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The Council of Ministers three weeks ago decided to
transform the former Akaki Pump Factory and its
surroundings into an industrial zone for shoe
manufacturing. The 52,000sqm Factory has been
sitting idle after it stopped production 10 years
ago.
The Ministry of Trade and Industry (MoTI) first
submitted the proposal to create the sixith
industrial zone in proximity of Addis Abeba with the
100,000sqm plot surrounding the Factory.
Accordingly, the Council approved the proposal and
gave the mandate of appropriating the plots for
investors to the Ministry.
The government has focused on boosting the quality
and quantity of exports in a bid to boost foreign
currency revenue increasingly sucked dry by oil
imports, especially in leather and leather exports.
The infrastructure equipped industrial zone is
expected to bring a quick boost to a sector that
obtained just a fraction of a percentage point of
its export target in the first quarter of the
current fiscal year.
The Plan for Accelerated and Sustained Development
to End Poverty (PASDEP) envisions completely
transforming the Ethiopian leather sector from
producing semi-processed leather to finished
leather. In a bid to encourage factories to increase
value-added exports, the government has imposed a
higher tariff on those exporting semi-processed
leather as of January 1, 2008.
When the five-year strategic plan gets completed,
the country anticipates to earn 221 million dollars
from the export of shoe and leather products. Of
these expected earnings, 178 million dollars is
predicted to come from the export of shoes alone.
To realise this ambition, the country’s 6.4 million
pairs of shoes produced in 2005 has to grow to 20
million in 2010. Hence, the number of shoe factories
is expected to grow to 50 while 24 shoe accessory
producers would also join the market, according to
the plan.
Girma Birru, minister of Trade and Industry, has
stated two weeks ago that his Ministry is
technically supporting investors in the sector.
“In addition to providing training, we are backing
those that are trying to transform to producing
finished leather products like shoes,” he said. “The
establishment of the Kaliti Industrial Zone is part
of this strategy.”
German, Indian and Italian shoe factories are
expected to take plots and install a factory in the
Akaki Industrial Zone. Each securing close to
5,000sqm plots, the Zone can accommodate 20 shoe
factories.
The German giant, Ara Shoes AG, which showed
interest to construct its factory in the facility,
is one of the largest shoe-makers in Europe. It also
is one of the six largest branded footwear houses in
the world with its production facilities in six
countries and outlets in 40 countries. In 2006, the
company sold 10 million pairs of shoes.
Minister Girma seems to have been impressed with the
coming of Ara.
“Ara is known for producing comfortable shoes all
over the world. One of the reasons why we
established the industrial zone is because Ara
showed interest,” he told journalists at his office
on February 6, 2008.
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