Over the last years the government in Ethiopia , using the Leather Industry Development Insttute [LIDI], has taken a strong hand in enhancing productvity of its footwear factories through various capacity building programs including the development of a centralized training facility, labs for both its tanneries and factories, investment in infrastructure in order lay the foundaton for rapid industrial development through an export led strategy focused on the leather industry and the footwear sub-secton specifically. With the renewal of AGOA (African Growth and Opportunity Act) recently concluded with the USA, the EBA agreement (Everything But Arms) with the EU, and the LDC duty free regimes in Canada and Japan for Ethiopian goods, Ethiopia’s new plan aims to become a major export manufacturer to both the USA, Canada and Europe as Vietnam will be the only other naton with duty-free entry into these markets. Complementng this is Ethiopia’s large manpower pool that consists of a young and energetc populaton who are excited to engage in manufacturing related work. Rounding that out is the ready supply of leather emanatng from the fact that Ethiopia is home to the largest cattle and livestock herds on the African contnent.

Over the past three years FDI has led to major investments from factories in China, Taiwan and Turkey. In additon, the new two-way rail link between Addis and the port city of Djibout will be completed at the end of this month and the Railway Authority has already taken delivery of 315 locomotves. The naton’s GTP (Growth & Transformatonal Plan) is clearly focused on expanding current capacity from within the country while establishing a private-public arm that is customer- facing to facilitate customer acquisiton, product development, sampling and factory certficatons including ISO, C-TPAT, individual customer audits and incoming materials testng. In additon, the new venture will provide a central bonded warehouse for supply chain partners where those materials do not exist in the local market. It is noteworthy that kaizen (contnuous improvement) has been introduced in a number of factories and lean producton lines are now the next step in productvity enhancement. At the same tme the new customer-facing venture, Made by Ethiopia, will facilitate export processing, customer liaison and coordinaton of factory capacity plans. Several new factories are about to be phased in adding more than 250,000 pairs per month over the next 18 months to existng capacity.

The Made by Ethiopia team is headed by Bethlehem Tilahun Alemu, the country’s leading young entrepreneur with Italian technical expertse and Western partners for its customer-facing actvites. There will be far more to come from Ethiopia in the weeks ahead.

Mel Lewis of ShingTak Group

Originally published on October 16, 2015