Leather producers and traders will start earning premium prices from high value global markets, thanks to a Government value addition initiative.
Industrialisation principal secretary Betty Maina yesterday confirmed that the government is seeking lucrative international markets like the US, China and Europe that will buy all the value added products.
This is part of the plan to enhance value addition of local products to make them competitive as well as to attract premium prices at the international markets.
“The government is a working on various programmes to promote value addition of local products as is stipulated under the manufacturing component of the Big Four agenda. Our mission will be pegged on tapping new markets that can suck up all our value added products,” said Maina while launching the Leather Apex Society of Kenya (LASK) in Nairobi.
In 2014 the government banned export of raw hides and skins and at the same time introduced export duty of 20 per cent but up scaled it to 80 per cent to discourage export of raw hides and skins. But industry sources intimated to us that due to poor policing of border points, unscrupulous traders are still shipping out raw leather.
Recently, China and India banned imports of raw hides and skins leading to West Africa emerging as the new market of wet blue leather materials.
Kenya is a marginal player in the global market earning only Sh8.6 billion accounting to 0.14 per cent of the global exports of $120 billion (Sh12.3 trillion).
Every year, the country imports 42 million pairs of shoes out of which 26.7 million are of non-leather and 15 million are leather. Industry players predict that if value addition is fast tracked, current earnings would increase twelvefold representing more than Sh100 billion.
Currently, Sh3 billion is lost on sale of raw hides and skins due to poor quality while Sh14 billion is spent on importation of leather accessories.