LEATHER VALUE CHAIN INVESTMENT PROFILE
LEATHER VALUE CHAININVESTMENT PROFILETANZANIA
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LEATHER VALUE CHAININVESTMENT PROFILETANZANIA2018
Geoffrey Idelphonce MwambeExecutive DirectorTANZANIA INVESTMENT CENTREFOREWORDTanzania is best known for its impressive tourist’s destinations and colourfulhistory, but to potential investors it is widely considered to be a majorinvestment destination in the East African region. Investors seeking to investinto the region need to understand characteristics of Tanzania as the largestcountry in the region in terms of population and its size.His Excellence Dr. John Pombe Magufuli, The President of the United Republicof Tanzania has put more emphasis on industrialization as the main agenda for hisgovernment. He stated categorically that his government focuses on building an industrydriven economy.In order to create an environment for private sector growth and conducive for investments and businesses, HisExcellency Mr. President launched a war against graft, grand corruption, bureaucracy, laziness and institutionaldiscipline in the public sector with a view to create a more stable, predictable and attractive business climate.In response, Tanzania Investment Centre has been undertaking intensive campaigns on promoting theestablishment of new industries. Both local and foreign companies have shown great support to the governmentinitiatives in the establishment of new industries.For Tanzania to achieve industry driven economy, investors are cordially invited to invest in manufacturing sector.It is through industries that Tanzania will be capable of exporting finished goods as opposed to raw materials. Thesector will also create employment, expand markets for agriculture and livestock products, and generate revenueto investors and government.LEATHER VALUE CHAIN INVESTMENT PROFILE TANZANIAThis profile stands as guidance on how investors in the country can build new investments in leather. Leatherprocessing is a fundamental sub-sector within the larger livestock industry, which has great potential to contributetowards the economic development. Tanzania is home of the 2nd largest livestock herd in Africa with largeestimated cattle population, goats and sheep. The importance of the leather industry is undeniable for the UnitedRepublic of Tanzania as it provides clear opportunities for value addition to the hides and skins produced inTanzania. This provides an important locally available resource that is raw material for the tanning industry and formanufacture of finished leather and leather products including upholstery, shoes, handbags and belts, but alsogenerates sizeable export earnings.4According to the World Economic Outlook report 2016, Tanzania is among the fastest growing economies in theworld ranking 9th out of 190. As per 2017 World Investment Report, Tanzania continues to perform strongly againstpartner states in the East African region. Tanzania is currently ranked among top ten most attractive businesslocations in Africa as per Rand Merchant Bank (RMB) statistics of 2016. UNCTAD statistics also reveal that in 2016,Tanzania attracted US 1.35 billion in FDI surpassing its EAC partners, Uganda, Rwanda, Kenya and Burundi whichonly received US 541 million, US 410 million, US 394 million and US 0.1 million of FDI, respectively.Therefore, this profile guideline is expected to provide all the necessary information required by investors interestedto invest in the country in livestock value chain particularly the leather subsector. It is our sincerehope that this guidance will encourage and strengthen investment inflows into Tanzania.As the primary agency of the government for investment, promotion and facilitation, Tanzania Investment Centre(TIC) is looking forward to facilitate you to invest and grow with the fast growing economy in the region. I thereforeencourage everyone interested in our services to visit www.tic.go.tz.
