DEVELOPMENT BANK OF ETHIOPIA

RESEARCH AND PROJECT DATA MANAGMENT DIRECTORATE

RAW DATA AND INFORMATION ON

LEATHER SHOE MANUFACTURING

Prepared By: Team Three

MekashawMezgbu Sr. RPDM Officer

Shitaw Dangachew Textile l Engineer

Simachew Atinaf Jr. RPDM Officer

Revised By:

Mesfin W/Mariam Team Manager

Million Jarso Technical Team Manager

Approved By RPDM Approval Team Members

January, 2019
 Table of Contents
1. INTRODUCTION ........................................................................................................................ 1
1.1. BACKGROUND........................................................................................................................ 1
1.2. OBJECTIVE OF THE STUDY ..................................................................................................... 1
1.3. METHODOLOGY ..................................................................................................................... 1
1.4. SCOPE AND LIMITATION ......................................................................................................... 1
2. COMMODITY DESCRIPTION................................................................................................. 2
2.1. DEFINITION OF THE COMMODITY .......................................................................................... 2
2.2. CLASSIFICATION OF THE COMMODITY ................................................................................... 2
3. RAW MATERIALS AND INPUTS DATA ............................................................................... 5
3.1. MAJOR RAW MATERIALS FOR LEATHER FOOT WARE ............................................................. 5
3.2. ACCESSORIES MATERIALS ..................................................................................................... 5
3.3. PACKAGING MATERIAL .......................................................................................................... 6
3.4. SUPPLY, SOURCE AND DEMAND OF MAJOR RAW MATERIAL ................................................. 7
3.4.1. Source of raw material ...................................................................................................... 7
3.5. SUPPLY OF MAJOR RAW MATERIAL ......................................................................................... 8
3.5.1. Domestic Supply of major raw material............................................................................... 8
3.5.2. Import of major raw material............................................................................................... 8
3.6. DEMAND FOR RAW MATERIAL ..................................................................................................... 8
3.6.1. Demand for Leather ............................................................................................................. 8
3.7. EXPORT RAW MATERIAL ............................................................................................................ 10
3.8. MARKET ARRANGEMENT OF CHEMICAL AND INPUT USED ....................................................... 10
3.9. RAW MATERIAL PRICE ............................................................................................................... 10
4. FOOTWEAR PRODUCTION AND TECHNOLOGY SELECTION .................................. 11
4.1. PRODUCTION PROCESS OF LEATHER SHOE .......................................................................... 13
4.2. PRODUCTION PROCESS FLOW CHART ................................................................................... 15
4.3. MACHINERIES AND EQUIPMENTS ......................................................................................... 17
5. MARKET STUDY RAW DATA .............................................................................................. 27
5.1. MARKET SEGMENTATION .................................................................................................... 27
5.2. WORLD MARKET .................................................................................................................. 27
5.2.1. WORLD PRODUCTION OF LEATHER FOOTWEAR .................................................. 27
5.2.2. WORLD EXPORT OF LEATHER SHOES ....................................................................... 28
5.2.3. WORLD IMPORT OF LEATHER SHOES ....................................................................... 29
5.3. DOMESTIC MARKET ............................................................................................................. 29
5.3.1. LOCAL PRODUCTION ....................................................................................................... 29
5.3.2. IMPORT ................................................................................................................................. 30
5.3.3. ETHIOPIAN EXPORT PERFORMANCE......................................................................... 30
5.3.4. Supply side ...................................................................................................................... 31
5.4. MARKET ARRANGEMENT AND STRATEGY .......................................................................... 32

i
 5.5. PRICE TREND ........................................................................................................................ 32
6. PROBLEMS AND CONSTRAINTS ........................................................................................ 33
6.1. PROBLEMS ........................................................................................................................... 33
7. PARAMETERS, TECHNICAL COEFFICIENTS AND ASSUMPTIONS ......................... 34
7.1. BASIC ASSUMPTION ............................................................................................................. 34
7.2. REVENUE ESTIMATION ......................................................................................................... 34
7.3. CONVERSION FACTOR .......................................................................................................... 35
7.4. INVESTMENT COST ............................................................................................................... 37
7.4.1. Machinery and equipment ............................................................................................... 37
7.4.2. Vehicles ........................................................................................................................... 37
7.4.3. Operational Expenses ..................................................................................................... 38
7.4.3.1. Current Average Price of Major Raw Materials ........................................................ 38
7.4.3.2. CURRENT AVERAGE PRICE OF AUXILIARY MATERIALS ............................... 38
7.4.3.3. CURRENT AVERAGE PRICE OF PACKING MATERIALS ................................... 39
7.4.3.4. CURRENT AVERAGE PRICE OF UNIFORM & CLOTHS ...................................... 39
7.5. OVERHEAD EXPENSES ......................................................................................................... 39
7.6. INSURANCE .......................................................................................................................... 41
7.7. WORKING CAPITAL.............................................................................................................. 42
REFERENCE ...................................................................................................................................... 43

ii
1. INTRODUCTION
1.1. Background
DBE one of governmental financial institution established to provide financial support
for viable projects. In line with the newly vested responsibility by the management,
the Directorate avail raw data and information that facilitate financing of a given
project on leather footwear manufacturing. Hence, this is raw data and information
consolidated to provide an up-to-date data for appraising of related projects.

1.2. Objective of the study

The general objective of the document is to provide an up to date raw data and
information on leather footwear manufacturing and marketing for appraisal of projects
related to the sub-sector.

1.3. Methodology
Both Primary and secondary data were collected. Primary data were collected from
operational firms engaged in the same line of business while secondary data were
collected from Ethiopian Leather Development Institute (ELDI), CSA, ITC and
ERCA.

1.4. Scope and limitation

The document encompasses leather based footwear production including all types of
shoes that are produced using leather and leather products. Absence of historical price
both for raw material and selling price to trace trend could be mentioned as a
limitation of the document.

1
2. COMMODITY DESCRIPTION
2.1. Definition of the Commodity
Leather Footwear is an item of clothing made by humans that covers and protects the
foot, including the soles of the feet. Leather footwear is made of tanned hide and
skins. It allows people to walk on the rough surfaces such as gravel roads without
hurting their feet. It consists of garments worn on the feet, for fashion, protection
against the environment, and adornment.

Shoes are a type of footwear that protects the foot and the soles of the feet. Shoe,
outer covering for the foot, usually of leather with a thick sole and heel, and generally
(distinguishing it from a boot) reaching not higher than the ankle. A shoe is an item of
footwear intended to protect and comfort the human foot while doing various
activities. Shoes are also used as an item of decoration

2.2. Classification of the commodity

The major types of leather footwear classified based on product type as follows.

 Gents shoe
 Ladies
 children’s
 Safety shoe
 Military and worker shoe Military
 Sport shoe
 Sandals
 Gents shoe
The design of shoes has varied enormously through time and from culture to culture,
with appearance originally being tied to function. Dress shoes are made for people to
wear when they are wearing formula clothes such as a suit and tie. Dress shoes are
normally made from dark-colored leather that is shined using shoe polish. People
working in professions such as business, law and politics wear dress shoes. People
working in restaurants or retail stores may also wear dress shoes.

2
 Ladies Heeled footwear is footwear that raises the heel of the wearer’s foot
significantly higher than the toes. When both the heel and the toes are raised equal
amounts, as in a platform shoe, it is technically not considered to be a high heel;
however, there are also high-heeled platform shoes.
 Safety shoe a pair of safety boots (also known as safety shoes) is personal
protective equipment for foot protection at work arena. It prevents from getting
foot injuries due to chemicals or even bad weather, sharp object edges, hot
objects, wet slippery surface, heavy objects falling, falling rolling objects, pinch
points, rotary machinery etc. Occupational Safety and Health Administration
(OSHA) requires the employers to assure that the employees use protective
footwear while working in the areas where there are dangers of foot injuries.

