Equity woos Italian leather industry investors for local partnerships

In a bold move to revive and strengthen the leather and tanning sector in Kenya and the broader East and Central African region, Equity Bank is positioning itself as a key financial partner to Italian investors eyeing local collaborations. This initiative comes as Italy pledges support to rejuvenate the industry, fostering deeper economic ties between the two nations.

During a recent stakeholder meeting held at Equity Centre in Nairobi, the Italian Ambassador to Kenya, Roberto Natali, highlighted the session as a landmark occasion in reinforcing bilateral relations. Ambassador Natali emphasized the shared vision of both countries to build a robust leather industry ecosystem through strategic partnerships, with Equity Bank playing a pivotal role in facilitating investment and financing opportunities.

“With me here is a delegation of leather industry experts and players from Italy, ready to explore ways to build capacity, establish more tanneries, and help develop and maintain an efficient leather supply chain in East and Central Africa. These efforts are aimed at adding value to the over five million skins of animals that go to waste yearly in Kenya,” said Ambassador Natali, reiterating Italy’s willingness to share knowledge, best practices, and exchange technology with the industry players in Kenya.

“Kenya, with its abundant livestock and growing industrial base, is uniquely positioned to become a regional hub for leather processing and related products production. We will support players in the industry, especially now that the authorities continue to emphasize the priority of leather as a key value chain through which youth can get jobs,” said Ambassador Natali, underscoring the importance of the delegates week-long knowledge exchange tour, which included field visits to local smallholder livestock farmers, slaughterhouses, leather processers and related products manufacturers.

The ministries of Agriculture & Livestock Development and Trade, Investment & Industry welcomed the partnership, with Principal Secretary Jonathan Mueke reaffirming the government’s commitment to further develop the leather value chain.

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Relaying PS Mueke's message in a speech, Kenya Leather Development Council CEO Dr Isaack Noor said Kenyan authorities and policymakers remain at the forefront of championing an enabling environment to support large-scale investment in the leather sector.

"We are keen on increasing the supply of quality hides and skins by training slaughterhouse staff, developing the necessary infrastructure such as the Kenanie Leather Industrial Park in Machakos County to support smallholder farmers with aggregation as well as negotiating global agreements and supporting skills development," said Dr Noor, reassuring the would-be investors and business partners of government’s protection through the Foreign Investment Protection Act, the Investment Promotion Act and the Investment Dispute Convention Act, aimed at safeguarding foreign investments.

Brent Malahay, Equity Group’s Chief Strategy Officer, outlined to investors and local industry players the financial institution's plan to catalyse the continent's huge potential through the Africa Recovery and Resilience Plan (ARRP). Positioning Equity as a reliable and responsive financial partner, Brent said Kenya presents significant growth potential across 12 key sectors, with leather products being a major subsector within livestock.

"With the support of Equity, sectors like transport and energy have been prioritized for investment. Kenya also has a competitive advantage, which positions the country to soon become a regional or even global hub in matters of leather," said Brent, adding that Kenya has a robust, existing value chain involving thousands of businesses supported and insured by Equity.

Presenting Equity’s value proposition to local leather industry players, Brent welcomed them for expansion partnerships with Equity, saying that those that stand to benefit include 13 major registered tanneries, with an estimated annual installed capacity of 31,440 tons of hides and 15,600,000 tons of skins, as well as 49 large slaughterhouses, 322 medium slaughterhouses and 1,735 slaughter slabs.

Welcoming the partnership, specialists from Italy—including manufacturers of machines, technologies, and chemicals used in dehairing and tanning hides and skins—said they are ready to help the region develop a sustainable leather value chain to benefit farmers and create jobs for youth. Representatives from key entities in the delegation, including UNPAC (National Association of Italian Leather Chemicals Manufacturers), UNIC (Italian Tanners’ Association), and ICEC (Institute of Quality Certification for the Italian Leather Sector), spoke highly of the partnership. To deeply understand the local leather market and connect Italian businesses with key stakeholders, the delegation went for field visits to livestock farmers and processors, including Farmers Choice Ltd, Reddamac Leather Centre Ltd, Ikwetta Ltd and Alpharama Ltd. Agostino Apolito, the General Director of ASSOMAC (the national association that represents the Italian manufacturers of footwear, leather goods and tanning machinery) explained how farmers and traders stand to benefit.

“Italy is a global leader in the leather products industry, and we want to work with Kenyan and African farmers and other leather industry players to help them through skills and technology transfer and enhanced European market access,” said Agostino, addressing farmers, traders, and related associations present.

Key local leather industry players also welcomed the leather value chain development drive by Equity. Sambasiva Rao Pamidimukkala, Managing Director of Alpharama Tannery in Athi River, explained how his tannery became a regional leader in the procurement and processing of skins and hides across East Africa and later broke into the global leather market with support from Equity.

“We continue to support farmers and help them maintain the quality of skins and hides, even as we eye expansion across the region,” said Rao.

The knowledge exchange visit builds on an initial stakeholder engagement four months ago and follows a cooperation agreement between Equity and the Kenya Investment Authority (KenInvest) under the Ministry of Investments, Trade and Industry (MITI). The Equity/KenInvest partnership is keen on revitalizing Kenya’s investment landscape, with special focus on some key sectors, starting with the leather industry. Through these partnerships, Equity is reinforcing its role as a key driver of socio-economic transformation in Kenya's leather industry, contributing to the creation of a more competitive, sustainable, and globally recognized sector.