The leather value chain

The Kenyan leather value chain includes livestock farmers, livestock traders, butcheries, slaughter facilities owners, hides and skins traders and exporters, tanners, artisanal footwear and leather footwear manufacturers, and goods manufacturers.

An abundant and diversified resource base includes cattle, goats, sheep, pigs, camels, rabbits, crocodiles, ostrich and fish. According to the Leather Value Chain Investment Profile published by the Kenya Investment Authority (KENINVEST), Kenya contributes to only 3.5 per cent of leather production on the African continent, despite having the third-biggest livestock resource in Africa.

The profile states that the leather industry value chain comprises four broad stages. During the first stage, raw hides and skins (H&S) are obtained. In the second stage, raw H&S are converted to semi-processed (pickled and tanned) and the third stage produces fully processed (finished) leather.  In the fourth stage, leather products are manufactured, e.g., footwear, garments, accessories such as watch straps, handbags, tabletops and notepad covers, and automotive or furniture upholstery.

The production of hides and skins can be considered mainly a by-product of the meat industry. The second and third stages are the most capital intensive, while the fourth stage can be viewed as the most labour intensive.  Says the report, developing countries like Kenya benefit from cheap access to raw materials and lower labour costs and are thus able to produce leather at lower cost than developed countries.

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