The Ministry of Trade and Industry has assured players in the leather value chain that there are plans to have a modern tannery park in Bugesera District to reduce imports of tanned hides and skins and as well as reduce the country’s trade deficit.
Local manufacturers of leather products such as shoes, belts, sandals, bags among others have been relying on imported tanned hides and skins because there is not enough quantity and quality of them on the local market.
Currently, there is one major factory in the country; Kigali Leather, which is also located in Bugesera District and it produces finished hides and skins.
However, leather products manufacturers such as shoemakers who spoke to The New Times said that the local price of tanned hides and skins is higher and that there are no diversified tanned hides and skins which they need to produce quality leather products.
"For instance, a good tanned skin, one metre goes for Rwf2,500 on local market yet we import the same size at Rwf1,300 from Nairobi in Kenya,” Jean d’Amour Uwimana a young entrepreneur who makes shoes in Nyarugenge district and retails them in 12 shops across the country told The New Times.
However, he said that there are also hurdles in importing the raw materials because it takes two months to order and import hides and skins from Kenya.
"If we get enough tanning factories in Rwanda with quality products at affordable price, it will significantly boost the leather sector and Made-in-Rwanda products,” he said, adding that the only existing factory can’t satisfy the demand.
Junis Mukanyandwi, another leather products maker said: "We rely on imports because that is the only way to get diversified tanned hides and skins. Most of the tanned hides come from Kenya.
Other material comes from China. Even though there is a tanning factory in Bugesera, the prices are higher and sometimes we do not get the varieties or kinds of hides and skin we want on the local market depending on the types and quality of shoes we want to make.”
Evalde Mulindankaka, the Industrial Infrastructure Policy Specialist at the Ministry of Trade and Industry told The New Times that the proposed Modern Tannery Park in Bugesera district could help to address the challenges.
"A modern tannery park is proposed in the Bugesera Special Economic Zone. The role of the government in the development of this tannery park will be limited to availing land of 15 hectares, putting infrastructure such as roads, power, water and others and investment in a centralized effluent treatment system,” he said.
He noted that studies have been carried out and only that remains is a budget for infrastructure development.
Existing tanneries to relocate
He said that it is also envisaged that "all existing tanneries in Rwanda, including Kigali Leather Ltd located in Bugesera will be relocated within the Bugesera tannery park.”
The government, he said, will also attract foreign investors to come and operate in the proposed tannery park.
Rwanda imported tanned hides and skins worth $15.6 million in 2019 an increase from $13 million in 2018 mainly from Kenya, China, Ethiopia, UAE and Tanzania and this, he said, could stop once Tannery Park is established.
As part of a strategy to boost leather sector, Mulindankaka, said that hides and skins collection centres are going to be established and operationalised across the country so as to improve the quality and collection of hides and skins needed in tannery.
In the leather industry, hides are defined as "skins” of large animals such as cows while skins refer to those of smaller animals such as goat, sheep among others which are used to make leather products such as shoes.
Statistics show that the number of cows rose steadily from 813,417 in 1992 to 1,449,888 in 2020.
Goats increased to 2,844,001, up from 1,891,612 while the number of sheep dropped to 601,836 last year, down from 733,000 in 1992.
Finished leather and modern shoe factory
Meanwhile, Mulindankaka said that the establishment of a finished leather and modern shoe factory will drastically reduce imports saying imports of new footwear increased $15 million in 2016 to $23 million in 2019.
On the contrary, Rwanda exported $585,936 worth of footwear in 2019 showing a very big trade deficit.
"We will create an enabling environment for the creation of a finished leather and modern shoe factory because the private sector is a primary target to reduce imports,” he said.
He added that the ministry is in process of reviewing and updating the strategy to transform the textile, apparel and leather sectors in Rwanda.
"The updated strategy will be hence developed to address issues that are still hindering the growth of domestic production capacity in the leather and footwear sector, and which persisted after the implementation of previous strategy thereby making this sector more competitive,” he added.
There is a need to increase the local capacity of producers to respond to the competitive consumer demands given the importation of new leather products and cheaper second-hand shoes which are gradually phasing out, he explained.
He added that to reduce leather products imports and increase the competitiveness of domestic enterprises, strengthening small production units within the leather value chain for efficient organization and coordination has also been considered in the strategy.
"There are around 100 SMEs which are in production of leather goods such as shoes, belts, bags and others,” he said.