Juvenal
Gatorano, a leather maker in Nyamirambo, at his workshop. Small-scale
leather products producers like him are the majority in the sector. /
File
The woes faced by Rwanda’s leather tanning
industry could soon be history following new initiatives that seek to
address the challenges that have dogged the sector for years. Issues
like lack of enough raw materials, skills gap and low prices as well as
dependence on imported finished leather materials
have stifled the growth of the sector. The fact that a big percentage of hides and skins are exported to the region has starved local tanneries of raw materials.
Many dealers prefer to sell hides and skins to neighbouring countries, where they fetch better prices, according to stakeholders. However, a number of interventions were instituted, including levying high taxes on exported raw hides and skins and increasing prices paid to small dealers, which has raised optimism among local leather tanneries. Kigali Leather, located in Bugesera District, is the biggest leather tannery plant in the country.
According to Yuan Wang, the managing director of Kigali Leather, government intervention helped reduce exports of hides and skins. The tannery has also been able to start producing finished leather from wet blue leather, thanks to the support.
Skin collection centres in the offing
In a bid to improve quality along the value chain and also ease access, collection centres for hides and skins will be set up in all districts across the country to improve handling and quality. The move is also expected to help reduce the volatility and fluctuation of prices for dealers, according to Dr Jean-Claude Rukundo, the director of veterinary inspection at Rwanda Agriculture Board.
“The skin collection centres will be managed by a cooperative… slaughterhouse operators will also be trained on the recommended preservation methods along the value chain to ensure quality,” Rukundo told Business Times.
This will ease grading of skins at collection centres and promote better management of skins in the value chain.
Recently, officials from the Ministry of Trade and Industry, Rwanda Agriculture Board and Rwanda Standard Board and other key leather industry stakeholders met in Kigali to discuss technologies for leather manufacturing and the hides and skins value chain as part of efforts to improve handling and the sector’s production.
Capacity building
Dr George Nyombaire, the head of research and development coordination at National Industrial Research and Development Agency (NIRDA), says that there are about 20 small skin processing units mainly using artisanal methods.
NIRDA will conduct study tours in countries with developed leather
manufacturing, such as India, China and Ethiopia, to learn from their
experiences and acquire manufacturing skills, he adds, noting that the
agency is also promoting adoption of clean technologies among SMEs.
Kampeta Sayinzoga, the director general of NIRDA, says there is need for new measures that would help to increase leather production in Rwanda to supply local plants with quality raw materials sustainably.
Considering that the number of cattle is slowly increasing to nearly two million and goats are over 2.5 million, but we still produce under capacity it needs new measures to reverse the situation if the sector is to grow and become sustainable to attract more investors, according to Sayinzoga.
Challenges persist
If dealers continue to export most of the hides and skins to neighbouring countries, the sector will continue to be affected, according to Wang.
In fact, lack of enough raw materials (hides and skins) is one of the biggest challenges the sector faces. For instance, there was a big shortage of supplies of raw materials between June and August last year as many dealers prefer to export hides and skins to neighbouring countries, says Wang.
The problem only reduced following government intervention, he says. The prices paid by local leather tanneries was also increased and “is still going up.”
The factory buys a kilogramme of hides at over $1 (about Rwf862) and Wang says prices will be increased gradually to attract local suppliers.
“Kenya and Tanzania pay slightly higher prices for raw hides and skins that is why Rwandan dealers prefer to export them,” he says.
He adds that the two countries restrict export of hides and skins by imposing taxes on them.
He calls on the Rwandan government to also levy higher taxes to discourage the export of hides and skins to the region.
The low supply of hides and skins experienced last year affected the firm’s production capacity, which dropped from processing 10 tonnes of skins per day to about seven tonnes.
They produce more than 3,000 pieces of wet blue leather per week and about 1,500 pieces of finished leather, depending on the market.
Wang adds that the factory makes between four and five tonnes of finished leather per day and intends to invest another $2 million in the plant this year to increase production capacity to up to 20 tonnes daily.
The company also makes a number of leather products, including shoes, handbags and leather chairs, which are sold locally.
From January to November 2017, Rwanda generated $6.7 (about Rwf5.8 billion) revenue from export of hides and skins. The main destination of Rwanda hides and skins in November 2017 was Kenya at 90.64 per cent, while 9.36 per cent went to China.
Skills gap
Germaine Mukashyaka, the chairperson of Leather Value Chain Platform
in Rwanda, says lack of requisite skills in better ways of producing
quality leather products is the main challenge the sector faces, adding
that the market is narrow because there are few leather tanning
factories in the country to buy hides and skins.