 Military and worker shoe Military boots are boots designed to be worn by
soldiers. This boots are worn by the soldiers during training, with soldiers who
serve on tanks and tracked vehicles, and also in jungle warfare or in hot, wet and
humid environments. They are made of hardened and waterproofed leather. Work
shoes are designed for people who work in construction or factory jobs. Work
shoes often have a steel toe cover to protect the person's toes. Work shoes are
usually made of strong leather, to protect the person's foot from sharp objects or
dangerous chemicals.

 Sport shoe Sport footwear is an item of footwear designed for sports and worn
when we engaged on different kinds of sporting activities. There can be different
styles of sport footwear depending on the different kinds of sports i.e. athletic and
football .Athletic footwear is a name given for the footwear primarily designed for
sports or other forms of physical exercise. In recent years such type of footwear is
used for causal everyday activities. It is typically used for running. Football
footwear is an item of footwear worn when playing a football.

3
 Sandals are a type of footwear that consists of a covering for the sole of the feet
and straps or ties which hold the sandal onto the foot. Sandals are worn in warm
countries. Sandals are an open type of outdoor footwear, consisting of a sole held
to the wearer's foot by straps passing over the instep and, sometimes, around the
ankle. While the distinction between sandals and other types of footwear can
sometimes be blurry, the common understanding is that a sandal leaves most of
the upper part of the foot exposed, particularly the toes. People may choose to
wear sandals for several reasons, among them economy (sandals tend to require
less material than shoes and are usually easier to construct), comfort in warm
weather, and as a fashion choice.

4
3. RAW MATERIALS AND INPUTS DATA
3.1. Major raw materials for leather foot ware
- Upper leather
- Lining
- Sole (It vary according to the shoe type)

3.2. Accessories materials

- Textile - Zelebet
- Brush for p.u
- Counter
- Insole board
- Nails and tack
- Needle
- Nylon thread 40
- Nylon thread 60
- Primer sole cleaner
- Roughing ring
- Zipper
- Moccasin thread
- Rivet, metal trim /Ornament
- Eyelet
- Foam
- Shoe lace
- Silver/refill
- Steal shank
- Shank board
- Toe puff
- Toe steel for safety shoe
- EVA sheet
- Adhesives and glue
- Shoe polish/Cream
- Eroder

5
 3.3. Packaging material
- Shoe box
- Poly bag
- Tissue paper
- Plaster
- Carton box
Remark: Tissue paper and Poly bag are alternative packaging materials rather not used
simultaneously.
 3.4. Supply, source and demand of major Raw material

3.4.1. Source of raw material

Table 3.1: Source of raw material

Description Source
Upper leather Local
Lining Local
Sole Local/import
Textile Local/import
Sole safety Import
Top stele Import
Brush for p.u Import
Counter Import
Zipper Local/import
Insole Import
Nails Local
Nylon thread 40 Import
Nylon thread 60 Import
Moccasin thread Local
Primer sole cleaner Import
Rivet, metal trim /Ornament Local/Import
Roughing ring Import
Shoe lace Local/ Import
Silver/refill Import
Steal shank Local/Import
Top puff Local/Import
EVA sheet Local
Adhesives and glue Local /Import
Shoe polish Import
Foam Local
Packaging material
Shoe box Local/Import
Poly bag Local
Plaster Local
Carton box Local
Tissue paper Import
Source: Filed survey

7
 3.5. Supply of major raw material

3.5.1. Domestic Supply of major raw material

Table 3.2: Production trend of leather upper and lining and sole

Description Unit 2012 2013 2014 2015 2016

Leather upper and ('000 Sq. 6,436 34,424 29,812 15,377 12,644
lining Meter)
Leather Sole Pair 102,111 21,499 7,417,057 365,893 809,536
Source: CSA, Large and Medium Scale Manufacturing Reports

3.5.2. Import of major raw material

Table 3.3 : Imported quantity of sole and leather

Product HS code Quantit 2013 2014 2015 2016 2017
y
Sole 64062000 Pair 370,425 4,463,735 5,300,083 5,569,487 9,768,099
Leather 4113 Ton 0.22 26.52 0.12 0.35 26.84
Source: ERCA, Import Data

3.6. Demand for raw material

3.6.1. Demand for Leather

The demand finished leather arises from both local and foreign market. The major demanders of
finished leather in the domestic markets are leather products producing industries i.e., existing
leather footwear, leather garment, leather belts & bags, and other leather goods using leather. In the
following two consecutive Tables (3.3 and 3.4), historical production data, which could demand
leather as major raw material over the past five years, and operational leather foot wear producing
firms with their respective performance tabulated.

8
Table 3.4: Production performance of end-users that consumes leather (2012-2016)

Description Unit 2012 2013 2014 2015 2016

Leather garment ('000 Sqr. Ft) 33,141 81,325 84,232 21,10 8,404

Leather Shoes and Pairs 1,966,008 2,473,274 3,371,753 4,610,435 38,789,331

Boots
Source: CSA, Large and Medium Scale Manufacturing Reports

Table 3.5: List of operational leather foot wear producing firms and their respective
performance

Sr. Production capacity in Actual Production in Pair

Name of Footwear Companies
No. pair (Yearly in 280days) (Yearly in 280days)
1 Anbessa Shoe Sh. Co 840,000.00 660,000.00
2 Bostex Shoe Factory 70,000.00 70,000.00
3 OK Jamaica 224,000.00 46,200.00
4 Kangaro Shoe Factory 280,000.00 126,000.00
5 Peacoke Shoe (Dire Industries PLC) 560,000.00 420,000.00
6 Ramsay Shoe Factory 560,000.00 79,200.00
7 RasDashen Shoe PLC 336,000.00 308,000.00
8 Sheba Leather Industry PLC 280,000.00 120,000.00
9 TikurAbay Shoe Share 1,176,000.00 523,360.00
10 Wallia Leather and Leather Products 280,000.00 32,660.00
11 Modern Zege leather product 224,000.00 8,366.00
12 Ethio Footwear Cluster
Park shoe & Leather Production
13 Factory
14 Fotaneya Shoe 420,000.00 79,200.00
15 Jorge Shoe Factory 1,120,000.00 381,272.00
16 Huajian International Shoe City PLC 1,960,000.00 1,353,840.00
17 New wing – Addis Shoe factory PLC 1,120,000.00 276,360.00
18 Oliberte 28,000.00 28,000.00
19 Mohan.PLC 1,120,000.00 456,000.00
20 Youbang Manufacturing of shoes PLC
21 ISLEX PLC
Duka- Clarks shoe and leather
22 products

Source: Ethiopian Leather Development Institute

NB: For those firms listed above but not having full-fledged data are due to lack of complete
registration from the concerned institute, i.e., ELDI.

9
 - Multiplier

A pair of shoes requires 3.5 square feet of finished leather (2 square feet for leather upper and 1.5
square feet for lining) and the average amount of wastage during cutting of pattern for all finished
leather producer industries (leather footwear, leather garment and leather goods) is around 15 % of
the total finished leather (Source: Previous leather foot wear commodity study, 2011).

3.7. Export raw material

Table 3. 6: Export of leather and sole (2012-2016)

Description Unit 2012 2013 2014 2015 2016

Leather kg 1,177,664 1,864,063 1,624,630 1,104,145 1,104,918
Sole kg 57,785 29,904 52,272 47,965 2,214

Source: ERCA

3.8. Market Arrangement of Chemical and Input Used

The market arrangements follow these paths: some inputs are purchased from local market
exclusively and while others are purchased from international market through agreement or
negotiation with the global supplying companies. For international purchasing process, there
are several procedures from opening of LC (Letter of Credit) to post clearing up on the
delivery of ordered goods. The supplier of goods held on CIF ( Cost insurance and Freight)
and the purchaser is entitled to cover all land insurance, VAT (Value added tax), warehouse
fee, in land transportation cost, transit charge and custom clearing, post clearing charge, service
charge and other cost which cover from port to the factory gate.

