Beijing opens door for Dar's leather exports

China has opened the door for Tanzania’s direct leather exports after signing an agreement for animals and plants related products during historic visit of President Xi Jinping.

The signing of the agreement was a sign of revamping the sector, which despite its potential, operates under its capacity by 50 per cent.

China has been importing leather from Tanzania all time around but through third parties, mostly Italy thus denying the country a substantial amount of revenue.

The Chinese Ambassador to Tanzania, Mr Lu Youqing, said that his country found out the country has top quality leather but failed to tap the potential fully due to lack of a bilateral agreement.

“The agreement would increase the current trade volume that reached 2.5 billion US dollars in 2012,” Mr Lu said during the launching of CRDB bank’s China Desk.

The ambassador added: “If there is no third party the business volume will increase.” He said another area expected to benefit following the Chinese president historic tour is tobacco. 

The country leather industry faced severe difficulties for a long time including high taxation and smuggling of raw hides and skins.

However, government’s initiative shows that the country has all the potential of becoming a giant exporter of leather products but conducive business climate should be created to attract significant investments. 

Low investments in value addition have denied the nation earnings as nearly 90 per cent of exports are raw hides and skin.

Official records show that skin and hides exports earnings last year increased by 23.5 per cent to 8.4bn/-, a figure indicating that the industry is operating below capacity. 

The Ministry of Industry, Trade and Marketing officials say the government’s target is to enhance the capacity of local industries to process all the skin locally instead of exporting raw.

Tanzania’s present capacity is to produce 2.8 million cattle hides, 3.8 million goat skins and one million sheep skin a year, which is nearly 94 million square feet but it is capable of collecting only 62 million square feet.

The tanneries capacity is to process 74m square feet of raw hides and skin. There are eight leather processing plants with a total capacity of 73.9 million square feet, but it produces only 34.3 million square feet which is equal to 46.4 per cent of the installed capacity.

Source: The Daily News, www.dailynews.co.tz, reported by Abduel Elinaza in Dar es Salaam

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