Italy’s Toscana Machine Calzature (TMC) and ItalProgetti are set to establish two leather factories in Tanzania. The agreement, which involves an investment of $24 million, will tap into the large quantity of raw hides and skin the Eastern African nation produces every year.
The plant which is expected to produce 1.2 million pairs of shoes per year, will be constructed on 25 acres of land at the industrial area within Karanga Prison and is set for completion in 16 months. One of the factories is for shoe-making, while the other is for tanneries.
The deal also involves Dar’s Prisons Department and the Public Service Social Security Fund, and the factories will be managed jointly with Karanga Leather Industries Company Limited in Karanga Prison.
“Both companies will provide finances and technology for production of quality leather products for export to Italy and other European countries,” TMC Sales Manager, Daniele Ferradini said.
Tanzania has the second largest herd of livestock in the Eastern African region (after Ethiopia). According to data from the Ministry of Agriculture, Fisheries and Livestock Development, the country has 23 million heads of cattle, 16 million goats, 7 million sheep and 2 million pigs.
From this wealth of livestock, Dar produces 3.9 million bovine hides, 2.5 million goatskins and 2.3 million sheepskins. However, the country has been importing shoes and leather products while making little use of its livestock products.
Ministry of Industry and Trade reports show that Tanzania imports between 31,000 and 42,000 pairs of leather shoes from China and other Southeast Asian states, but less than three percent of shoes are made from pure leather.
This is largely attributed to low investment in value addition within the leather industry, and this has undermined production. As a result, thousands of tonnes of skins and hides go to waste due to poor handling and low quality.
Tanzania’s leather industry has a total installed capacity of 74.2 million square feet but export earnings from the sector have increased slowly in recent years at an average of 22 percent.
Eight small and medium-size leather factories are currently operating below capacity with less than 50 percent capacity in collections and processing of raw skins and hides.
The industry is also underperforming with reports suggesting that most of Dar’s hides and skins are either sold or smuggled to Kenya where leather processing factories and tanneries are operating.
Promoting Tanzania’s industrial revolution
President John Magufuli has invited investors, largely from Egypt to venture into livestock-based industries, mostly beef and leather products, banking on Egyptian technology in leather and livestock products.
Also, the Public Service Social Security Fund and the National Social Security Fund are reviving leather factories in Morogoro Region with the Prisons Department.
As spelt out in the five-year Leather Sector Development Strategy (2016 – 2020) the government of Tanzania had set a target for speeding industrial revolution and which will make each of Tanzania’s 26 regions attract manufacturing industries and agro-processing factories.