3.9. Raw material price

Current selling price of raw material stipulated on the parameter of this document though
historical trend was not obtained during data collection.

10
4. FOOTWEAR PRODUCTION AND TECHNOLOGY SELECTION
Before directly go through the production process of footwear it is essential to discuss about
the component parts (Anatomy) of shoes.

The footwear can be manufactured by a number of parts and components, but every time we
can differentiate these functions into two parts:-

 Shoe uppers (upper parts and components)

 Shoe bottoms (bottom parts and components)

A shoe consists of sole, insole, outsole, midsole, heel, and vamp (upper). They are the basic
parts of a shoe that are mostly included in all types of shoes. Other parts of a shoe are lining,
tongue, quarter, welt and backstay. These parts are included as per the design of the shoes.

i. Sole: The exterior bottom part of a shoe is the sole.

ii. Insole: The interior bottom of a shoe, which sits directly beneath the foot, is its insole.
They can be removable and replaceable too. In some of the shoes, extra insoles are
often added for comfort, health or other reasons, such as to control the shape, moisture,
or smell of the shoe.
iii. Midsole: The layer that lies between the sole and the insole for shock absorption is the
midsole. Some special shoes, like running shoes have other materials for shock
absorption, that usually lie beneath the heel where one puts the most pressure down.
Materials used for midsoles depend on the shoe manufacturers. Some shoes can be
made even without a midsole.
iv. Heel: The rear part at the bottom of a shoe is the heel. It supports the heels of the feet.
Heels of a shoe are often made from the same material as the sole of the shoe. It can be
high for fashion purpose or for making a person look taller. They are also flat for
comfort and practical use.
v. Shank - part of sole under arch of foot
vi. Vamp or upper: The upper part of a shoe that helps in holding the shoe onto the foot is
the vamp or simply called the upper. This part is often embellished or given different
styles to make shoes attractive. Various visible parts of upper (and also on the upper)
are:

11
The Quarter - member of the 'back part' of the shoe, horseshoe shaped piece of leather,
cradles heel of foot
Tongue - leather flat under laces
Vamp - technically whole forepart of shoe upper, but more commonly top surface of
the ball
Toe Cap - reinforcement piece over toe of shoe
Counter - reinforcement for back of shoe, stiffened fiber material, shaped to contour to
sides and back of heel, helps to keep the shape of the shoe
Sock Lining - covering all or part of the top surface of the insole

Figure 1: Anatomy of a shoe

Figure 4.1: Exploded View of a shoe

12
 4.1. Production Process of leather Shoe
In footwear manufacturing industries it is common to see the following tasks besides the major
activities.

I. Product Development

The development is the process of designing new styles of shoes or adapting existing or
previous ones and then specifying the materials and components, detailing the materials and
processes to be followed in order that the styles of shoes can be produced in bulk and then
satisfies the needs of consumer when purchased.

II. Designing & Pattern Cutting

According to the samples of shoes, design or requirement of the customer the model last is
selected by the shoe designers then patterns are developed and sample shoe is manufactured in
the sampling room under the supervision of the shoe designer by the craftsmen/artisan. When
the samples are approved by the buyer/customer the patterns are graded by hand or machines in
required sizes and handed over to the production division for manufacturing the shoes. The
designers also specify the materials required for making the shoes.

For shoe making there are different types of constructions methods. Here are the most usable
constructions for different type of shoe which are to be selected by the designer.

 Cemented construction: In this process the upper is attached to the insole by cement,
the lasting margin is roughened. The sole is attached with lasted upper by means of
adhesive. The result is the permanent bond between three elements (upper, insole, sole).
There is no stitch. Many women and children shoes along with a large number of
men’s dress and casual type of shoes are made in this process.
 Moccasin Construction: A moccasin construction produces a very light, flexible and
comfortable shoe with a distinctive appearance. A bag of leather is formed by hand
stitching an apron to a vamp. This bag is dampened and then forced on to the last to
form the shape of the shoe. The sole is then stitched or glued to the formed upper part.
Because the soft leather upper goes right around the foot, forming a flexible and
adaptable 'bag', a moccasin is exceptionally comfortable.

13
 McKay stitch (Machine sewn) construction: This is a direct method of attachment of
sole to the upper by stitching. After flat lasting as for cemented, the sole is temporarily
attached by adhesive, the last is slipped and the sole is stitched to the upper through the
insole forming a series of loops. The chain stitches are hidden in the groves of the sole.
 Stitch down construction: This is the only one construction where the lasting
allowance is turned outwards. The insole is larger than the last. The upper outside
curved edge is cement lasted to the insole. In some cases a thin micro cellular mid sole
is also temporarily cemented with the insole. The sole itself is also cemented and all the
elements are bound together by stitching. The excess material from the side to be cut
before trimming.
 Goodyear welt construction: This is an indirect method of attachment of sole, upper
and welt. One of the major characteristics of this process is the use of an insole with an
upstanding wall or rib. First the rib of the insole, the upper and the welt are sewn
together. Then the sole and the welt are stitched together. The process is mainly used
for men’s dress shoes and in industrial footwear.
 DIP (Direct injection molding process): In this process either sock lasted or string
lasted upper is pressed to a sole shaped mould. The PVC sole compound is injected and
it forms a permanent bond with the upper.
 DVP (Direct vulcanizing process: In this process the sock or string lasted upper along
with rubber soling material and in some cases rubber foxing is pressed at about 160
degree centigrade and at 3kg/cm2 pressure. The rubber becomes vulcanized within 2.5
to 3 minutes.

14
 4.2. Production process flow chart

Upper cutting Pre-fabrication Sewing

Lasting
Sole making Sole finishing

Finishing and packing

Note: Sole making may not be required for all footwear manufacturing firms. The sole can be
brought from other source; accordingly it is considered as raw material.

Upper Cutting & Prefabrication:

First step in making shoe is to cut the upper material into shoe components as per the required
style. There the cutter places the material on the clicking machine and cut it with the help of
cutting die /knife to achieve the following objectives.

 To cut the material into component as per plan, style and size assortment within the
stipulated time.
 To ensure the best utilization of the material.
 To ensure the right quality of the component in the most efficient manner.
The method of cutting “uppers” from a leather is a great importance, and is necessary for cutter
to know the structure of the skin. The cutter must know which parts of the skin have better
physical properties, the direction of the stretch and the nature and origin of the various
defects. A good cutter will always be cost minded and get maximum utilization from a skin. A
good cutter must know how to use to the maximum the various parts of the leather.

Knives: The knives are manufactured from steel. Double edge cutting knives are in use
wherever possible; this minimizes the number of knives required, so reducing cost.

15
Cutting Block/Board : The blocks on which leathers cut are made of poly propylene or
phenolic resin block, the cutter should always use the entire surface area of the block to wear it
uniformly, this saves knives and improves cutting quality.

Machine: Basically two types of cutting machines are in use

1. Swinging head cutting machine

2. Beam head cutting machine
a. Fixed beam head
b. Travelling beam head

Normally the swinging head cutting machines are used for cutting leather and Beam head
cutting machines are used for cutting synthetics and Fabric.
Prefabrication:

Shoe components particularly shoe uppers, must be prepared for the sewing together of the
component pieces. Although the operations performed varies from style to style, some of the
process are

1. Splitting to bring components to desired even thickness as per the requirement of style.
2. Lamination for reinforcing certain parts of the upper to give strength and comfort.
3. Embossing any decorative design, punching etc.
4. Re-cutting.
5. Skiving
6. Stamping or Printing.
7. Cementing of socks etc.

