Nineteen years ago, Alpharama Tannery in Athi River was revived with a promise to breathe new life into Kenya's leather industry.
Today, the tannery processes thousands of raw hides and skins into finished leather, sourcing materials from nearly every county in Kenya.
Despite this robust supply chain, challenges persist in the leather production sector, an industry with great potential to lead Kenya’s manufacturing growth.
Sambasiva Rao, the managing director of Alpharama, explains that the tannery sources about 80 percent of its raw materials from counties such as Machakos, Kitui, Embu, Meru, and parts of North Eastern Kenya.
“For example, most goat skins are sourced from Eastern Kenya. We also have many goats slaughtered in Nairobi. Nyanza and Western mainly produce cattle hides. Rift Valley provides both cattle and goat skins,” he says.
However, despite this wide network, quality control remains the biggest challenge.
“Our main challenge is quality control at the slaughterhouses,” he says.
Most slaughterhouse employees lack training on proper skinning to remove high-quality hides for value addition and preservation.
Leather hung to dry at Alpharama Tannery Limited in Machakos County on November 19, 2024.
Photo credit: Bonface Bogita | Nation Media Group
“Alpharama has had to start distributing knives and preservatives such as salt to get good-quality hides and skins that can be turned into leather. There is a high demand for goat, sheep and cow hides and these fetch decent prices, compared to other regional markets such as Tanzania and Uganda. But currently, we're losing more than Sh10 billion worth of raw materials at the grassroots level,” he says.
Sh40,000 for one cowhide
In Samburu, where livestock is abundant and would feed tanneries and increase farmers' revenues, Alpharama is training local communities on how to preserve hides for tanning.
While they are also trying to partner with counties like Nakuru, Eldoret, and Siaya, limited resources have restricted the reach of these programmes.
Mr Rao emphasises the importance of educating farmers on the value of leather products.
He gives an example of one cowhide, which when it is value-added, can fetch Sh40,000, far exceeding the one-time value of meat.
“Whereas the meat is only consumed once. People need to realise that the by-product is extremely more valuable than the meat,” Mr Rao says.
Job opportunities
As demand for leather goods, wallets, bags, belts, gloves and garments grows and with the government's commitment to creating an enabling environment to attract domestic and foreign investors, there is a big employment opportunity.
"We have capacity gaps in both leather manufacturing (tanning) and product manufacturing. The number of semi/skilled personnel is low, in turn, this demand creates an opportunity for the various training institutions to fill this employment gap with the correct curriculum relevant to the skill market needs," he says.
Some tanneries have also had to do job training programmes via apprenticeship, where the apprentice receives a stipend and is guaranteed employment on completion of their training.
Mr Rao says support from the government by providing linkages between the livestock farmers, the county governments and the Ministry of Livestock and curbing illegal importation of raw hides would also boost the industry.
Workers at Alpharama Tannery Limited in Machakos County meticulously process cow hides and skins on November 19, 2024.
Photo credit: Bonface Bogita | Nation Media Group
"Kenya has the fourth largest livestock population in Africa. We can compete with any other tanneries around the world. We have a growing international leather market with high demand. Locally, the leather market is hugely untapped.
"We have over 14 million school-going children in Kenya, if each of them wears a Made in Kenya shoe, we will have consumed 50 percent of local leather. We also have a good and decent labour cost of approximately $220 (Sh28,500). Our neighbours in Uganda, Rwanda and Ethiopia pay an average of $60 (Sh7,800),” he points out.
Sh9 million on power costs
However, challenges such as high electricity costs—around Sh7 million monthly—remain a concern. Mr Rao advocates for subsidies to reduce costs for manufacturing industries.
“We're currently installing another plant and we expect the costs to go up to Sh9 million," he says.
He remains hopeful, though, that despite these obstacles, the leather industry in Kenya can grow into a billion-dollar sector.
"Demand from international brands is growing every day. We are among the best tanneries practising sustainability and traceability. This certification was initiated by brands such as Nike, Louis Vuitton, and Gucci. People have a notion that Ethiopian leather is of higher quality, but I think our cowhides are far better than Ethiopian hides.
"Our goat and sheep skins are far better than Ethiopian goat and sheep. Initially, they had better sheep, but the quality has reduced over the years. Ethiopians are now sourcing leather from Kenya," adds the Alpharama boss whose client's list includes Ikwetta, Jok A Jok, Umoja, and Josef Seibel Africa, a German shoe company that manufactures in Kenya.
Mueke’s take
Jonathon Mueke, the Permanent Secretary in the Ministry of Agriculture and Livestock says in the last two years the government has made strides and the industry is looking to grow jobs to 100,000 from the current 17,000, realising a value of Sh120 billion, up from Sh15 billion.
"We've seen quite a significant increase in terms of exports for leather and an increase in terms of value addition, although we still have a long way to go," he says, emphasising the development of the Kenya Leather Industrial Park in Kinanie, in Machakos.
"We have secured 100 acres for this project, provided power, road, water, and a common treatment plant for recycling. The government has built infrastructure for two tanneries and two leather manufacturing factories that will be leased out to the private sector as a startup for the park. It will be completed in March 2025 and once completed, we expect to host 30 leather factories," he tells the BDLife.
Bridging the skills gap
On inadequate skilled leather technicians, he says they have introduced additional leather courses in two training institutions and partnered with 16 Technical and Vocational Education and Training (TVET) to offer short courses, diplomas and certificate accreditations.
The Alpharama Tannery Limited's production facility in Machakos County on November 19, 2024.
Photo credit: Bonface Bogita | Nation Media Group
Mr Mueke adds that animal breeds that can grow to large sizes and produce larger hides and skins and providing slaughterhouses with 2,000 flaying knives for the correct removal of skins and hides from the animals are some of the strategies that are helping deliver quality hides to tanneries.
To encourage local manufacturers to add value to leather instead of exporting raw hides and skins, he says the game changer will be the Kenya Leather Industrial Park with incentives, including tax holidays, exemptions on duties for raw materials and machinery, and other financial incentives for local manufacturers.
Investor incentives
“International investors in the EPZs are entitled to work permits, 10 years corporate tax holiday, 25 percent corporate tax for another 10 years, 10 years of withholding tax holidays on remittances to non-residents, stamp duty exemption, import duty and VAT exemption on raw materials machinery and other inputs, 100 percent investment deduction over 20 years on building and no Import Declaration fees for shipping," he says, adding that Kenya has also partnered with India for leather research and Italy for trade purposes. "Thus a lot of our leather is going to Italy," he notes.
