State injects Sh800m into leather sector

By FREDRICK OBURA

The leather industry is headed for better times following the announcement of Sh 8 billion boost by the ministries of Livestock and Industrialisation to reduce the cost of production.

Mohamed Kuti, the Minister for Livestock Development, said at the re-launch of Kenya Leather Development Council (KLDC) that money will help create more jobs and enhance competitive and fair grading systems.

"The scheme, which is expected to be implemented at a tune of about Sh8 billion, is good for the leather industry. More jobs would be created and pastorals mostly from marginalised areas like North Eastern would be empowered," said the minister.

The two ministries will lump together industries and support services that manufacture similar products in same areas.

Dr Kuti said a central hides and skins and leather auction centre would link investors with mini-processors to limit illegal exportation of hides and skin that has over time promoted unfair competition and tax evasion.

For the last 15 years, processed leather exports increased from 85 per cent in 1995 to 90 per cent in the 2010/2011 financial year.

Direct employment from the industry grew to 16, 000 up from 1,700 in 1995, while earnings rose from Sh2 billion in 1995 to Sh5.86 billion in 2010/2011 financial year. By 2013, the sector is expected to earn Kenya more than Sh9 billion, once mini-processing tanneries are completed by the end of this year – bringing the total to 19.