Because of the number of processes involved in prefabrication it is important that there is as

little handling between feeding and collecting the shoe components as possible. The quality of
the prefabrication process can impact the quality of later processes.

After completion of all the operations in the cutting & prefabrication, each and every
component are checked pair by pair, put in poly bag and store in the cutting dept. for delivery.
In case of non conformity, respective components are replaced.

16
 4.3. Machineries and equipments
* The apprising unit should give critical focuses on the promoter needs; machineries and
equipment that have been stated in the Serial Number 6& 7 on the beneath Table are whether
or not be required; they can be brought from other source.

Table 4. 1: List of Machinery and Equipment

No. Major machinery Equipment Purpose

1 Pattern-making and cutting
machinery
1.1 CAD Systems 2D-3D CAD design software with different levels of operation to the
definition of the style lines, rapid prototyping model, series’ grading,
production management, etc…
1.2 Hand-operated cutters Manually operated machine to cut, skiving, trim and operate on
pattern templates
1.3 Pantographs Mechanical device to trace and to draw a shape in a different scale,
following its lines
1.4 Shoe last thermoforming machines (if any) Thermo-molding machine to get last shells to draw footwear/upper
patterns
1.5 Leather area measuring machines The machine running the electronic measurement of the surface of
skin or cut parts
1.6 Die-cutting presses Hydraulic presses to cut leather, sole leather and other materials, by
means of dies, kinds of performed tools
1.7 Numeric control die-less cutting systems Cutting system for leather in rolls or sheets by means of oscillating
knife, said vibrating blade mounted on a movable head by means of a
bridge arm
1.8 Strip cutters Machines for cutting leather strips
2 Upper preparation and stitching Machines and equipment used in the preparation of shoe-pattern and
Machinery in leather, linings and fabrics cutting
2.1 Splitting machines Machines that equalize the thickness of the shoe upper leathers
removing material from the flesh side
2.2 Stamping machines Machine used to stamp the identification of shoe upper parts
2.3 Skiving machines Machine which reduces the thickness of the leather on the parts that
constitute the shoe upper in accordance to the requirements of the
shoe model
2.4 Upper reinforcements applying machines Machine configuration with rotary plate, book-closure plates hinged
or pressure roller for hot assembling of reinforcements of various
types and material to the upper
2.5 Edge taping machines Several configurations available, of this type of machine that applies
self-adhesive reinforcement tapes on the edge of shoe uppers or on
portions of shoe uppers
2.6 Vamp crimping machines Crimping and shaping machine suitable for single-piece bootlegs

17
2.7 Plating and printing machines Machine equipped with work table and striking plate with matrix on
which is printed the design to be realized. Performs effects of plating,
embossing and also drilling and shearing
Machine that realizes a series of aligned holes along the edges or in
2.8 array in the middle of the parts that make up the shoe upper
Punching machines
2.9 Edge folding machines Machine that folds the edge -already skived- parts of the shoe upper,
using thermoplastic adhesive and operating cutting measures along
concave and convex curves
2.10 Toe cap attaching machines Machines in versions from simple irons, to flat or roller presses for
applying cold/hot reinforcements on the shoe upper
2.11 Lining-upper cementing machines Machines and equipment for gluing on reinforcements and parts of
shoe uppers and lining
2.12 Pleating machines Machine running straight or curved pleats to create patterns of
decoration of uppers for footwear, parts and components
2.13 Flat-bed sewing machines Sewing unit including supporting surface for the material. The unit
can perform several stitch types (knotted, single or double chain stitch,
overcast, zig-zag), different types of sewing (one needle, two needles,
straight, zig-zag) and with different transport systems (feed dogs, feed
dog and needle, needle and feed dog-legs, others)
2.14 Arm-type sewing machines Stitching unit with arm type counter top for the material. The unit can
perform several stitch types (knotted, single or double chain stitch,
overcast, zig-zag), different types of sewing (one needle, two needles,
straight, zig-zag) and with different transport systems (feed dogs, feed
dog and needle, needle and feed dog-legs, others)
2.15 Post-bed sewing machines Stitching system with support for the material column type. May run
several different stitch type (knotted, single or double chain, overcast,
zig-zag), different type of sewing (one needle, two needles, straight,
zigzag) and different material feed system (simple with a feed dog
mechanism; feed dog and needle feed; feed dog plus needle feed plus
alternating presser feet; upper differential; others).
2.16 Moccasin type sewing machines Sewing unit equipped with special stitching heads and templates. In
the versions with overcast lockstitch and curved needle can carry out
various types of seams.
2.17 Seam beating of upper stitching Machine equipped with a long anvil support with a working plate,
particularly suitable to beat and iron upper and boot seams
2.18 Seam pressing and tape applying machines The machine presses the seam by two pressing rollers and
simultaneously applies a reinforcement tape of various widths on the
seam
2.19 Upper lining trimming machines Machine equipped with a knife blade which oscillates and counter
blade feeding device, suitable for trimming the linings of the uppers
2.20 Strobel insole applying machines Solid frame structure machine for chain stitching joining the lower
edge of the upper with insole ("slip-lasting" method)
Machine with pressure matrix for the application of eyelets, rivets,
nail heads, hooks, rings, vis. Ranges from fully manual handling up to
Eyelets, rivets, hooks, rings, vis applying the automatic feeder of small parts system and automatic material

18
2.21 machines feeder to measured steps
2.22 Automatic programmable machines to Numerical control machines that realize ornamental drawings by
realize ornaments by small parts vectorial files. They are equipped with one or more application heads,
in order to apply various metal decorations like nail heads, eyelets,
and rivets. The leather is fixed on templates specially prepared;
completely automated

2.23 Laser systems The laser systems for the leather use a CO2 source; the power can be
normally between 50 and 500 Watt. They are usually equipped with
special software able to use vector files, and check the many
processing parameters: power, speed, frequency.

2.24 Vamp pre-forming machines Pressing machine equipped with suitable shaped mould in hot station
and, if present, cold station. It can give a bend on the front part of the
flat upper such as to make it adhere easily to the last model
2.25 Upper lacing machines Machine where the uppers with eyelets are laced up to a
predetermined distance. Knots and thread trimming are done
automatically.
2.26 Boot turning-out machines Pneumatic machine that overturn the uppers of boots. Configurable for
every leg height of boot
3 Shoe lasting machinery
3.1 Insole applying machines The machine allows the insole fixing to the last by nail, hook, glue or
sticky tape
3.2 Insole trimming machines Machine with rotating blade and counter blade for trimming the insole
along the edge of the last
3.3 Back part molding machines Defined "upper stiffener shaping" machine, it serves to pre-shape the
material used for the reinforcement and to form a single entity of
lining, stiffener and right upper side
3.4 Toe upper forming machines Machine for shaping the toe upper; it consists of a heated station for
the reactivation of the toe cup and of a station with aluminum last for
shaping the toe of the upper
3.5 Upper edge roughing machines Using roughing wheel, the machine removes the material in excess
from the shoe upper (lining and toe cap); it levels them for facilitate
the subsequent gluing operation during shoe lasting
3.6 Moccasin ironing machines Machine equipped with aluminum last or series of lasts, on which is
inserted the shoe upper of the sewn moccasin for the lastingly
stabilized them in the shape position. The last may be heated or
provided with holes for the steam. Configurations from the simple
position to the rotary; supplied with beater hammers.
3.7 Machines for humidifying upper and/or its Moistening chamber for the leather shoe uppers, involving both the
parts external and the internal parts; lining and other part will be
maintaining dry. This machine provides a fundamental contribution in
softness to avoid breakage or modification of the leather during
pulling over operations. Static or conveyor version.
It provides the shoe upper lasting, particularly focused on the front
part of the shoe up to the last waist. The glue is applied by fixed
3.8 Pulling-over and lasting machines injectors or moving nozzle or their combined action. A series of
adjustable clamps maintains a perfect pulling and positioning of the
upper on the insole. The operating cycle operating is completed by

