The industrial district is still to be completed, the characteristics of the materials aren’t high-quality enough, and investors run away. A dangerous situation, filled with duties and (low) quality, are paralyzing the leather segment in Kenya. As explained by the theeastafrican.co.ke, “the industry entered a crisis after China began drastically cutting imports of semi-finished leather due to quality issues”. This doesn’t mean that Chinese producers have been left with no material: they have simply turned to other countries. Ethiopia and Tanzania for the most part, explains the African newspaper. Allegedly, other important investors are doing the same thing.
Duties, delays and quality
The theeastafrican.co.ke attributes the problems to the delay in completing the leather industrial park: the government has invested 164 million USD. The same government, meanwhile, has increased duties on raw material and semi-finished exports to 80% of the value, to encourage the sale of goods with higher added value. The delays also have something to do with the development of a water treatment plant that costed 9.6 million USD and projected 3 years ago”. “We have had a delay in completing construction of the plant due to the heavy rains – explains the party responsible to the mentioned newspaper -, but we will be done with work by September 2020”.
The focus is elsewhere
Meanwhile, investors are looking elsewhere. The African newspaper looks, for example, to the projects involving Italian businesses, such as Italprogetti and TMC (Toscana Macchine Calzaturifici), in Tanzania. Meanwhile, China, which is a relevant importer of Kenyan leather, has decreased its purchases. All these issues, always according to theeastafrican.co.ke, “are threatening the survival of the 14 tanneries present in Kenya, the majority of which are operating at 40% capacity right now”.
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