ACKNOWLEDGEMENTSThis profile has been produced under the framework of the Supporting Indian Trade and Investment for Africa(SITA) project, funded by the Department for International Development, Government of the United Kingdom,and implemented by International Trade Centre. SITA is a South-South trade and investment project aimed atimproving the competitiveness of select value chains and increasing investment in five East African countriesthrough partnerships with institutions and businesses from India.Special contributions to writing this report have been provided by:Quality Assurance:International Trade Centre (ITC), Supporting Indian Trade and Investment for Africa (SITA) – T.C.A. Ranganathan,External Consultant; Jarmila Sarda, Investment Expert (SITA);Ministry of Industry, Trade & Investment, The United Republic of TanzaniaAuthors: Nicholas Mudungwe, Mariana Cavezza, Jarmila SardaLayout: Jesús AlésEditor: Vanessa Finaughty International Trade Centre 2018ITC encourages reprints and translations for wider dissemination. Short extracts may be freely reproduced, with dueacknowledgement, using the suggestion citation. For more extensive reprints or translations, please contact ITC,using the online permission request form: quest/LEATHER VALUE CHAIN INVESTMENT PROFILE TANZANIAThe views expressed in this report are those of the authors and do not represent the official position ofInternational Trade Centre, Tanzania Investment Centre or the Government of the United Kingdom. The imagesused in this profile may not always accurately reflect the country context.5
6LEATHER VALUE CHAIN INVESTMENT PROFILE TANZANIA
Table of Contents10Geographical Overview10Political Overview11Economic and Financial Overview11TANZANIAN LEATHER INDUSTRY15Overview15Tanzanian Leather Value Chain17Animal husbandry17Investment Incentives23Visas and Work Permits26Registration Procedures for Companies26Types of companies26Private companies26Foreign companies26Registration procedures27Industrial Utilities27Water27Electricity27Slaughter slabs, slaughterhouses andabattoirs17Labour Conditions and Wage Rates28Tanning18Land Availability28Light manufacturing– footwear and leather goods18Institutional Support28Tanzania Investment Centre ( TIC )28Investment Opportunities in the TanzanianLeather Sector20Export Processing Zone Authority ( EPZA ) 29Modern, efficient slaughterhouses20Leather Association of Tanzania ( LAT )Leather processing20Leather products – footwear and leathergoods20Leather industrial park20USEFUL CONTACTS30FINANCIAL INSTITUTIONS32TRADE AND INVESTMENT CLIMATE 21 INFORMATION SOURCESTrade3521Liberal trade policy21Bilateral and multilateral investment andtrade agreements21Taxation2922Value added tax ( VAT )22Corporate tax22Income tax22SkillS and development levy23Withholding tax23Import duty23LEATHER VALUE CHAIN INVESTMENT PROFILE TANZANIAWHY TANZANIA?7
List of TablesTABLE 1: SELECTED TANNERY CAPACITIES IN 201518TABLE 2: STRATEGIC AND OPERATIONAL OBJECTIVES OF TANZANIA’SLEATHER SECTOR STRATEGY19TABLE 3: RESIDENT TAX RATES IN MAINLAND TANZANIA22TABLE 4: FEES PAYABLE FOR COMPANY REGISTRATIONIN TANZANIA27TABLE 5: COMPARISON OF KILOWATT PER HOUR CHARGES BETWEEN TANZANIAAND SELECTED EAST AFRICAN COUNTRIES27PULSES SECTOR INVESTMENT PROFILE: TANZANIAList of Figures8FIGURE 1: GDP AND PER CAPITA INCOME PROJECTIONS ( 2010–2021 )11FIGURE 3: LIST OF IMPORTING MARKETS FOR ALL PRODUCTS EXPORTEDBY TANZANIA IN 201612FIGURE 4: LIST OF SUPPLYING MARKETS FOR ALL PRODUCTS IMPORTEDBY TANZANIA IN 201612FIGURE 2: ANNUAL AVERAGE INFLATION AND INTEREST RATES ( 2012–2018 )12FIGURE 5: TRIPARTITE FREE TRADE AREA MAP13FIGURE 6: FDI INFLOW TO TANZANIA14FIGURE 7: TANZANIAN EXPORTS OF LEATHER, 2005–2014( US THOUSANDS )15FIGURE 8: MAJOR AFRICAN EXPORTERS OF H&S ( TOP ), LEATHER ARTICLES( CENTRE ) AND LEATHER FOOTWEAR ( BOTTOM ) IN 2014 ( US MILLIONS )16FIGURE 9: MAIN COUNTRIES FOR TANZANIA’S LEATHER EXPORTS17FIGURE 10: TANZANIAN PRODUCTION OF H&S, 2008–2013( EQUIVALENT TO HEADS SLAUGHTERED )17FIGURE 11: PRINCIPAL IMPORTERS OF FOOTWEAR TO TANZANIA ( 2001–2016 )18FIGURE 12: PRINCIPAL IMPORTERS OF LEATHER GOODS TO TANZANIA ( 2001–2016 )19