19
 two plates that fold down the upper edge to the glued insole.
3.9 Machines to fix the uppers to the last Nailing for fastening the upper to the last in the line of junction of the
rear part of upper closing stitching, in order to not damage or
perforating the shoe upper. The nail is extracted after shoe lasting.
3.10 Waist lasting machines This machine is designed for lasting the shoe sides with manual
control operation. Versions with glue, nails and nails with
thermoplastic.
3.11 Heel seat lasting machines Machine finalized to lasting the insole and upper in the area of heel
seat by nails and/or glue.
3.12 Side and heel seat lasting machines Sequential lasting machine of the shoe sides and the heel seat of insole
and upper. It performs this operation through clamps, moving pressure
pads, injection glue nozzle and/or application of nails.

3.13 Lasted shoe pounding machines The machine smoothes and flattens the bottom of the shoe after
assembly to facilitate the join/match of sole. Provide also the edge last
leveling recovery. Solutions from manual version that is working
through hard pounding roller to the automated tools that are managed
through PLC control.
3.14 Ironing and stabilizing heat setters Multifunction climatic chamber for lasted shoe treatments such as
humidification and heating in order to reduce the various tension
forces that are generated by the materials, particularly leathers. It irons
and stabilizes the shoe adapting perfectly to the last.
3.15 Ironing machines with hot hair and roller Machine equipped with a heated cylinder, that in combination with
hot air and/or steam flow, is suitable to eliminate folds and creases
remain on the upper leather.
4 Lasted shoe bottom working
machinery
4.1 Lasted shoe roughing machines The machine performs the roughing of the lasted shoe, works with a
circular steel brush, that is set in order to work tangentially to the
lasting surface
4.2 Sole roughing machines Roughing machine for soles in different materials and shapes. The
sole must be sustained and pushed against the tool with a little
pressure by the worker and it must be also guided during the work.
4.3 Lasted shoe-sole cementing systems Range of machines and equipment for the cement application on the
shoes bottom and on the sole before their final assembling. Technical
solutions with spray nozzle, rotating brush and roller. Manual control
and management.
4.4 Multifunction machines for lasted shoe Machine equipped with programmable axis, making scouring,
pounding, roughing cycles on the bottom already assembled
depending on the tools installed.
4.5 Dryer re-activators Machine for drying and reactivate the cement by means of heating, in
versions hot air and infrared. Static and tunnel configuration.
4.6 Sole attaching presses After cement deposition and reactivation, the shoe lasted and the sole
and holding in position using dedicated press systems
Cooling machine to stabilize lasted shoes after the sole application.
Cell static and conveyor belt configuration with functions controlled
4.7 Chill setters by microprocessor.
4.8 Brushing machines for glue removing along This machine, through a rotating brush, allows removing the excess of
the edge last cement on the edge of the shoe and providing the right cleaning of the

20
 shoe even in the most difficult points
4.9 Heel seat pounding machines Machines that provide leveling and edging heel seat using tools such
as plat and roller
4.10 Fitting heel beating machines Hammer swing machine that levels the line of heel-seat to the heel
already assembled on the footwear
4.11 Last pulling machines Equipment based on locking pin and cushion pads for extracting last
from footwear

4.12 Blake sole sewing machines Strong frame sewing machines make Blake stitching, inside the lasted
shoe, in order to ensure the direct cohesion between the upper, insole
and sole
4.13 Wall sole sewing machines Sewing machines to perform the side stitching between upper and
sole, inside the lasted shoes, wall sole (opanka) shoes
4.14 Sole sewing machines curved needle Sewing machines in various configuration to perform interventions on
lasted shoe in order to ensure the direct cohesion between the upper
and/or insole and/or sole with the possibility to simultaneously apply
the welt. According to the configuration the shoe assembling is rapid,
good year, ideal, san crispino.
4.15 Goodyear processing machines Range of specific machines for good year shoe assembly. They
include: rib-tape applying, staple side lasting, upper trimming, welt
stitching, welt beating and stretching, refresir trimming, heel welt
stitching machines.
4.16 Heel prefixing - nailing machines Presses that through the insertion of screws or nails secure the heel to
the assembled sole. According on the type of footwear and its quality,
this operation required a pre-fixing and/or permanent fixing.
4.17 Shoe quarter reforming machines The machine reforms the quarter, giving evidence to its shape. In this
working the quarter is first reactivated by means of a special heated
mould, and then it undergoes a cold stabilization.
4.18 Re-lasting machines It is able to re-last tubular moccasin uppers or shoe lasted without
physical stress for the operator.
4.19 Channeling machine Range of machines suitable to perform the channel (engraving which
forms a lip) on the lasted sole; open or close the channel lips and in
meantime trimming and/or creating a small channel to perform the
bottom stitching.

4.20 Trimming machine Machine with rotary axis equipped with tool cutter for milling or
cutting the bottom of the shoe lasted; useful for reduce the
imperfections of the sole and heel profile
4.21 Band scouring machines Machine equipped with an abrasive paper band stretched among two
wheels; designed to remove surface layer from the semifinished
product. Useful for finishing and shoe lasted bottom processing.
4.22 Heel top piece attaching presses Machine used to secure the top piece to the heel by pressure, in order
to protect the heel from contact with the floor. A very abrasion
resistant material.
5 Finishing machinery Machinery and equipment to clean and polish shoes before packing
and packaging

21
5.1 Ironing machines Equipment for ironing through heated iron tools with special shape;
one or two working position.

5.2 Brushing machines Machine equipped with rotating brushes of several types, suitable to
remove dust, apply wax and polish the skins and leather
5.3 Stamping machines Range of machines for stamping. Cold systems with gold ribbon and
electronic equipment. Hot systems for printing trademark or
alphanumeric on lining, shoes, uppers, with electronic programmer.
5.4 Seam beating and ironing machines Machine is particularly suitable to beat and iron the stitching and close
the cut of the lining after trimming on finished shoe.

5.5 Sock’s cementing machines Machine equipped with two rollers that provides convergent
movement for the application of adhesive along one side of the
anatomical or comfortable insole before its insertion
6 Components preparation machinery Systems and machines for producing and manufacturing the
(if any)* components used in the footwear production cycle (shape, die) and the
components that are part of the shoe (toe puff, stiffener, insole, heel,
sole, welt, strips, small metal parts, etc.)
6.1 Skiving or beveling machines for toe caps Machine which reduces the thickness of the toe puff edges in
accordance with the design requirements of the shoe model
6.2 Stiffeners production machine Machine series for the manufacture of stiffeners. These include:
multiple machine for skiving, pebbling and stamping; stiffener rolling
machine; pre-preforming and preforming; gluing, drying and packing
line.
6.3 Insoles CAD-CAM systems Insole CAD design software with different functions according to the
defining of the lines, virtual prototyping, series development, and
MIS, etc..
6.4 Insoles cutting machines Cutting systems press with die or oscillating knife; the first also
available to perform automatic sheet loading, alignment and feeding.

6.5 Skiving machines for fiberboard heel socks Machine with automatic cycle that performs the removal of material
by operating with rollers arrays that reproduce exactly the surface you
want to achieve with the required thicknesses in different zones.
6.6 Metal shanks applying machines Continuous charger of the heel-sock and the metal shank and their
assembly through tips self-riveting “braces” or one or two eyelet
rivets.
6.7 Insoles pre-forming presses Press for insole shaping. Configurations: manual and automatic
feeding and unloading. It is equipped with a mold which has the basic
geometry of the bottom of the model last.

