The state-owned Ethiopia Tannery Share Company, close to the village of Ejersa, is on a site covering 65 hectares. It is 2.5 kilometres from a man-made lake, Lake Koka, from which it has traditionally drawn its water resource, although it now uses water from geothermal springs that flow close to the site. The facility has been producing leather from local sheep and goat skins, and bovine hides since 1975, for a range of applications including gloves, shoes, leathergoods and some upholstery. For the last four years it has been run on the state’s behalf by UK-based tanning group Pittards, a company that believes strongly in the present and future potential of Ethiopia and of the tannery.

Things function in a different way there now. Of around 20 tanneries across the country today, only one is still owned by the state, the Ethiopia Tannery Share Company (ETSC), near the village of Ejersa, about two hours south by road, from the capital, Addis Ababa.

What makes the tannery even more unusual is that, four years ago, the state asked UK-based tanning group Pittards to run ETSC on its behalf, which is why John Moriarty, who has been in the leather industry for more than 30 years and has spent his entire career with Pittards, now spends around 80% of his time in Africa, managing the ETSC operation. At the time of writing, Pittards is in advanced dialogue with the government of Ethiopia about the future ownership of the tannery. Pittards has traded with Ethiopia for over 90 years and has a long-term commitment to the people and country.

The link is clearer than may at first meet the eye: the tannery’s output is predominantly sheep (60,000 skins a week), and goat (12,000 skins a week) leather for gloves, compared to 1,500 bovine hides per week. Glove leather is where Pittards first made its name on the international leather scene, making material for products ranging from high-end ladies’ fashion gloves to gloves for professional golfers and catchers’ mitts and other baseball gloves for top sports brands, and Ethiopian skins have long been a prized raw material for making them. As long ago as 1986, the UK company set up an overseas technical development team to help the industry in Ethiopia make the transition from raw to pickle.

This was a far-sighted thing to do, but almost 25 years later, many of Ethiopia’s tanneries still only go to pickle. ETSC is the most prominent exception. Two years ago, the Ethiopian government voiced the desire to increase the value that the country receives from its hide-and-skin resources and put export tariffs of 10% on pickle and 5% on wet blue in an attempt to encourage tanning companies to go further towards producing finished leather.

“This didn’t prove to be quite the deterrent the government hoped for,” John Moriarty says now. “Most operators just agreed with their customers to share the extra cost. Many only wanted to produce pickle; their customers, who were mostly in Italy and the Far East, said they preferred to add value there. Then, in February this year, the government raised the tariff on both wet blue and pickle to 150%. By applying such a high tariff, the government is telling everyone, ‘You’re not listening to us; you have to go to added value.”

Livestock interpretation

Mr Moriarty makes the point that the size of Ethiopia’s combined herd could give a false impression of the scope of the leather industry there. In Europe, a large population of sheep would promise a substantial availability of skins as lambs often go to slaughter at about nine months. In Ethiopia, slaughter often takes place three years after birth. Plus, the cattle are bred, not for meat, but for ploughing fields; meat is very much an afterthought. The livestock population is large, but there are not as many hides available as one might imagine, and Pittards has already started to import raw material from other countries.

He points also to the particular religious situation in Ethiopia. The most recent census, which took place earlier this year, shows that 43.5% of the population are Ethiopian Orthodox Christians, while 33.9% are Muslim. Both of these religious affiliations have extensive periods of fasting. Even lay people in the Ethiopian Orthodox Christians are asked to fast for 165 days a year, including every Wednesday and every Friday. Ethiopian Muslims, of course, fast during daylight hours during the month of Ramadan, but additional days of voluntary fasting are widely followed by the Muslim population of the country. Then, at times of festival, the rate of slaughter can soar upwards. Mr Moriarty explains: “For a tannery, all of this needs interpreting. Sometimes, there are not enough skins to meet capacity, and at other times we have too many, and preservation of them becomes very important. In some Muslim countries, 80% of total annual slaughter takes place at the end of Ramadan, so a huge amount of material can come onto the market at once. At those times, we have to work night and day to get it all salted so that it can then feed into the system in the course of the year.”

He has travelled quite extensively in the region, to countries such as Chad, Mali and Niger, where this slaughter surge around the time of Eid ul-Fitr occurs, but where there is no tanning industry to speak of to absorb the hides and skins produced as a result.

Even before slaughter, ensuring the quality of animal skins, anywhere in the world, is an important matter. Ethiopia presents particular challenges, ekek, for example. Mr Moriarty believes this disease is causing $40 million worth of damage a year in terms of lower milk and meat yields, and lower quality of hides and skins. In an attempt to prove to livestock farmers and traders that investing in animal care and welfare can pay off in the end, ETSC is in the process of buying 1,200 live sheep of its own, which it will keep in pens in Debre Berhan, 120 kilometres north-east of Addis Ababa. It will provide feed and veterinary care, and when, in time, the skins come to the tannery it will attempt to demonstrate the difference a little care can make.

Integrated industry

Whatever the extent or the quality of the country’s hide and skin resource, Mr Moriarty feels it would make little sense for every tannery in Ethiopia to attempt to take the raw material through to finished-leather stage. “It would be pointless,” he says. “It would be much better for there to be a few specialising in finished leather and for the rest to be feeders. They might all have wanted to export and earn dollar revenue, but if no one will buy your pickle [because it has a 150% tariff on it]; this may be your best option.”

