Leather, the most traded commodity you didn’t know about

Getty Image: Leather products

Did you know that the total value of the annual trade in leather is estimated at 1.5 times the value of the meat trade; more than five times that of coffee and more than eight times that of rice? Yes, it is amazing, because most people would not think of leather as a great trade product or something to build a business around.

Leather and leather products are among the most widely traded and universally used commodities in the world. It’s no surprise that leather is in such a high demand given its popular use in the manufacture of shoes, belts, bags and several fashion accessories. As the global population grows and the demand and taste for fashion expands, the consumption of leather is bound to explode.

Africa is endowed with livestock. And this means it is a leading producer of hides and skins, the major raw materials used in the production of leather. As a by-product of meat production, the popular hides used in leather manufacture are from cattle, sheep, and pigs. Africa has nearly 15 percent of the world’s cattle and about 25 percent of its sheep and goats. Countries like Ethiopia and Kenya already earn significant export revenue from exporting hides and skins to the Middle East, Asia, Europe and North America.

However, the fact is that most Africans and their respective countries still do not recognize the great potential of leather. Many of Africa’s emerging entrepreneurs have had great successes after a short time with producing high quality leather goods. Interestingly, many of those featured in the media are African women producing bags, shoes and belts.

Business Concept

The interesting opportunities in this space include leather production (conversion of hides and skins to leather through a process known as ‘tanning’) which you then sell on in companies in Africa or abroad, and the opportunity of value addition, which means that you design and produce products made of leather such as shoes or bags, for example.

Both have big potential to become very profitable. However, while a leather production company requires considerable investment for the land/building and the machinery and staff, you are able to start shoe or handbag production almost immediately in a workshop on your own backyard using the craft skills of locals (just help them with improved finishing!). Several upcoming African entrepreneurs have started their businesses on a shoestring budget just like that and today their success stories are being featured in Africa business media.

To start this leather business, you will certainly need a country with great availability of skins and hides. And depending on the business concept you choose you may also need to consider a country with a vibrant retail market if you want to sell locally. Ethiopia, Nigeria, and Kenya seem ideal locations for that kind of venture. Botswana has a strong cattle sector that it plans to strengthen further. It is also one of Africa’s 5 safest countries that makes doing business relatively easy, so it’ is certainly a country to consider.

Action & Tips

1. Again, the best way to find out more about the leather industry in the country you want to operate in is to get in touch with the local Animal Production Societies and Associations. Almost every African country has something similar and they will be able to answer many of your practical questions. If you are in Africa reading this, pass by their offices in person, that’s usually the best way.

2. Visit workshops and small companies that are already producing leather products if that is what you are interested in, or find out as much as possible online about their success journey, which enables you to learn something from those lessons.

Author: NaijaRoko

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