Friday 01 November 2019
BUSINESS DAY
53
MADE in aba
Positioning Aba products for global competitiveness Gbemi Faminu
C
o n su m e r s i n Nigeria are familiar with made-in-Aba products. The Aba model has been in existence for many years and has continued to thrive irrespective of a myriad of challenges, policy changes and influx of foreign products into Nigeria. Aba has over 50,000 manufacturers of shoes and fabrics, contributing to employment and the gross development of Abia State and Nigeria. Despite the large amount of dedication, innovation and passion, these artisans still have to work tirelessly to sustain themselves while much of the profit goes right past them— to the waiting hands of those who do less work. Aba products are exported abroad, but most of them are branded ‘Made in China’ or ‘Made in Italy’ to enhance their marketability. “It is trade malpractice, but its target is to increase a c c e p t a b i l i t y ,” s a i d Ike Ibeabuchi, CEO of MD Services Limited, a manufacturer and service provider. “But it would really be nice to make Aba brand strong by projecting it to the rest of the world. This can only be achieved by letting the world know where the products are coming from,” he further said. Quality is a major issue for Aba products. It is still a mixed bag as many Aba products have good quality while others have comparatively low quality. Olusegun Adeniyi, a Nigerian consumer, said he does not trust many Aba products and generally made-in-Nigeria goods. “I always take my time when buying things for myself and I do not mind the cost as long as I am able to get value for my money,” he told BusinessDay. “I prefer foreign products not necessarily top designers but as long as I am sure of its durability and quality. I do not trust most Nigerian made products as they do not give value for its purpose,” he said. Mbanefo Elijah, a Lagos-
based consumer, said Aba manufacturers must be sensitive to quality and designs. “Whenever I shop, I watch out for quality, beauty, and durability regardless of the cost,” he said. ”Once it meets these criteria, I rush for it, whether it is Nigerian or foreign made. I use both of them because some of the locally made products surpass foreign products,” he further said. But things are looking up in Aba in terms of designs. Traders from West African neighbours come into the industrial city every week to buy different product designs. Southern African schools place orders directly from the shoe makers. Even Canadians, Europeans and the Chinese are coming, placing orders themselves directly or through their Nigerian proxies, BusinessDay was told in Aba. One million pairs of shoes are produced by more than 80,000 leather makers in Aba each week. With 48 million pairs produced each year at an average price of N2,500 a pair, the industry is said to be worth up to N120 billion. The Aba artisans put in efforts to expand their horizon, but experts tap regular training as one major way of boosting the capacities of the artisans. The business is getting bigger by the day. Many are already online, with the likes, of Gada Africa, Jiji.ng and abanaijamade.com. ng, among others, handling marketing and distribution of those shoes, including belts and trunk boxes, after online orders are taken. Online shops take 20 to 50 percent cuts from sellers, BusinessDay gathered from the shoe makers. But analysts suggest that Aba artisans must form partnerships with local and foreign businessmen to scale. Most businesses in Aba are not registered formally with the government or the Corporate Affairs Commission. This hinders e a s y a c c e s s t o l o a n s, national and international opportunities; and leads to less business visibility. Most of the businesses in Aba are worth more www.businessday.ng
than the owners are aware of. Development of these businesses will not only promote the made-inNigeria campaign, but will help the manufacturers to scale, create more job opportunities, and boost the reputation of made-inAba/-Nigeria products. Aba has high potential in leather and garment. The Abia leather industry alone is made up of shoes, trunk boxes and belts. It p rov i d e s e m p l oy m e nt for tens of thousands, with many specialising in different stages such
as designing, patterning, cutting, skiving, stitching, peeling and finishing. It is made up of clusters such as Powerline, Imo Avenue, Bakassi, Aba North Shoe Plaza, Omemma Traders and Workers, ATE Bag, and Ochendo Industrial Market, comprising input suppliers, among others. However, the industry is in thriving in chaos as the majority of shoe makers in the industrial city are poorly structured, making scale-up difficult. Exports are made informally, making tracking and planning difficult.
Okezie Ikpeazu, governor, Abia State https://www.facebook.com/businessdayng
@Businessdayng
Their machines are crude and much of their work is still done by human labour. The more advanced shoe makers in Lagos are mostly foreigners, who design their shoes abroad and then import Completely Knocked Down shoes back to the country for finishing. “ This is where the problem lies. We in Aba have no good machines,” Ken Anyanwu, secretary of the Association of Leather and Allied Industrialists of Nigeria (ALAN), who produced Nigerian armed forces shoes in 2016. “The Bank of Industry has done its best by giving some of us N300,000 each, but it takes $250,000 to N750,000 to set up a standard shoe factory,” he said. He said this is why the majority of Aba shoe makers are not meeting demands and are over working themselves once orders are placed. “It is a problem already for us because if a customer comes and we can’t meet demand, he will go elsewhere. The industry needs retooling,” he said. Nigeria and Ethiopia have things in common in terms of leather. Ethiopia is home to 56 million cattle, which provide ready raw materials to shoe makers. But Nigeria has 131 million cattle, goats and sheep, according to the Federal Ministry of Agriculture (2011 figures), with more shoe makers. The country is the second most populous (with 105 million people) @Businessdayng
after Nigeria with almost 200 million people. Nevertheless, Aba shoe makers import animal skins from China and many parts of Africa and Europe. “What happens is that the tanneries in Kano and Kaduna process animal skins and sell them as leather in the global market, earning foreign exchange,” said Chinatu Nwagbara, coordinator of Made-inAba Project, who produced shoes for Olusegun Obasanjo in 2016. “So we go to China and other countries to buy. Sometimes, we buy our products and re-import,” he said. More investments are going to Ethiopia. Between October and December 2016, Ethiopia attracted over $500 million in FDI to the shoe and leather industry. About 124 investors willing to invest $3.5 billion indicated interest to swell the export-oriented shoe market, according to the E t h i o p i a n I nv e s t m e n t Commission (EIC). Ethiopia exported $33.7 million worth of footwear products, mainly to the United States in 2015, one million lower than the preceding year. Through the African Growth and Opportunity Act (AGOA), the US-Africa trade law that allows duty-free and quota-free access into the US market, Ethiopia shoe exports jumped from $630,000 to nearly $7m between 2011 and 2012, a more than tenfold increase, according to statistics from USAID. The Abia State government said in 2016 that Huajian Group in Ethiopia, which made shoes for Ivanka Trump, United States president’s wife, would be coming to Aba. In S eptemb er 2017, Sherr y Z hang, general manager of Huajian Shoes in Addis Ababa, told BusinessDay in Addis that the company was still interested in setting up a shoe factory in Aba, southeast Nigeria. But this has not happened since. However, a new set of machines have been imported by a new investor i n Ab a, w h o p l a n s t o modernise the industry, BusinessDay was told.