The tannery Pittards runs on behalf of the government is planning to increase its finished leather capacity, but it has much less interest in expanding at the beamhouse end. John Moriarty says that there is enough capacity in the Ethiopian tanning sector to cope, if it integrates in this way. He explains: “Most of the people in the pickling plants were originally skin traders. They know how to get the skins, which is not easy in this country as there are few abattoirs. And we need them, because, if you look at the number of skins we get through each week, you can see that this is a hungry beast. Each tannery can’t be everything. You have to have some degree of specialisation, but we’re big, and we want to be the finishing tannery in Ethiopia, letting others specialise in other areas. This idea is in line with government strategy and would benefit the whole country.”

The integration can, and already has, spread beyond the tanning industry. ETSC has been working closely for some time with Anbessa, a state-owned footwear manufacturer. Most of the hide leather it produces goes into the domestic market at the moment, because with European and US hides available in large quantities and at good prices, demand for African bovine leather on the open market is limited. But Anbessa is doing a good job and has done well enough in selling its shoes on the export market to win ETSC an award last year as non-direct exporter in its sector for 2008, recognition that it is a good supply partner to the footwear company. The government has been behind what Mr Moriarty calls “a huge drive to make shoe leather”, saying it wanted Ethiopia to produce 50 million pairs of shoes a year. “But there are not enough skins in the country for that,” he explains.

Much more recently, Europe’s biggest leather glove manufacturer, the German-based Otto Kessler Group, announced that it too intends to set up in Ethiopia, in addition to its glove-making unit in China, using ETSC leather to manufacture high-quality finished goods for the most important export markets in the world.

Power supply

Manufacturing leather or finished goods, or industrialised product, in Ethiopia has been a challenge in recent years. As the country has undergone rapid economic development, the demand for power has sometimes outstripped supply and this has sometimes resulted in power cuts. Pittards says the flexibility of staff has enabled the tannery to adjust and cope.
More power output is imminent as a second Gilgel Gibe hydroelectric power plant (Gilgel Gibe I is already in place) on the Omo River in the south of the country will come on stream in the months ahead, with a third to follow before 2012, which would give Ethiopia enough to meet its own energy needs, with enough capacity left over for it to become an energy exporter, or to enter into an exchange agreement with Sudan, trading Sudanese oil for Ethiopian hydro-electricity.

On the logistics side, there have also been recent developments. Bureaucracy requires careful handling in Ethiopia, and merely to put in place all the documentation you need to export a container of finished leather, or to import a container of chemicals can be a long, slow and expensive process. But the burden on the export side should become lighter now that the authorities have set up a dry port facility only 15 kilometres from the tannery, near the town of Mojo, within easy reach of not just ETSC, but also of new production sites for flowers, concrete and textiles that are growing up in the area. Containers of goods go there first and clear customs for Ethiopia and for Djibouti at the dry port, in the tannery’s own backyard, before travelling to the neighbouring country’s main container port, where their passage is proving much smoother.

John Moriarty is optimistic about the difference such developments will make, to his operation and to those of partner companies. 

Workers’ benefits

The approach to the Ethiopia Tannery Share Company is a colourful scene of traditional African huts, people ferrying water to their homes in containers borne by donkeys, teams of oxen on their way to or from ploughing a field, young adults walking to work in the nearby flower farms and cement factory, and groups of children who jump up and down and wave with delight at the sight of strangers.

The local community seems happy to have the tannery there, and for good reason. There is a clinic attached to it that serves the wider community, offering blood tests, treatment for conditions such as malaria and advice on a range of health topics. Also, the village of Ejersa now has a supply of clean drinking water because ETSC paid the contribution the community had to make to match a government water grant. A possible next step will be to use the hot water from the new bore holes from which hot water for tannery operations to supply a shower block in the village.

ETSC built and still supports the local school by allowing the teachers who work there to eat in its workers’ canteen. There is a dearth of education professionals in the area, so much so that the children have to go to school in two shifts, which means that the teachers have a keen need of a hot meal between morning and afternoon classes. Pupils eat at home, but they are no strangers to the tannery, coming regularly for educational visits to the production site and the surrounding land on which the company has planted 1,500 mango trees, 600 for avocados, 300 coffee plants and 35 beehives. The produce from the estate benefit the 631 people (474 men and 157 women) who work in the ETSC tannery, either through the crops going directly into the canteen, or through their sale, with the money going to local labour unions. Planting these crops, and setting up the beehives was the idea of Jamal Aliye, a member of staff at the tannery and a person who is passionate about creating a pleasant and productive environment there. He suggested the plants to commemorate the millennium, which Ethiopia celebrated exactly two years ago because it follows the Ge’ez, and not the Gregorian, calendar.

Future ambitions

After four years, John Moriarty harbours more serious ambitions than ever for the tannery he runs. “We’re looking to become world-class tanners of leather here in Ethiopia,” he explains, “providing management experience and marketing expertise to anyone who might require it. I’d also like us to set up our own shipping company; you can find outsource service providers for that here, but the levels of service could be higher. At the same time, I’d like us to become agents for as many tanning machinery manufacturers as possible, and the same with chemicals suppliers, for whom I’d build my own bonded warehouse. But we wouldn’t lose sight of our main ambition, to expand and improve our operation for producing finished leather, to satisfy our customers’ needs and expectations. There is a lot still to do, but I think we are on the right track and that our strong commitment to people in this area is helping. People are genuinely interested in us and worry if they think there is not enough power or enough water for us to keep producing. We get concerned enquiries about that. And then there are the children. As long as the local children still wave to us, I will take it as a sign that we’re not doing too much wrong.”

Share this story: