-Group requested FAO to facilitate activities aimed at improving the hides and skins sector in developing countries and it requested the FAO Secretariat to provide support for this work. With the Sixth Session taking place in Africa, it is appropriate to focus additional attention there.
2. This document reviews the state of the hides, skins and leather sector in selected African countries. It presents background information to assist in the consideration of action which might be needed to promote the development of the sector in order to maximise the contribution it can make to the economies of the countries concerned.
3. The document deals only with traditional bovine, sheep and goat material. Ostrich, reptile, fish, and various game skins are not dealt with although these materials have considerable potential for further development in some African countries.
4. The total number of domestic livestock (bovine, sheep and goat) in Africa is around 523 million or 16.7 percent of the world total (see Table 1).
| Bovine | Sheep | Goat | Total | |
| Africa |
180.7
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177.7
|
164.8
|
523.2
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| World |
1 434.5
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1 104.6
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594.7
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3 133.8
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| African share (%) |
12.6
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16.1
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27.7
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16.7
|
5. However Africa accounts for only 10.7 percent of the number of hides and skins produced in the world (see Table 2). If one takes into consideration the small sizes and relatively low quality of the skins then the African contribution to world supplies is even smaller.
| Bovine | Sheep | Goat | Total | |
| Africa |
17.8
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50.3
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44.9
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113
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| World |
279.4
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511.6
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267.9
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1 059
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| African share (%) |
6.4
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9.8
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16.8
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10.7
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6. While the total value of African exports of hides, skins, leather and leather products increased by about 115 percent during the period 1978 to 1995, these exports amount to less than one percent of the total international trade of this commodity group.
7. The reasons for the relatively low production in African countries include cultural factors, infrastructure and pricing of the raw material.
8. The cultural patterns and lifestyle of African traditional livestock producers, although rapidly changing, are often not geared to commercial livestock rearing and often provide a poor base for industrial production of meat and hides and skins. The pastoralists who keep large stocks of cattle and small ruminants typically keep animals in part as a show of wealth and for traditional purposes such as "life insurance", bride price and for slaughter at festivities. Regular meat consumption in Sub-Saharan Africa is very low, being estimated at about 10 kg per caput per annum in Ethiopia and Uganda and about 13 kg in Kenya. This is only about one tenth of the consumption of European and North American countries.
9. Poor infrastructure, including the lack of good roads, inadequate facilities for dipping and veterinary disease controls, lack of village level slaughter slabs and drying sheds with water and hygienic conditions has a major effect on the quality of the African raw hides. Putrefaction is a particularly serious problem. Hides and skins that have started to putrefy are not suitable even for poor quality leather. In Uganda, for example, the common methods of preserving skins are ground drying and wire and pole drying, which result in intermittent drying and re-wetting, and consequently in ineffective preservation. The rate of rejection of both sheep and goatskins is high. In some areas exporters now purchase green hides for wet salting or direct processing in order to reduce wastage.
10. In many cases, prices paid for skins and hides do not reflect the grade of material. In some countries, prices are set unpredictably, with high prices paid for all grades when supplies are short, but with lower grades finding no market at all in other years. Producers do not have a consistent incentive to improve the quality of their output. As result the quality and quantity produced, and prices paid for it, remain low. It is likely that because of traditional eating habits, the slaughter rates in African countries will not increase considerably. Adherence to appropriate grading and pricing structures would, however, provide incentives for greater attention to waste reduction and quality improvement. This would lead to primary producers receiving higher prices and to increased exports of African hides and skins, leather and leather products.
11. Although all African countries had, prior to the colonial era, a leather craft industry producing items needed by the traditional society such as water bottles, garments, shields, leather ropes and decorative items, this handicraft industry has not developed further. Today, it produces mainly poor quality "airport-art" for the tourist trade, while the modern mechanized leather manufacturing has been slow to develop. Some companies, particularly Bata, established shoe factories in the early fifties for local consumption and had a number of well functioning factories operating in some African countries. A number of these factories are still operating although some have been closed due to economic problems. Others, for example, in Egypt, Tanzania, Sudan, were nationalized, and subsequently were often not well maintained.
12. Producing footwear and leather products from imported components is feasible for some countries where components can be imported duty free. However, this type of operation faces tough competition from countries in the Far East and elsewhere.
13. The footwear and leather goods industries are well suited to small and medium scale industrial operations and have very labour-intensive manufacturing processes. Considerable potential for further development exists, based on a supply of raw materials and favourable labour costs.