22
6.8 Injected shank to insole systems Automatic line for the insole cutting and section splitting till
established measures. Then a rotary injection machine does a injected
plastic shank welded to insole.

6.9 Heel CAD-CAM systems Heels CAD design software 2D-3D with different functions according
to the defining of the lines, virtual prototyping, series development,
and MIS, etc..
6.10 Injected heels systems Moulding machine for ABS (Acrylonitrile-Butadiene-Styrene) heels
using moulds in which is inserted a shape cut “band” in order to heel
covering before injection, further metal insert can be applied for the
realization of stiletto heels.
6.11 Heels processing machines Machines for manufacturing traditional heels: two rollers cementer for
lifts; assembling press for lifts, toplift application; milling machines,
heel abutting, hollowing machine, etc..
6.12 Sole CAD-CAM systems Sole CAD design software with different functions according to the
defining of the lines, virtual prototyping, series development, and
MIS, etc..
6.13 Sole processing (common working) Set of machines, such as: scouring-buffing machine for soles on grain
side; flesh side scouring machine; stamping, numbering and marking
machine with automatic feeder and collector; sole edge pre-trimming
and trimming machine; sole cleaning-polishing machine; sprayer and
marking sole decorations press; dryers; equipment for execution
channel, grooves, ornaments, trimming cutter for soles with inserts;
dyeing edge machine. Process leather unit, synthetic, EVA unit sole.
6.14 Prefinished soles processing machines Set of machines specific to the soles called "pre-finished" mainly used
for men classic shoes or women low-heel shoes. They include:
equipment for channeling, grooves, ornaments execution; sole and
welt cementing systems; welt attaching; welt chamfering and pressing
machine.
6.15 Wall soles processing machines Set of machines specific to wall soles (“box”, opanka), mainly used
for shoes where the sole is integrated to the line of the upper. They
include: edge growing, Jourdan skiving and shaping; edge setting;
presses for shaping and skiving reducing machines.
6.16 Trimming machines to copy and groove Milling machine for EVA, micro-porous rubber, cork and imitation
soles leather (SALPA) or masonite wedges. The milling operation is
performed by copying from a tamplate (shape), the exact shape of the
sole to be obtained. Can processing on different layers/components of
the sole which are then bonded together.
6.17 Welt processing machines Traditional or automatic system for the leather, leather board,
synthetic welts manufacture. Machines for bands preparation; strip
cutting and winding on spools; channel execution and opening;
cement coating; channel attachment of filling and closing; stitch
marking; painting; groove for Goodyear sewing; grooving turning;
seaming; slotting with zig-zag welt cutting; roughing lower base.

23
6.18 Welt attaching machines to sole Systems to spread adhesive on soles and welt and their joining, welt
chamfering and pressing.

6.19 Strips, edges, mignon machines Range of machine to process and prepare strips, edgings, mignon such
as strip cutters, cementing, seam presses, skiving, forming, winding
spooling, plaiting machines, etc.
6.20 Die-cutter processing machines Range of machines to implement the cutting steel dies. There are
shearing, bending, punching, abutting, broaching, grinding, welding
machines, etc.
6.21 Metal small ware machines Plants to produce small metal alloy of zinc or tin by centrifugal
casting. It involves the use of silicone rubber for the preparation of
molds, as negative counter form obtained from the original positive, to
be filled subsequently by casting, using some materials such as white
metal alloys, low melting point, or the resins (epoxy, polyurethane or
polyester), gypsum, etc.. The plant performs the realization of buckles,
jewels, buttons and fashion accessories.
6.22 Last CAD-CAM systems

Last CAD design software 2D-3D with different levels of

functionality to the definition of the style lines, virtual prototyping
model, series development, production management, etc.

6.23 Last digitizers High precision equipment that automatically provides a high number
of points in volumetric structure of the last in order to have its virtual
image. Mechanical type, luminous technology, etc.
6.24 Last production machines Machines for last production from rough shape molding to first and
finishing roughing and joint insertion.
7 Synthetic machinery and moulds (if Machines and plants for the production of shoe parts and soles
any) * through injection or pouring of synthetic materials into suitable
moulds.
7.1 Thermoplastic injection machines

Plant in which the plastic material is melted and injected into a mould
made according to the negative to be produced. It consists of an
injection unit and a clamping unit. The injection unit has the task of
heating, and then laminating the material and pushes it inside the
mould, thanks to the action of a piston or a screw; while the closure
unit has the task of keeping the mould closed.
7.2 EVA injection machines EVA (Ethyl Vinyl Acetate) injection machine into a mould. The
material expansion takes place during the the mould phase. For this
reason the mould cavities are smaller than the final dimensions of the
product.
7.3 Rubber injection machines Process for direct moulding vulcanized rubber by injecting-pouring
while the mould is closed for outsole inserts production or injection of
rubber soles onto uppers.

24
7.4 PU injection machines System for processing polyurethane by injection. The polyol and
isocyanate are mixed by the injection screw before being pushed
inside the mould. Can be adopted for the direct injection of soles on
the upper.
7.5 PU pouring machines System for processing polyurethane by pouring. The material flows
down from the pouring head that is moved up the mould.
7.6 Injected sole automatic trimming Robot for trimming the edge of the injected soles.
7.7 PU soles washing Washing system for footwear soles made of PU, EVA and rubber
before glueing or dye finishing.
Specially designed block composed of two or more half-shells, which
go to delimit an area of space with the outline of the piece to be
7.8 Moulds obtained by injection or pouring.

8 Managing handling and engineering Handling and logistics in the factory. Suppliers of engineering in order
to design and build industrial plants.
8.1 Production management software’s Managing Information System (MIS) and/or remote control electronic
devices for the entire shoe-making process or for specific production
departments.
8.2 Shoe upper conveyor-systems Electro-mechanical-conveyor equipped with trolleys or conveyor belt
type, available with management computerized system, for handling
semi-finished goods within the shoe upper closing department.
8.3 Lasting department conveyor-systems Manual or mechanic conveyor system based on trolley that can
transfer the semi-finished products sequentially along the assembly
shoe department. Configurations with click-stop and continuous
movement.
9 Shoe repairing machinery Range of machinery and equipment generally used by cobblers to
repair shoes, brush and manually replace damaged parts.
9.1 Arm-type sewing machines for repairers Arm sewing machine for shoe repairers. With long arm and presser
foot conveyor with rotation of 360 degree it allows to catch up in the
more difficult points to sew.

9.2 Soles and heels attaching presses Press that, by means of gas or liquid pressurized bearings, can support
the sole or heel application.

9.3 Benches with activating oven and exhauster Simple equipment with oven tunnel for cement activation, supply by
fume aspirator system.
9.4 Finishing combined machines Machine with a tools assembly suitable for scouring, polishing,
trimming, and equipped with abrasive wheel and etc. Customized for
shoe repair and orthopedic shoe production.

9.5 Shoe brushing machines for public Machine equipped with brush wheels for shoe polishing and brushing.
applications Self-operated by utilizers wearing shoes; it is designed for public areas
such as hotel, malls, etc.
10 Equipment and accessories Machines for laboratory tests, tools and devices as support of the
machines operating in the shoe manufacturing
10.1 Laboratory test equipments Machinery and equipment for quality control laboratory (physical and
chemical test) of shoes and their components.

