Kenya is the fifth-largest economy in sub-Saharan Africa; we have a well-educated labour force; our financial services and information technology capabilities are amongst the most developed in the region; and our infrastructure is the most advanced among peers as well. We have access to vast resources and are home to some of the most innovative entrepreneurs globally.
Despite these advantages, our exports have stagnated at 15% of GDP, while imports have grown to 40% of GDP, creating a trade imbalance, weakening the Kenyan Shilling and increasing inflationary pressure.
Africa owns a fifth of the global livestock population but only accounts for 4% of the leather produced in the world. More specifically, leather produced in Kenya is sold predominately as a commodity of low quality or very little design differentiation. However, if we process the leather and manufacture it into shoes, the value of our leather would increase by twelve times. The size of Kenya’s current leather market amounts to $94 Million but only 4% of Kenya’s leather exports represent footwear, handbags, travel ware and other leather products. The creative industry is fast becoming a way to solve the unemployment problem and contribute to the country’s industrialization. It is with this in mind that Creatives Garage is intent on building ecosystems that shall drive access to markets for Creatives working in the various art forms, who with a little nudge, can help push Kenya into an industrial hub.
In a recent research done by Ministry of Industrialization and Enterprise Development, It was noted that the Kenya leather industry is highly fragmented and has limited linkages amongst stakeholders and lack of a coherent and shared competitiveness strategy by private sector, government and other institutions. The overall plan is to improve access to markets, while enhancing productivity and movement to value addition and strengthening collaboration in the industry. Three important strategies are recommended: (i) promote the dynamic restructuring of the industry; (ii) increase access to markets and induce greater demand for leather and leather products; and (iii) build quality and standards throughout the value chain.
Our labour cost is relatively cheap compared to that of Asia, and ourpreferential access to global markets creates a cost advantage that appeals to buyers as they look to diversify their sourcing base. Despite its advantage over other low-cost countries, Kenya accounts for only 0.4% ofthe USD 84 billion American textiles market. Bangladesh, a low-cost favourite, is approximately 9% more expensive than Kenya but commands 6% of the US market (USD 225 billion). We have the opportunity to build our share of the US market, enter other new markets and expand our range into higher value products in order to generate an additional USD 140 to 200 million in GDP and create 105,000 jobs.
Up until the imposition of an 80 percent export tariff on raw hides and skins in 2009; raw hides and skins accounted for more than 25 percent of Kenya’s total leather exports. Interviews with industry experts confirm that despite the tariff, there continues to be a high level of smuggled exports of raw hides and skins. Unfortunately, trade in raw and semi-processed leather only generates a marginal trickle-down effect on the rest of the Kenyan population.
Therefore, Creatives Garage has zeroed in on shoes because there is an increasing market for ethical fashion. By positioning ourselves to act as aggregators, we designed and developed the Shoejaa shoe, Syokimau edition with support from The Netherlands Embassy of Nairobi, PUM and Leather Industries Kenya. Here is a brief of what it took to inform the creation of this shoe.
Following the call for shoe designers, through
Leather Industries Kenya (LIK), we organized a
shoe design workshop that was hosted at the
Leather Industries Kenya factory in Thika. The
workshop was carried out with the goal to:
1. Introduce the designers to a mass production facility and enable them understand the cycles of production for shoes
2. Give the designers some technical knowhow on shoe design
3. Familiarize the designers with the material available for production as well as the production capacity
Following the lessons learnt from the shoe workshop, we carried out a quantitative research through a digital campaign that sought to understand what type of shoes Kenyans would like. The infographic below shows the results of this activity:
Using the data from the research phase, we developed designs that reflect the market demands as well as have an authentic Kenyan feel to them. The materials that were preferred for these designs included leather, suede and soles made from used tyres. Our goal was to partner with the informal sector (Jua Kali artisans), we identified and commissioned artisans at the Kariakor market to make the shoes off the designs we created.
Thanks to the support of the Embassy of The Kingdom of The Netherlands in Nairobi, we were introduced to an organization called PUM The organization matches businesses with experts from the Netherlands to advice on how to improve the business. Our need for this programme was to understand shoe making from a global perspective as we had envisioned that the Shoejaa Shoes would need to fit into best world practices to ensure quality production. Through this exchange, we were introduced to Theo Verbunt, who has been in the shoe industry for 40 years. This experience includes, shoe production and shoe trading that spans a global network. After a through walk through of the production capabilities of the partners we were working with (The artisans from the informal Sector and Leather Industries of Kenya), Theo gave us a quite candid view of how the sector is laid out from a practical perspective. His conclusions were:
1. “The Kenyan shoe industry has practically come to a total halt. It’s not even sure but it could well be there are only 2 or 3 factories as still “standing”.