“Government is setting up a leather industrial park in Bugesera District, which will provide investors in leather manufacturing an opportunity to expand, while also ensuring a ready market for hides and skin dealers,” she says.
Mukashyaka adds that the country needs more quality finished leather products from local factories to reduce on imports, especially from Ethiopia and the EAC.
“As they expand, these factories will provide locally-sourced hides and skins ready market, which will create confidence among sector stakeholders. However, we need to build the capacity of sector players to be competitive,” she notes.
Anncee Kuradusenge, the agro-processing and biotechnical research division manager at NIRDA, says most of players in leather processing are small with artisanal operations.
Therefore, they should join hands and form bigger leather companies to venture into leather making jointly, advises Kuradusenge.
Export oriented
Dr Jean-Claude Rukundo, the director of veterinary inspection at Rwanda Agriculture Board, said only 30 per cent of the hides and skins produced in Rwanda remain in country.
However, part of this is also exported to the region as wet blue leather. However, this could soon change following the establishment of more leather making plants in the country.
The development comes as part of efforts to boost leather production in the country. Rwanda is a big producer of animal products in the region, but still imports most of the finished leather needed by the footwear and other sectors.
The country has an estimated 1.4 million heads of cattle, over 2.5 million goats and 630,860 sheep as per 2016 statistics.
Dr Rukundo says that there are more five registered modern abattoirs, currently, while five more are in the process of being registered in Gicumbi, Ruhango, Muhanga and Nyarugenge districts. Another four abattoirs are still under construction in Rusizi, Ngoma, Kamonyi and Kayonza districts.
He says abattoirs that do not meet standards are being closed “because they affect skin production and the whole value chain.
Dealers speak out
John Mfuranzima, the manager of Gatsibo Community Leather Processing Centre, told Business Times that they are currently buying finished leather from Kigali Leather.
“Though the quality of finished local leather products is good, prices are high compared to imported leather. Another reason factor we buy leather from the plant is that studies have revealed that cattle that were kept in cowsheds like in Rwanda provide quality skins,” according to Mfuranzima.
He says the firm buys a piece of grade one finished leather of 30cm by 30cm at between Rwf1,500 and Rwf1,800 each from Kigali Leather, while it is Rwf1,100 for imported ones.
“But we prefer the local because they are of quality despite the high prices.” The processing centre buys 1,500 pieces of finished leather every month.
Figures show that if Rwanda processes and tans hides and skins into leather products, leather exports can increase to generate $170 million per year from $14 million presently.
Patrick Nzabonimpa, one of the small dealers, says they collect hides and skins, which they sell to big traders who in turn supply the factory and sell others outside the country.
However, we usually find that some of them are damaged and of low quality due to poor management, he adds.
have stifled the growth of the sector. The fact that a big percentage of hides and skins are exported to the region has starved local tanneries of raw materials.
Many dealers prefer to sell hides and skins to neighbouring countries, where they fetch better prices, according to stakeholders. However, a number of interventions were instituted, including levying high taxes on exported raw hides and skins and increasing prices paid to small dealers, which has raised optimism among local leather tanneries. Kigali Leather, located in Bugesera District, is the biggest leather tannery plant in the country.
According to Yuan Wang, the managing director of Kigali Leather, government intervention helped reduce exports of hides and skins. The tannery has also been able to start producing finished leather from wet blue leather, thanks to the support.
Skin collection centres in the offing
In a bid to improve quality along the value chain and also ease access, collection centres for hides and skins will be set up in all districts across the country to improve handling and quality. The move is also expected to help reduce the volatility and fluctuation of prices for dealers, according to Dr Jean-Claude Rukundo, the director of veterinary inspection at Rwanda Agriculture Board.
“The skin collection centres will be managed by a cooperative… slaughterhouse operators will also be trained on the recommended preservation methods along the value chain to ensure quality,” Rukundo told Business Times.
This will ease grading of skins at collection centres and promote better management of skins in the value chain.
Recently, officials from the Ministry of Trade and Industry, Rwanda Agriculture Board and Rwanda Standard Board and other key leather industry stakeholders met in Kigali to discuss technologies for leather manufacturing and the hides and skins value chain as part of efforts to improve handling and the sector’s production.
Capacity building
Dr George Nyombaire, the head of research and development coordination at National Industrial Research and Development Agency (NIRDA), says that there are about 20 small skin processing units mainly using artisanal methods.
NIRDA chief Sayinzoga. / Michel Nkurunziza.
Kampeta Sayinzoga, the director general of NIRDA, says there is need for new measures that would help to increase leather production in Rwanda to supply local plants with quality raw materials sustainably.