25
10.2 Boards for die-cutting Plate used as support for the material being cut by mechanical
pressing of the die. The various resistances or hardness is related to
the material which is composed the object. Widely made by nylon.
10.3 Blades and knives Metal tools with a sharp edge for cutting. Manual working tool used in
splitting machines, skiving, cutting tables, etc..
10.4 Tools, cutters and punches Tools with a rotating surface equipped with multiple cutting edges.
10.5 Needles Small steel tools in a cylindrical shape with a pointed end and the
other side with an oval hole in which one passes the thread for sewing.
10.6 Nails and tacks Metal rods small size, pointed at one end and with wide range of flat
head in the other side. Used to fix provisional or final way the parts
those are utilized for leather article.
10.8 Pre-forming moulds Moulds for shaping insoles, counters, soles in different materials and
types.
10.9 Compressor To supply compressed air for the machine
10.10 Generator To supply electric power when power is interrupted

26
5. MARKET STUDY RAW DATA
5.1. Market Segmentation
The market for the envisaged products (leather foot wears) can be segmented by destination as

 Foreign market and

 Domestic market.
There is an export pragmatic experience of leather shoe from Ethiopia being competent in the
international market.

5.2. World market

5.2.1. World production of leather footwear

The World Footwear Yearbook offers a comprehensive picture of the footwear industry
worldwide, focusing on the main trends at international trade, consumption and production.
Global information is enriched by dozens of individual country profiles, with 79 territories
under analysis.

According to the World Footwear in 2015, the worldwide production of footwear reached at 23
billion pairs, a slight decrease of 0.4% from the previous year. Apart from a decrease registered
in 2009, during the financial crisis, this is the first time in decades that footwear production
level decline.

At continental level, the geographical structure of the industry remains broadly unchanged
from previous years. With 87% of world aggregate production, Asia is the hub of the footwear
industry, with 7 out of the 10 main footwear producers.

At country level, China is the indisputable leader, producing almost 6 out of every 10 pairs of
shoes sold in the world. China’s share in the world production has increased in a sustained way
in the last few decades, and has peaked in 2013. However, in the last 2 years, the country has
lost quota in the world production and is back to the share levels of 2010.

Asia continues to increase its lead as the largest footwear-consuming continent, as its share of
consumption (53%) matches its share of the world population (60%). At country level, China is
the largest footwear market, buying almost one out of every five pairs of shoes sold worldwide.

27
China has led the shoe manufacturing business for many years now, and remains to do so with
its 12.6 billion pairs of shoes produced annually today. Its total annual production is huge
compared to the total production of some groups of exporters in other countries. A large
domestic market, minimum wage increases and overtime pay throughout China (which give
domestic consumers more discretionary income), and a stronger currency all help in
maintaining such a huge output.
Table 5.1: Top Ten Shoe Manufacturing Countries & their respective production

Sr. No. Country Production in pairs by year 2017

1. China 12.6 Billion
2. India 2.1 Billion
3. Brazil 895 Million
4. Vietnam 760 Million
5. Indonesia 660 Million
6. ` Pakistan 295 Million
7. Thailand 245 Million
8. Mexico 245 Million
9. Italy 205 Million
10. Turkey 195 Million
Source: worldatlas.com2017

5.2.2. World export of leather shoes

Table 5.2: Top world exporters of Footwear with outer soles of leather or composition leather and
textile

Sr. No. Exporters Imported Quantity in Pairs

2013 2014 2015 2016 2017
0 World 169 3,462 11,554 48,023 71,983
1. China 122 3,337 8,697 45,035 69,197
2. Turkey - - 2,286 1,284 2,784
3. USA - - - 31 2
4. UK - 82 27 115 -
5. Germany - 10 - -
6. India - - - 1,100 -
7. Thailand - - 544 401 -
8. UAE
Source: ITC Trade map
Hs Code: 64042000

28
 5.2.3. World Import of Leather Shoes
Table 5. 3: Top world importers of Footwear with outer soles of leather or composition leather and
textile.

Exported Quantity
Importers 2013 2014 2015 2016 2017
Sr.
Quantity UoM Quantity UoM Quantity UoM Quantity UoM Quantity UoM
No
0 World - - - - M - - - Pairs
1. USA 3,807 Tons - - 6,815,409 Pairs 5,852,533 Pairs 7,114,049 Pairs
2. Malaysia 46 Tons 293,249 Pairs 514,701 Pairs 943,684 Pairs 1,308,782 Pairs
3. Chile 389 Tons 789,860 Pairs 576,859 Pairs 860,270 Pairs 1,187,913 Pairs
4. South Africa 2,176,905 Pairs 1,582,185 Pairs 1,405,822 Pairs 910,611 Pairs 870,781 Pairs
5. Hong Kong 729 Tons 1,983,964 Pairs 1,149,740 Pairs 844,361 Pairs 678,583 Pairs
6. Canada 283 Tons 672,644 Pairs 648,163 Pairs 546,908 Pairs 491,192 Pairs
7. Australia 378,831 Pairs 299,461 Pairs 359,606 Pairs 324,311 Pairs 490,655 Pairs
8. Singapore 582 Tons 1,585,380 Pairs 164,701 Pairs 1,778,357 Pairs 350,610 Pairs
9. Nepal 4 Tons 492,591 Pairs 148,696 Pairs 253,155 Pairs 310,034 Pairs
10. Thailand 21 Tons 401,354 Pairs 54,773 Pairs 62,574 Pairs 241,189 Pairs
Source: ITC Trade map
Hs Code: 64042000

5.3. Domestic Market

Ethiopian leather shoes market source of supply constituted from both local production and
import.
5.3.1. Local Production
Table 5.4: Domestic production of leather shoes and boots

Quantity Produced in Pairs

Description
2012 2013 2014 2015 2016
Leather Shoes and Boots 1,966,008 2,473,274 3,371,753 4,610,435 38,789,331
Source: CSA, Large and Medium Scale Manufacturing Annual Reports

29
 5.3.2. Import
Table 5. 5: Imported quantity in pairs

Exporters Imported quantity and Year

2013 2014 2015 2016 2017
World 169 3,462 11,554 48,023 71,983
China 122 3,337 8,697 45,035 69,197
Turkey 2,286 1,284 2,784
United States of America 31 2
United Kingdom 82 27 115
Germany 10
India 1,100
Thailand 544 401
United Arab Emirates 37
Source: ITC Trade map
Hs Code: 64042000

 The demand for leather shoes comes from the larger population in different age groups.

Table 5. 6: Population projection

Year Total population (‘Number)

2014 87,952,991

2015 90,076,012

2016 92,206,005

2017 94,351,001
Source: Population projection of Ethiopia for all regions at wereda level from year 2014 – 2017

5.3.3. Ethiopian Export Performance

Table 5.7: Ethiopia leather footwear export performance by product type

Product type Export net weight (‘kg) and year

2013/14 2014/15 2015/16 2016/17 2017/18
Shoe 1,738,351.60 1,854,315.21 1,692,060.15 1,806,590.60 1,960,106.92
Sandal - 65,474.00 165,152.60 266,289.00 374,731.00
Traditional shoe - - - 400.00 22.00
Source: Ethiopian Leather Development Institute

30
 5.3.4. Supply side

Table 5.8: List of operational firms and their respective capacity utilization

Sr.
Production capacity in Actual Production in Pair
No. Name of Footwear Companies
pair (Yearly in 280days) (Yearly in 280days)

1 Anbessa Shoe Sh. Co 840,000.00 660,000.00

2 Bostex Shoe Factory 70,000.00 70,000.00
3 OK Jamaica 224,000.00 46,200.00
4 Kangaro Shoe Factory 280,000.00 126,000.00
5 Peacoke Shoe (Dire Industries PLC) 560,000.00 420,000.00
6 Ramsay Shoe Factory 560,000.00 79,200.00
7 RasDashen Shoe PLC 336,000.00 308,000.00
8 Sheba Leather Industry PLC 280,000.00 120,000.00
9 TikurAbay Shoe Share 1,176,000.00 523,360.00
10 Wallia Leather and Leather Products 280,000.00 32,660.00
11 Modern Zege leather product 224,000.00 8,366.00
12 Ethio Footwear Cluster
Park shoe & Leather Production
13 Factory
14 Fotaneya Shoe 420,000.00 79,200.00
15 Jorge Shoe Factory 1,120,000.00 381,272.00
16 Huajian International Shoe City PLC 1,960,000.00 1,353,840.00
17 New wing – Addis Shoe factory PLC 1,120,000.00 276,360.00
18 Oliberte 28,000.00 28,000.00
19 Mohan.PLC 1,120,000.00 456,000.00
20 Youbang Manufacturing of shoes PLC
21 ISLEX PLC
Duka- Clarks shoe and leather
22 products
Source: Ethiopian Leather Development Institute

NB: For those firms listed above but not having full-fledged data are due to lack of complete
registration from the concerned institute, i.e., ELDI.

