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Canadian businessman invests in a shoe factory in Ethiopia

Tigrai Online
April 15, 2012

A brand new shoe factory in Ethiop0ia - Tigrai Online  Inside a brightly lit shoe factory off a stone-pitted dirt road on the outskirts of Addis Ababa, Tal Dehtiar shuffles past rows of work stations, his face a cloud of disappointment and disbelief.

Labourers cut and stitch pieces of leather as the faint unbroken hum of factory machines carries through the air. Others glue rubber soles onto the bottom of leather uppers. One woman uses a grinder to smooth a sole’s edge.

White boxes filled with finished shoes and boots are piled high against the wall. The factory looks like a model of efficiency. The trouble is, the finished footwear is to be shipped to Italy, not to Dehtiar’s Canadian company, Oliberte.
Dehtiar placed an order for 4,500 pairs of footwear six months ago, but the factory, called Tikur Abay, has yet to deliver a single shoe. At least one of Dehtiar’s customers — which include The Gap and Town Shoes — is threatening to cancel because of the delay.

Even worse, Tikur Abay’s owner might cancel his order if Dehtiar complains. It would be impossible to find another factory in this African city capable of producing his shoes this spring.

How much this could cost Dehtiar is weighing on his mind — the 4,500 pairs are worth $250,000 in revenue. But there is a bigger issue: How much the failure of businesses like Oliberte could cost Africa.
After outsourcing the production of his shoes to three factories in Addis Ababa, Dehtiar has now leased his own factory. It will cost about $100,000 up front and is scheduled to open in May. He believes it will cut production expenses, reduce delays and help increase his sales to about $1 million this year. Projected annual costs are $500,000.

When the factory opens, Oliberte will employ 40 workers. Since its shoes are currently made in third-party factories, Oliberte currently has just six employees.

Oliberte will offer slightly better-than-average salaries, roughly $90 for every 20 days of work, compared with the industry average of $60 to $80. The company is also planning to offer health care, maternity leave and an education fund for employees’ children.

Will that be enough to get the reliability Dehtiar desperately needs?

Abel Zabena, a 26-year-old shoe designer, has worked for Dehtiar for five months.
Zabena and his mother Desta Debela explained that his job will give him a chance at happiness, and a life beyond his parents’ home.

Debela, 48, works alongside her husband in a bottle-cap factory. After 30 years, their salaries are 1,800 birr ($102) per month. Zabena makes 3,000 birr. It’s good money in a ragtag neighbourhood where concrete homes are hidden behind corrugated tin sheets.

“My friends’ kids, they just do nothing, it’s so hard to find a job,” says Debela.

Foreign investment in Africa is increasing, but with the jobs come higher prices. A one-way ride in a public bus costs five birr, five times as much as two years ago. Fuel prices are surging so much that children on the side of the road do brisk business selling pats of dried dung that can be used as cooking fuel — 20 for $1.

Debela has read newspaper articles trumpeting the millions in foreign aid that have purportedly been spent in Ethiopia. But she hasn’t seen it. “I’d rather have new jobs than more aid.”
When he was in Grade 10, Zabena decided to learn a trade, later attending a leather institute.

Today, Zabena shares a bedroom with his 20-year-old brother Getahun. After helping his parents with bills, he saves about 1,000 birr a month. One day, he plans to find an apartment for himself and girlfriend Selam.

Source: The Star read more

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