COMESA
Leather and Leather Products Institute
(COMESA/LLPI)

Member of: IULTCS    International Council of Tanners    

Leather for Health, Wealth and Luxury

Kenya

Country: Kenya
 
Country Information
Country Size : 582,650 square kilometers
Population: 40.5 millions
Currency: Kenyan shilling (KES)
Languages: Bantu Swahili  and English
Capital City: Nairobi
GDP(US$): 32.2 billions
Economy-Overview: The regional hub for trade and finance in East Africa.
Main Economic Sectors: The major sectors of Kenya's economy are agriculture, industries and services. Agriculture that was accounting (with forestry and fishing) for about 24 per cent of GDP’s share has been declining. The services sector  particularly tourism is becoming a pillar of the Kenyan economy, accounting for 20 per cent of GDP and a significant portion of the country’s foreign exchange earnings.
Main Exports: Tea, horticultural, coffee, petroleum products, fish, cement
Main Imports: Machinery and transportation equipment, petroleum products, motor vehicles, iron and steel, resins and plastics
Main Industries: Food and beverages processing, manufacture of petroleum products, textiles and fibres, garments, tobacco, processed fruits, cement, paper
Natural Resources  
International Organization Membership: ACP, AfDB, AU, C, COMESA, EAC, EADB, FAO, G-15, G-77, IAEA, IBRD, ICAO, ICRM, IDA, IFAD, IFC, IFRCS, IGAD, ILO, IMF, IMO, IMSO, Interpol, IOC, IOM, IPU, ISO, ITSO, ITU, ITUC, MIGA, MONUSCO, NAM, OPCW, PCA, UN, UNAMID, UNCTAD, UNESCO, UNHCR, UNIDO, UNMISS, UNWTO, UPU, WCO, WHO, WIPO, WMO, WTO
Infrastructure:

Sea ports: Kilindini Harbour: Mombasa
Airports: 221, Paved 15, International Airports - Jomo Kenyatta International Airport, Moi International Airport, Eldoret International AirportRoads: total: 63,942 km: paved: 7,737 km, unpaved: 56,205 km (2000)Railways: total: 2,778 km: narrow gauge: 1.000-m gauge (2004

More than 90 percent of the population has access to GSM cell signals, Kenya's airline a top carrier in the region and its international airport a key gateway to Africa.
Other:  
Livestock Information
Cattle Population : 13 million
Sheep Population: 9.8 million
Goat Population: 13.8 million
Camel Population: 1.1 million
Other Populations: 0.4 million Pigs, 0.01 million Ostrich
Cattle Off take Rates: 10.2%
Sheep Off rake Rates: 28.1%
Goat Off take Rates: 33%
Camel Off take Rates: NA
Livestock Policy: * Livestock production is fully privatized and the Government’s role is the provision of extension services, especially in appropriate technology and improved management.

* The overall livestock policy is to sustain a proper balance in investments in the sub-sector and provision of services between the public sector, the private sector and the beneficiaries.

* Strengthen livestock extension servicesn Promote and encouragement of processing of long shelf life livestock products e.g., dairy products, camel milk, meat and honey/beeswax.

* Complete the process livestock reforms including finalisation of the various livestock policies and legal framework.

* Provide incentives to investors and entrepreneurs in livestock industry and skills for managing cottage inclusive.

* To source for funds to undertake comprehensive livestock census

* Development of infrastructure e.g. roads, power; etc.

* Develop a clear policy on livestock production, processing and marketing emphasising health and safety standards.

* Encourage the establishment of value adding processes.

* Enhanced private sector participation

* Participatory development i.e. enhance stakeholder participation in the sector development

* Access to local, regional and global markets through improved access in domestic market and expanded access to regional and global markets.

* Improved productivity and competitiveness of the livestock through sustainable increase in livestock resource base and improve efficiency in livestock production systems.
Slaughter Facilities: 2,000 slaughter facilities
70% - slaughter slabs
30% - slaughterhouses of various standards – mainly operated by town councils
Export Slaughterhouses  - 7
Hides and Skins
Quantity Hides: 2.5 million pieces
Quantity Sheep: 2.7million pieces
Quantity Goat: 5.4 million pieces
Annual Collection Level Hides: 83%
Annual Collection Level Sheep: 64.5%
Annual Collection Level Goat: 71%
Flaying methods: Hand and Knife flaying
Preservation Methods: Wet salted: Cattle 70% / Sheep 70 % / Goat 70%

