Turkish investors set eyes on Tanzania leather industry
Over 40 businesses in Tanzania have signed deals with Turkish investors who have been keen on tapping into Tanzania leather industry.
The investors say they were overwhelmed by the positive response and interest they received from local companies. The Turkish investors are looking to unseat the dominance of the China footwear in Tanzania.
“We found the market better than we expected. It is more developed and vibrant. Already forty Tanzanian companies have come and we signed deals so far and we are expecting more,” Islam Seker a Member of Board of Directors of Istanbul Leather and Leather Products Exporters’ Association said.
According to Seker, the Turkish investors planned to capitalize on existing good bilateral relations between Tanzania and Turkey to boost exports of leather footwear and products to Tanzania noting that they see the East African country as a vital market due to its rapid growing urban population and middle income earners.
He said the Tanzania market was vital also because it is a gateway to the East and Central Africa due to its location. Tanzania, a gateway to six landlocked countries in Eastern and Central Africa, provides natural access to DR Congo, Rwanda, Burundi, Zambia, Malawi and Uganda.
Tanzania is an access to a market of more than 300 million people in Eastern and Southern Africa in which the East African country enjoys preferential trading arrangements by virtue of being a member of SADC and East African Community (EAC).
“Tanzania is an emerging economy in Africa with very strong growth. Economic issues here are better compared to many places in Africa... and we know each other better,” he said. Mr Seker said they were undaunted by the fact that Tanzania is second leading country with the highest number livestock in Africa and had a growing leather industry full of potential because they believe that would enhance competition which would lead to improvement in quality.
Tanzania is second in Africa after Ethiopia with highest livestock population of more 22 million cattle, 16 million goats and seven million sheep as per 2015 statistics.
While Ethiopia is the leading producer and exporter of leather products in Africa, Tanzania uses only a fraction of its great potential in leather industry for production to feed the domestic industry. The East African country spends substantial amount of its scarce foreign exchange to import around 50 million shoes annually.
Other imports on leather products include bags and handbags, wallets and belts that can be made locally using the available raw hides and skins. “Competition shouldn’t scare you because it is a good thing in business. It makes you strive to improve quality... competitive market is good to consumers,” he said.
According to him, Turkish leather industry was capable of producing 400 million pairs of shoes every year and yet they import footwear worth 1.0bn US dollars every year. “If you don’t allow imports, your industry will not develop”, he said.
Their biggest market is Russia, Iran, Germany and Netherlands but they also export to South Africa, Kenya and Tanzania, he said. “We will be going back home full of aspiration of the Tanzania market,” he said.