Considering that the number of cattle is slowly increasing to nearly two million and goats are over 2.5 million, but we still produce under capacity it needs new measures to reverse the situation if the sector is to grow and become sustainable to attract more investors, according to Sayinzoga.
Challenges persist
If dealers continue to export most of the hides and skins to neighbouring countries, the sector will continue to be affected, according to Wang.
In fact, lack of enough raw materials (hides and skins) is one of the biggest challenges the sector faces. For instance, there was a big shortage of supplies of raw materials between June and August last year as many dealers prefer to export hides and skins to neighbouring countries, says Wang.
The problem only reduced following government intervention, he says. The prices paid by local leather tanneries was also increased and “is still going up.”
The factory buys a kilogramme of hides at over $1 (about Rwf862) and Wang says prices will be increased gradually to attract local suppliers.
“Kenya and Tanzania pay slightly higher prices for raw hides and skins that is why Rwandan dealers prefer to export them,” he says.
He adds that the two countries restrict export of hides and skins by imposing taxes on them.
He calls on the Rwandan government to also levy higher taxes to discourage the export of hides and skins to the region.
The low supply of hides and skins experienced last year affected the firm’s production capacity, which dropped from processing 10 tonnes of skins per day to about seven tonnes.
They produce more than 3,000 pieces of wet blue leather per week and about 1,500 pieces of finished leather, depending on the market.
Wang adds that the factory makes between four and five tonnes of finished leather per day and intends to invest another $2 million in the plant this year to increase production capacity to up to 20 tonnes daily.
The company also makes a number of leather products, including shoes, handbags and leather chairs, which are sold locally.
From January to November 2017, Rwanda generated $6.7 (about Rwf5.8 billion) revenue from export of hides and skins. The main destination of Rwanda hides and skins in November 2017 was Kenya at 90.64 per cent, while 9.36 per cent went to China.
Skills gap
Mukashyaka.
“Government is setting up a leather industrial park in Bugesera District, which will provide investors in leather manufacturing an opportunity to expand, while also ensuring a ready market for hides and skin dealers,” she says.
Mukashyaka adds that the country needs more quality finished leather products from local factories to reduce on imports, especially from Ethiopia and the EAC.
“As they expand, these factories will provide locally-sourced hides and skins ready market, which will create confidence among sector stakeholders. However, we need to build the capacity of sector players to be competitive,” she notes.
Anncee Kuradusenge, the agro-processing and biotechnical research division manager at NIRDA, says most of players in leather processing are small with artisanal operations.
Therefore, they should join hands and form bigger leather companies to venture into leather making jointly, advises Kuradusenge.
Export oriented
Dr Jean-Claude Rukundo, the director of veterinary inspection at Rwanda Agriculture Board, said only 30 per cent of the hides and skins produced in Rwanda remain in country.
However, part of this is also exported to the region as wet blue leather. However, this could soon change following the establishment of more leather making plants in the country.
The development comes as part of efforts to boost leather production in the country. Rwanda is a big producer of animal products in the region, but still imports most of the finished leather needed by the footwear and other sectors.
The country has an estimated 1.4 million heads of cattle, over 2.5 million goats and 630,860 sheep as per 2016 statistics.
Dr Rukundo says that there are more five registered modern abattoirs, currently, while five more are in the process of being registered in Gicumbi, Ruhango, Muhanga and Nyarugenge districts. Another four abattoirs are still under construction in Rusizi, Ngoma, Kamonyi and Kayonza districts.
He says abattoirs that do not meet standards are being closed “because they affect skin production and the whole value chain.
Dealers speak out
John Mfuranzima, the manager of Gatsibo Community Leather Processing Centre, told Business Times that they are currently buying finished leather from Kigali Leather.
“Though the quality of finished local leather products is good, prices are high compared to imported leather. Another reason factor we buy leather from the plant is that studies have revealed that cattle that were kept in cowsheds like in Rwanda provide quality skins,” according to Mfuranzima.
He says the firm buys a piece of grade one finished leather of 30cm by 30cm at between Rwf1,500 and Rwf1,800 each from Kigali Leather, while it is Rwf1,100 for imported ones.
“But we prefer the local because they are of quality despite the high prices.” The processing centre buys 1,500 pieces of finished leather every month.
Figures show that if Rwanda processes and tans hides and skins into leather products, leather exports can increase to generate $170 million per year from $14 million presently.
Patrick Nzabonimpa, one of the small dealers, says they collect hides and skins, which they sell to big traders who in turn supply the factory and sell others outside the country.
However, we usually find that some of them are damaged and of low quality due to poor management, he adds.
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