14. To boost industrial development in this sector, African countries need to attract foreign investment and to stimulate cooperation with most countries with more highly developed industries. Foreign investment is more likely to be attracted if the industrial skill levels are improved and if a stable political and industrial climate is offered to potential investors.
15. The success in training workers, supervisors, technologists, designers and entrepreneurs by Tanning and Production Centre for Shoes Industry (TPCSI) in Kenya is an encouraging example, which could be repeated in other African countries.
16. African countries face particular difficulties when attempting to enter world markets. They have little reliable statistical data on finished leather and leather products, and find it difficult to collect, evaluate and disseminate market information. Suitable product ranges must be developed to meet the requirements regarding fashion, colours and textures in the different types of materials demanded by consumers.
17. Importers generally require good quality, well preserved, and correctly graded raw hides and skins. In recent years exports of raw hides and skins from Africa have decreased, due in part to restrictive trade policies adopted by some countries which have reduced the export availability. While newly established domestic tanning industries may need support to become established, export restrictions have often resulted in declines in the quality of domestic raw stock due to the low prices paid by the local tanners.
18. Semi-processed leathers, such as pickled skins and wet blue hides, can normally be sold relatively easily. However, as material is processed to higher stages, starting from crust and "ready to finish" materials, markets become more restricted and more complex. Crust leathers have to be "custom tanned" in order to fit the needs of the customer, requiring close cooperation between supplier and customer. In particular, customers must know that the quality of the raw material, including the physical properties and grain, the tannage including the softness and feel of the product, exactly matches their requirements.
19. Tanneries marketing finished leather for the footwear and other leather product industries face a much more demanding market. Factors such as delivery time, quality and the ability to meet changing fashions become more important. International buyers, influenced by their customers requirements, require links with tanners and marketing agents who must be able to maintain specified delivery schedules and supply materials which match agreed specifications.
20. Only in a few cases have some factories managed to start exporting leather products. Ethiopia is one of the few sub-Saharan countries where production of leather garments and other goods has developed to a reasonable standard and some Ethiopian factories have been able to export to industrialized countries.
21. The African leather and leather products industry has considerable development potential, which is based on large livestock populations, and indigenous, renewable raw material sources in a number of countries. The inherent quality of some of the hides and skins is good and, in a few cases, excellent. Its development would directly benefit the local primary producers including herdsmen and farmers, and would create employment opportunities and contribute towards foreign exchange savings by reducing imported leather products.
22. However, there are major impediments to the development of this industry. Hides are often damaged as a result of inappropriate animal husbandry practices. Facilities, equipment and skills required for slaughtering are, in many countries, inadequate. The structure of prices paid for raw material often does not provide producers with incentives to produce good quality material.
23. There are different ways by which the problems facing the African hides, skins and leather sector may be addressed. The traditional approach to hides and skins improvement in Africa has involved direct investment in infrastructure, training, etc. by governments and international organizations. However, it is becoming increasingly difficult to mobilize the funding required for such projects, while the privatization of industry which has taken place in many countries often makes this approach inappropriate.
24. It is expected that privatized industry will be better able to contribute to the development of the sector in the future. In Ethiopia, for example, two of the state owned tanneries have now been privatized. It is expected that, once initial adjustment problems have been overcome, the restructured industry will be able to produce a higher quality and will expand leather processing and manufacturing.
25. Many countries are seriously examining the policy framework in which the sector operates. Incentives and disincentives which result from domestic economic and trade policies, as well as from commercial pricing structures, can be all-important. On the latter point, a proposal for a project on improvement of pricing and grading systems, to be financed by the Common Fund for Commodities, is to be considered by the Sub-Group at this session (document CCP: ME/HS 98/8). Policies and structures that encourage and facilitate exports may also have a significant bearing on the development of the sector. Some countries have chosen to restrict exports of their raw material in order to encourage development of their processing industry, although such policies may have a negative effect on hide and skin production. This issue also has been placed on the agenda for the session (see document CCP: ME/HS 98/4). The promotion of trade fairs and the production of trade directories facilitate commercial contact between potential exporters and importers, and may therefore make an important contribution to the development of the sector.
26. Self-help by the industry itself is becoming increasingly significant. Efforts by UNIDO to foster the development of national and regional hides, skins and leather associations have resulted in the formation, in eastern and southern Africa, of bodies through which the industry can take an active role in its own future, both by influencing government policy and through direct participation in development activities.
27. Cooperation between governments and industry, and where appropriate, between countries of the region, could be an important element in promoting expansion in African trade. Cooperative efforts might be directed towards sharing information and skills with countries which possess advanced technology, and in promoting African products in importing countries.