2. The imports of cheap footwear has grown to such an overwhelming volume from China and other South Asian countries for such low prices that the Kenyan footwear industry did not stand a chance anymore to even think about competing with these imports. The import duties –being very high- also did not protect the industry.
3. The same goes with the Kenyan suppliers of all kind of materials necessary to deliver to the shoe industry, s.a. leather, soles, insoles, laces, glue etc. hardly exist anymore.”
Informed by the knowledge gathered as above, we begun work on developing the Shoejaa shoes version 1.1. This included redesigning the shoes and building on the story that the shoe line wants to tell. We chose to theme the Shoejaa shoes around Kenyan legends. Using the knowledge base we obtained from Theo and the designers at Leather Industries, we developed a shoe line with the help of an artisan who trades under Dan Shoes to develop the prototype 1.1.
Legislation for production
With the new found challenges we wondered what it would take to streamline production and through our lawyer, we started to explore developing a policy paper that can be presented for legislation. Through his input, we noted that the process to get a piece of legislation through follows a very lengthy process that we did not have the resources to follow through. Our lawyer gave us the following illustration to guide us in the stages it takes to move from an idea of policy into a draft bill.
With the learnings above, we noted that the partner we had identified to produce the shoes was not capable to deliver our designs.
This was noted by Theo (PUM expert) who detailed that the production capacity at the factory in Thika was limited to only producing the upper part of a shoe. Indeed with a closer interrogation of the process, we noted that the manufacturing plant was only manufacturing working boot uppers. This was quite far from the designs we had come up with for the Shujaa Shoe line. The factory as well could not produce the desired soles for the Shoejaa Shoe line.
From the first prototype (1.0) that with artisans at Kariakor market we noted that the artisans there were unable to translate the designs into the type of shoe we wanted. Their craftsmanship did not leave a neat finish and we doubted their capacity to mass produce. With both the factory and the artisans not being an option, we sought out another local shoe maker to manufacture the Shujaa Shoes. Working from a stall in a market in Nairobi’s Eastlands area, we found Dan (Whose brand is Dan Shoes). His craftsmanship was good and he confirmed he could do the manufacture of the updated designs. While he did manage to deliver the shoes with better finishing, it took two months just to get the samples. If we are to continue to work with Dan to produce even in small quantities (100 pairs) the timing would take too long.
With the constraints observed as above, to get the final prototype produced, we tried to reach out to closer production plants (In Ethiopia) but with little success. They were non responsive and thus we sought for different options to facilitate production. We started by going to India to source for a production partner. This was informed by information shared by Theo about production capabilities in India. While in India, we got to interact with various producers. The constraint we faced here though was expensive production costs. Understanding the demand from the market of a cost effective shoe, working with a partner from India would have not made economic sense. This left us with sourcing for production from China.
Our foray into the Chinese production plant bore fruits. We found numerous factories able to; produce the designs of the Shujaa Shoe line, with the desired upper material and desired soles. The constraint though is that they would need a minimum order of 1000 pairs just to produce the samples. Fortunately though, we found a manufacturer who was willing to work with us and produce the shoes for us. His requirement though is to order 100 pairs for him to produce the samples. Working with this manufacturer, the final product was ready for the market.
The uppers is made of cow leather (high quality hides) while the inner sole is made memory foam that ensures an ergonomic fit, dry feet and maintains comfort. The outsoles is direct injection rubber. The final product therefore is a quality product (as informed by the needs of the market) that is aesthetically pleasing and functional.
From the research we have done throughout this project, we draw the following conclusions:
1. While production in Kenya seems to have slowed down, there is a renewed interest in reviving industries in Kenya. This is evidenced by the creation of a leather industrial park by the Kenyan Government.
The park will consist of tanneries and shoe production plants that will help spur growth of the sector. Our partners in this project, Leather Industries of Kenya, have already pledged to move to the park once it is
fully realized. For Shujaa shoes, this means that the capacity to mass produce in Kenya is imminent.
2. While in India, we got the chance to meet an equipment manufacturer that has a machine that produces 50 pairs of shoes per hour (Worth to mention is that these are plastic shoes). Our observation from this experience though is that the rest of the global market is quickly improving their manufacturing ability by acquiring such machines. If our local designers are to stand a chance to either compete with the imports or export to the global market, we need an investment in machinery.
3. Noting that the expertise in the informal sector is low, we see an opportunity to partner with a select number to transfer the knowledge we have acquired through the run of this project. This means that if we are able to acquire machines for production, we can still partner with these artisans before the industrial park is realized.