ACVAgreement on Customs ValuationLDCLeast Developed CountriesAFCFTAContinental Free Trade AreaLATLeather Association of TanzaniaBRELABusiness Registration andLicensing Agency of the Ministryof Industry & Trade of theUnited Republic of TanzaniaMIGAMultilateral Investment GuaranteeMITMinistry of TradeRECRegional Economic CommunitySEZSpecial Economic ZoneCMACommission for Mediationand ArbitrationDAWASCODar es Salaam Waterand Sewerage CorporationSADCSouthern African DevelopmentCommunityDDIDomestic Direct InvestmentTANESCOTanzania Electric SupplyCompany LimitedDFTPDuty Free Tariff PreferenceTIATanzania Investment ActEACEast African CommunityTICTanzania Investment CentreEPZExport Processing ZoneTFTATripartite Free Trade AreaFAOFood and Agriculture Organizationof the United NationsTIFATrade and InvestmentFramework AgreementTRATanzania Revenue AuthorityUNUnited NationsVATValue Added TaxWTOWorld Trade OrganizationZIPAZanzibar InvestmentPromotion AuthorityFDIForeign Direct InvestmentFOB( Incoterm ) Free On BoardGDPGross Domestic ProductH&SHides and SkinsICSIDInternational Centre for Settlementof Investment DisputesLEATHER VALUE CHAIN INVESTMENT PROFILE TANZANIAAbbreviations & Acronyms9
shutterstock.comWhy Tanzania?GEOGRAPHICAL OVERVIEWLEATHER VALUE CHAIN INVESTMENT PROFILE TANZANIAThe United Republic of Tanzania wasformed in 1964 when the sovereign states ofZanzibar and Tanganyika united. MainlandTanganyika covers more than 99% ofthe combined territories’ total area.10Tanzania has a territory of 947,300 km², outof which 54,337 km² consists of inland water.Mainland Tanzania is situated between the areaof Tanganyika, the Great Lakes of Victoria,Nyasa and the Indian Ocean. It boasts roughly1,400 kilometres of coastline and is borderedby eight countries: the Republic of Uganda,the Republic of Burundi, the Republic of Kenya,the Republic of Rwanda, the Republic of Zambia,the Republic of Malawi, the Democratic Republicof Congo and the Republic of Mozambique.Due to six of these countries being land-linked,Tanzania provides natural access to the region.Due to the historically low density of humansettlement, Mainland Tanzania is home to anexceptionally rich array of wildlife. Approximatelyone-fourth of Tanzania’s land has beenset aside to form an extensive network ofreserves, conservation areas and nationalparks, a number of which (including SerengetiNational Park, the Selous Game Reserve, theNgorongoro Conservation Area, and KilimanjaroNational Park) have been designated UnitedNations Educational, Scientific and CulturalOrganization (UNESCO) World Heritage sites.Key factsCapital:DodomaArea:947,300 km²Population:53,950,935 (2017)0–14 years:45% (2017)15–64 years:52% (2017)Labour force(over 15 years):26.96 million (2016)Population growth:2.8% (2017)Youth literacy rate(15–24 years):87.31% (2015)Urban population:33% (2017)GDP (nominal): 47.431 billion (2016)FDI inflow: 1.961 billionExports:21.62% billion of GDP (2015)Imports:26.34% billion of GDP (2015)Exchange rate (per US ):TZS 2,247.26 (2017)Govt. expenditure: 8.43 billion (2015)Govt. revenue: 6.82 billion (2015)GDP per capita (nominal): 867 (2016)GDP growth:7.1% (2017)Foreign reserve: 3.771 billion (31 December 2016)Inflation rate:5.2% (2016)Currency:Tanzania shilling (TZS)Other major cities:Dar es SalaamLanguage:English, Swahili (official languages)Religion:Christian 61.4%, Muslim35.2%, folk religion 1.8%, other0.2%, unaffiliated 1.4%Source: TIC, 2014; World Bank, 2015; WEF, 2015; CIA, 2016
POLITICAL OVERVIEWECONOMIC AND FINANCIALOVERVIEWTanzania is divided into 26 regions:21 on the mainland, three on ZanzibarIsland and two on Pemba Island.Mafia Island is administered from the mainland,while Zanzibar and Pemba Islands have a separategovernment administration. Dodoma, located on themainland, is the designated official capital of Tanzaniasince 1974. Dar es Salaam, however, remainsthe centre of most government administration,as well as the largest city and port in the country.In 2016, Tanzania had an estimated population of55.16 million, which indicates the largest populationin East Africa with the lowest population density;almost one-third of the population is urban. Tanzania’syouthful population (under 25 years old) accountsfor roughly two-thirds of the population. Sinceapproximately 800,000 young Tanzanians enterinto the labour market every year, the governmentplaces strong importance on generating theconditions through nurturing a vibrant privatesector to provide productive jobs for its youth.Tanzania is one the most peaceful and politicallystable countries in Africa, with no history of civilwars, ethnical conflicts or internal uprising. It isan established multiparty democracy, with 19political parties registered in the country. Economic stability Consistent implementationof liberal policies Investment incentives and guarantees Liberal foreign exchange regime Rapid growth in domestic lending Improvements in global %10006.40%8006.20%6006.00%4005.80%20005.60%2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 20217.00% 6.3% 6.5% 7.0% 7.0% 7.3% 6.9% 7.0% 7.1% 7.1% 7.1% 7.1%7788789711071 1178 1293 1416 1550 1707 Transformation into a middleincome country Access to markets throughmembership of bilateral andmultilateral trade agreements Competitive operations costs Vast availability of labour force Exceptionally rich array of naturalresourcesand wildlife World renowned tourist attractionsLEATHER VALUE CHAIN INVESTMENT PROFILE TANZANIA7.40%Source: Factfish, 2016 Peace and political Stability Specific policies in place to improvemacroeconomic performanceand investment flowPer Capita (USD)660 Strategic location Inflation stabilityGDP Growth573TANZANIA – KEY FACTS Important growth on GDP performanceFigure 1: GDP and per capita income projections( 2010–2021 )530Political stability remains the cornerstone of Tanzania’sstrong economic performance. Tanzania hasachieved a rise in its economic growth in per capitaterms through its vast national resources and tourism.Gross domestic product (GDP) growth during theperiod of 2009–2016 averaged 6%–7% per year. Theinflation rate has been on a downward trend since2012. A targeted monetary policy regime is beingused, which has significantly contributed to financialstability over the years and the country has largelycompleted its transition to a market economy.11
Figure 2: Annual average inflation and interest rates( 2012–2018 )The economy depends on agriculture,which accounts for more than one-quarter ofGDP, provides 85% of exports and employsapproximately 65% of the workforce. All landin Tanzania is owned by the government,which can lease land for up to 99 years.18.0%16.0%14.0%12.0%While the Republic of India is the largest exporterof Tanzanian products, followed by the Republicof South Africa and the Swiss Confederation,it is the People’s Republic of China that headsthe imports of products to Tanzania, with Indiabeing the second and South Africa the thirdmost important importers. Overall, the countryhad a negative trade balance in 2016 with atotal imported value of 7,688,981,000 againstan exported value of 420152016Consumer price inflation (av)Figure 3: List of importing markets for all products exported by Tanzania in 2016List of importing markets for a product exported by United Republic of Tanzania in 2016Product: TOTAL All productsExported Value, USD itzerlandChinaBelgiumComorosKenyaCongo,Viet NamDemocraticRepublicof theJapanFigure 4: List of supplying markets for all products imported by Tanzania in 2016List of supplying markets for a product imported by United Republic of Tanzania in 2016Product: TOTAL All products2.000.000Ixported Value, USD thousandLEATHER VALUE CHAIN INVESTMENT PROFILE TANZANIASource: International Trade Centre e: International Trade Centre ysiaSaudiArabiaUnitedStates ofAmerica2018Lending interest rate (av)Source: Tanzania National Bureau of Statistics.India2017Germany
shutterstock.comTanzania is a member of the East African Community(EAC), along with Uganda, Kenya, Burundi,Rwanda and the Republic of South Sudan. As aSouthern African Development Community (SADC)member, Tanzania has access to 14 additionalmarkets exceeding a population of 215 million.The COMESA-EAC-SADC Tripartite Free TradeArea (TFTA), officially launched in June 2015, issetting the stage for the establishment of a singlemarket for 26 East and Southern African countriescomprising more than 625 million people.Moreover, In March 2018, 44 member countriesof the African Union (including Tanzania) signedthe Continental Free Trade Area (AfCFTA).After the ratification of at least 22 countries, thiswill become one of the world’s largest free tradeblocks with a creation of a continental market forproducts and services for 1.2 billion people.LEATHER VALUE CHAIN INVESTMENT PROFILE TANZANIAFigure 5: Tripartite Free Trade Area MapSource: UNCTAD13
