Product Description: Hides and skins undergo a number of processing stages before a final product called finished leather is reached. The first phase of processing hides and skins which involved the removal of hair, fats, meat and other unwanted materials is labor intensive; and at the same time it is the unpleasant stage of changing raw hides and skins to finished leather. Finished leather is used for making leather product such as garments, shoe uppers, belts, sandals, cases and covers of all types, gloves, transmission belts, etc.
2.Market Potential: With about 16 percent of the area of the country and 27 percent of the population, the Amhara region has close to 30 percent of the total livestock population of the country. In 2004/2005, of the 71.4 million livestock population (cattle, sheep and goat) of the country, 20.2 million were found in the Amhara region. With this resource one would have expected the Amhara region to be a home of a vibrant leather producing industry. But this is not the case. It is only during the last 10 years that one or two hides and skins processing factories were established in the region. All the hides and skins produced in the region are exported to Addis Ababa.
The development of regions, countries and even localities starts with the efficient and modern utilization of their natural, man made and human resources. The Amhara region should do all what is necessary to develop and utilize its natural resources. Encouraging potential investors to invest in breeding, raising and processing the livestock resources is one important measure that should be taken by the regional government. Producing finished leather is thus one component of the development and utilization of the livestock resources of the Region. Finished leather has both domestic and foreign markets. In the domestic front, many leather garment small scale industries have been established in Addis Ababa in the last 10 years. With minor swings in the demand for finished leather, there has always been a captive foreign market for finished leather. Hence, the Amhara region can produce finished leather and export the product to markets within and outside the country. 3.Source of Raw Material: A the Present level of the development of the leather industry in the region, it will be difficult for any finished leather producing factory to find somi-finished leather as raw materials. It is, therefore, advisable if the factory becomes and integrated leather factory which starts from raw hides and skins and ends at the finished leather stage. If this is the case raw hides and skins will be obtained from the Region.
4.Process and Technology: The main stages of processing are in general, soaking, lining, relining, pickling, tanning, fatiguing and stuffing and dyeing. Major plant and machinery include drum with 5HP motor shaft pulley for each drum separately, electrical unit heater for stuffing durum 5HP, shaving machine single width, electrical hand operated settling out machine, lace cutting machine, wooden setting table, wooden straining frames hollow in center, water pump and prep line, etc.
5.Estimated Investment: For a plant which can produce 45000 kgs of finished leather per year, the estimated investment will be:
Buildings 1000m2 at Br. 1500/m2 ……………………..=Birr 1,500,000
Plant and Machinery ……………………………….…= Birr 600,000
Working capital ………………………………….= Birr 500,000
Total…………………… = Birr 2,600,000
6.Benefits: utilizes regional resource, increases incomes of livestock producers, stimulates the development of the livestock sector, earns foreign exchange
7.Location: Bahir Dar, Combolcha