Air-dried: Cattle 25% / Sheep 23% / Goat 23%

Ground dried: Cattle 5% / Sheep 5% / Goat 5%

Other: Cattle -% / Sheep 2% / Goat 2%
Grading Systems, Available Grades and Percentage of each: Grades I, II, III and IV (Cattle  34,32, 26 and 8 respectively) (Sheep 36, 34, 22, 8 respectively) (Goats 36, 34, 22, 8 respectively) 
Hides and Skins trade channels: NA
Market(%): International – 80%
Local – 20%
Major Markets: India, Pakistan, China
Annual Export Value(US$): NA
Average Market Bovine Price: NA
Average Market Sheep Price: NA
Average Market Goat Price: NA
Tanning
Number of Tanneries: 19
Installed Tanning Capacity: Hides: 3,300,000
Skins: 6,300,000
Tanneries in Operation: 13
Utilized Capacity: 80-100%
Output of the Industry: Wet blue
Hides: >1,076,400 pc,  Skins: >6,246,000 pc
Crust      
Hides: >246,000 pc ,  Skins: >432,000 pc
Finished
Hides: >450,000 pc, Skins: >240,000 pc
Number of Employees: >1,700
Market (%): 95% export, 5% for local market  , Major Markets: Pakistan, China
Estimated Annual Export Value: 47.64 million US$
Footwear
Number of Footwear Factories: 100
In Operation: 25 formal enterprises (60% of leather goods and footwears produced by the informal sector
Manufacturing Capacity:  (>70%) 4 million pairs
Number of Employees: NA
Market (%): NA
Estimated Annual Export(US$): 2.34 million US$
Leather Goods
Number of Leather Goods and Garment Factories: 30
In Production: 15
Manufacturing Capacity: Installed: 500,000 (small leather goods)
Utilized: 300,000 (small leather goods)
Number of Employees: 76
Market (%): Local  100%
Major Markets - Tourist
Estimated Annual Export Value(US$): NA
SWOT Analysis
Strengths: Kenya is a natural hub for regional services and regional headquarters due to its high quality manpower and its amenities. Many foreign investors based in Kenya sell services to the region. This position has not been actively promoted, however, and comparative advantages remain under-exploited.
Export-led agribusiness has developed international competitiveness, in significant part due to FDI. The industry has flourished notwithstanding the infrastructure and policy difficulties that have undermined the traditional industrial base.
With a deep-sea port and a well-developed airport Kenya has significant potential as a regional logistics hub. It is the main entry point for the Great Lakes Region, one of the few African regions with outstanding agricultural potential, and also serves
Uganda and the Western regions of Tanzania (currently trade from Arusha, to Mwanza, both in Tanzania, passes through Kenya).
Weaknesses: Kenya's industrial sector operates under old-fashioned management and production processes that have been made obsolete by more recent structures based on the concepts of Lean Production/World Class Manufacturing. These flexible forms of production organization provide significant and low-cost returns through, among other things, production-pulling, total quality control or cellular layouts. These forms of organization have been applied not just in high-income countries, but also in a variety of low-income economies (Kaplinsky, 1994). Visits to Kenyan manufacturing plants show that much of this organizational revolution has passed Kenyan industry by. Ironically, the very outdated nature of Kenya’s factory system could provide potential for investors, notably foreign investors, for output expansion and cost reduction at attractive incremental capital cost.
Opportunities: Agriculture is the mainstay of the economy, providing livelihood to approximately 75 per cent of the population.  There is considerable scope for diversification and expansion of the agricultural sector through accelerated food crop production and increase of non-traditional exports.  There are also opportunities for improvement in technology infrastructure such as packaging, storage, and transportation. Intensified irrigation and additional value added processing are marketable areas for investments.

Tourism is Kenya's third largest foreign exchange earner. The tourism industry is growing as a result of the liberalisation measures, diversification of tourist generating markets and continued Government commitment to providing an enabling environment, coupled with successful tourism promotion and political stability. Enormous opportunities exist for investment in film production; recreation and entertainment facilities in the following areas:  Conference Tourism,  Cultural tourism,  Cruise ship Tourism,  Aviation/tour and travel Tourism,  Eco-tourism

Manufacturing sector is an area where investment opportunities exist. Initially developed under the import substitution policy, there has now been a shift to export oriented manufacturing as the thrust of Kenya's industrial policy. The sector plays an important role in adding value to agricultural output and providing forward and backward linkages, hence accelerating overall growth.  The manufacturing sector now comprises of more than 700 established enterprises and employs directly over, 218,000 persons as at the year 2000. A wide range of opportunities for direct and joint-venture investments exist in the manufacturing sector, including agro-processing, manufacture of garments, assembly of automotive components and electronics, plastics, paper, chemicals, pharmaceuticals, metal and engineering products for both domestic and export markets.
Threats: Productivity is not only low relative to strategic competitors like China and India, but it is also falling behind. Kenya’s formal manufacturing firms have not seen gains in productivity in more than a decade. Meanwhile China and India have been making huge gains in firm productivity.

With the exception of the textiles sector, firms’ propensity to export actually fell between 1999 and 2002. AGOA helps, as it has already in textiles, but in other sectors Kenya has to compete against China and India.

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