The consistent implementation of liberal policiesacross the whole economy has contributed toimproved confidence in the Tanzanian economyamong international investors. In order to furthercomplement the overall economic environment,the Government of Tanzania has institutedspecific policies, which are aimed at improvingmacroeconomic performance and investment inflow.Inflows of foreign direct investment (FDI) have grownsignificantly, as illustrated in figure 6. It is estimatedthat more than 40% of FDI going to East Africa isdestined for Tanzania. Top countries for sourcesof FDI in Tanzania include China, Canada, SouthAfrica, Kenya and the United Kingdom of GreatBritain and Northern Ireland. FDI has quadrupledin the period 2000 to 2014, from 0.5 billion to 2 billion respectively, and it is still growing, especiallyin the tourism and hotels, energy infrastructure,telecommunications services, breweries, roadconstruction, agriculture and mining sectors.The country offers a well-balanced and competitivepackage of fiscal incentives in comparison withother African countries. Tanzania has signed doubletaxation treaties with several countries, includingIndia, and negotiations are in progress with othercountries. Investments in Tanzania are guaranteedagainst nationalization and expropriation. Tanzaniais also a signatory of several multilateral andbilateral agreements on protection and promotionof foreign investment, e.g. Multilateral InvestmentGuarantee Agency (MIGA) and International Centrefor Settlement of Investment Disputes (ICSID).Tanzania boasts a fully liberalized foreign exchangeregime, which is important in the execution of efficientinternational transactions. An occasional interventionby the Bank of Tanzania is to smooth out short-termvolatility in the exchange rate. These operations continueto be undertaken consciously without compromisingthe objective of maintaining an adequate level ofinternational reserves contributing to stability, which iscrucial in supporting business growth and stability.Domestic credit to Tanzania’s private sector increasedfrom 9.8% of GDP in 2006 to 15.2% of GDP in 2015,growing at an average annual rate of 5.16%. Theexpanding domestic credit lines greatly facilitateaccess to working capital for new investments.Figure 6: FDI inflow to Tanzania2.500.000.0002.000.000.000FDI 0-YearsLEATHER VALUE CHAIN INVESTMENT PROFILE TANZANIASource: World Bank, 2015.14Tanzania’s financial sector has expanded inrecent years. There are more than 30 banks inthe country and foreign-owned ones account forapproximately 48% of the b
8 pulses sector investment profile: tanzania list of tables table 1: selected tannery capacities in 2015 18 table 2: strategic and operational objectives of tanzania’s leather sector strategy 19 table 3: resident tax rates in mainland tanzania 22 table 4: fees payable for company registration in tanzania 27 table 5: comparison of ki
Handmade Leather Photo Frame Suede Leather with Beed Work Photo Frame . LEATHER ACCESSORIES Leather Business Cards Holders Leather Credit Card Holder Leather Dustbin Leather Card Holder O u r P r o d u c t s. MOBILE & TAB COVER AND ACCESSORIES Leather Mobile Cover Leather Cushion Covers . Nature of
leather needs some body. Vegetable tanned leather, latigo, English bridle leather, harness leather and tempered rawhide all will split well. Softer leather tend to stretch, compress, and not get a "bite" into the splitter blades well so soft chap leather, upholstery, and similar leathers will not reliably split with a bench top splitter.
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market. Perfect seam positioning as well as the joining of the leather/artificial leather with the soft pad are . Intermediate Layer / Sandwich None Variant Semi-rigid or soft / . The leader in leather surfaces Awards for leather applications Reference projects BMW 3-series - Center door insert: PU Back-foaming, Trimming, Edgefolding BMW .
crust leather. The paper consists in studying the physical properties of aldehyde-tanned leather and chrome- tanned leather. The aim is to find out the possibility of replacing the wet-blue leather, containing Cr(III) salts, with the glutaraldehyde-tanned wet-white leather. The physical properties of the aldehyde-tanned leather were
in leatherworking. 2. Explain to your counselor a. Where leather comes from b. What kinds of hides are used to make leather c. What are five types of leather d. What are the best uses for each type of leather 3. Make one or more articles of leather that use at least five of the following steps: a. Pattern layout and transfer b. Cutting leather c. Punching holes d.
Product Value Chain (PLM), Procurement, Maintenance, Manufacturing, Value Chain Execution, and Value Chain Planning. New this year is a Cross Value Chain track, an integrated view across all areas. Product Value Chain Solution Area The Product Value Chain Solution Area
Guardsman Leather Care Collection to protect your leather furniture from the matters noted in clause 2. . the leather care technician be unable to remove the stain or repair the damaged area Guardsman will arrange for the stained or damaged area of leather to be replaced at no cost to you. -4-