31
 5.4. Market Arrangement and Strategy
According to the information from existing leather footwear manufacturing firms, the market
outlet of domestic market starts from show room in the factory and the factories have their own
retail shops in different market places to facilitate the channeling. Beside, the factories produce
order based different types of shoes through receiving from different government and private
organizations.

Market arrangement of foreign market is determined by the factories performance in meeting

quality assurance policy of importing countries and it is observed somewhat challenging unless
the factory full filed quality assurance and other criteria stipulated by foreign importers. As a
result, the incumbent or existing firm should be well established to meet all set criteria required
by foreign importers. In both scenarios, the transaction takes place on cash basis.

5.5. Price trend

The current average market price of leather shoes is presented under the parameter part though
historical price data in each type of shoes were not obtained.

32
6. Problems and Constraints
6.1. Problems
 Tight foreign market: the foreign market of leather shoe is occupied by limited number of
well known shoes manufacturers as a result; it is difficult to penetrate by searching foreign
market in respect to competition, brand and meeting of required buyers’ quality assurance
policy criteria.

 Shortage of quality raw materials (skin) and skilled man power in the leather sub-sector as
major raw material.

 Shortage of foreign currency for imported raw materials from abroad.

 Competition from imported products

33
7. PARAMETERS, TECHNICAL COEFFICIENTS AND ASSUMPTIONS
This part is devoted on the assessment of the coefficients and parameters, which are to be used
on the determination of costs and revenue and caution has to be there since the parameters and
coefficients are being an indicative ones where the real coefficients rely on.

7.1. Basic assumption

 Working days per annum ………….……………………………….270
 Working days per week ………………….…………………………6
 Number of shift in a day ……………………………………………1
 Working hours per shift …………………………………………….8

7.2. Revenue estimation

Table 7. 1: Current average price of the product

Sr. No. Leather Shoes type Unit Price /UoM

1. Safety shoes Pairs 1,157 birr
2. Military & workers shoes ” 451 birr
3. Sport shoes ” 971 birr
4. Football shoes ” 980 birr
5. Casual shoes
5.1. Gents ” 697 birr
5.2. Ladies ” 468 birr
5.3. Children ” 418 birr
6. Sandal shoes ” 325 birr
Source: Field Survey

34
 7.3. Conversion factor
Table 7.2 : Conversion rate of average shoes
Description GENTS LADIES CHILDREN'S
Normal Boots Moccas Sandal Norm Moccasin Half Full Normal
Shoe Shoe in Shoe s shoe al Shoe boots Boots Shoe
Shoe
Upper Leather(Sq.ft) 2.9 3.8 3.2 1 2 2.3 3.5 5 2
Lining Leather(Sq.ft) 3.1 3.3 3.1 1.75 2.25 2.5 3.75 4.5 2.1
Foam(Sq.mt) Collar 0.017 0.017 0.017 0.015 0.015 0.015 0.0099 0.015
Foam
Body 0.12 0.07
Foam
Socks 0.056 0.059 0.056 0.06 0.035 0.035 0.035 0.035 0.035
Foam
Stiffener (Counter)(Sq.mt) 0.04 0.055 0.04 0.02 0.02 0.02 0.02 0.02
Stiffener (Counter)(prs) 1 1 1 1 1 1 1 1
Toe puff (Prs) 1
Toe puff (Sq.mt) 0.03 0.035 0.026 0.026 0.02
Reinforcement 0.05 0.099 0.035 0.07 0.04 0.04 0.04 0.04 0.04
(interlining)(Sq.mt)
Shank Board(Sq.mt) 0.03 0.03 0.03 0.03 0.026 0.026 0.026 0.026 0.02
Shank steel(Prs) 1 1 1 1 1 1 1 1 1
Insole(Sq.mt) 0.056 0.059 0.056 0.06 0.045 0.045 0.045 0.045 0.036
Thread Thread(Mt) 55 70 30 40 35 45 25
(Mt) Thread 3.5 5.5 2.5 2.5
Moccasin
(Mt)
Thread no.( 35 35
13,20,40,60)
Eyelets(Pcs) 20 32 16 20 16 16 32 16
Metal trim /Ornament(Pcs) 2 2 2 8 2 2 2 2 2
Rivet (Set) 4 4 4 4 4 4 4 4
Buckle and metal ring (Pcs) 2
Straps/mignon (Mt) 0.8 0.8 0.8 0.8 0.6 0.6 0.6 0.8 0.4
Fitting and Fasteners 0.25 0.3 0.2 0.3 0.3 0.2 0.16
(Velcro)(shatter) (Mt)

35
Footwear PU 0.033 0.033 0.038 0.038 0.033 0.033 0.033 0.033 0.03
adhesive (Kg) Granule 0.001 0.007 0.001 0.001 0.001 0.001 0.001 0.001 0.001
hot melt
glue
Neoprene 0.036 0.04 0.04 0.02 0.026 0.026 0.026 0.026 0.022
and latex
adhesive
Hardener 0.0017 0.001 0.0019 0.0019 0.0017 0.0017 0.0017 0.0017 0.0015
7
Thermo 0.01 0.012 0.007 0.007 0.007 0.007 0.005
rod
polyester
Thermo 0.013 0.016 0.013 0.01 0.01 0.01 0.01 0.01
rod
polyamide
Label (Pcs) 1 1 1 1 1 1 1 1
Shoe laces (Prs)
Rubber Sheet (Sq.mt) 0.06
Packing Tissue 0.02 0.03 0.02 0.02 0.015 0.015 0.015 0.015 0.015
Materials paper
(for
rapping)
(Kg)
Tissue 0.03 0.04 0.03 0.03 0.02 0.02 0.02 0.09 0.02
paper
(for lift)
(Kg)
Shoe 1 1 1 1 1 1 1 1 1
box
(Pcs)
Tacks/ Shoe nails (Kg) 0.012 0.018 0.008 0.016 0.012 0.012 0.012 0.012 0.01
MFK Cleaner (Lt) 0.005 0.01 0.005 0.005 0.005 0.005 0.005 0.005 0.004
Primer (dolente) (halogen 0.006 0.005 0.006 0.006 0.005 0.005 0.005 0.005 0.004
agent liquid) (Lt)
Pre- forming powder (Kg) 0.00005

36
Priming powder (Kg) 0.00015 0.000 0.00015 0.00015 0.0001 0.00015 0.0001 0.0001 0.00015
15 5 5 5
Eyelets facing 0.009 0.025 0.008 0.12 0.009 0.009 0.009 0.009 0.005
reinforcement (Sq.mt)
Zipper(Pcs) 2 2 2 2 2 2
welt (Mt) 1.5 1.7 1.5
Stamping foil (Mt) 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12 0.12
Elastic (Mt) 0.16 0.16 0.16 0.16 0.2 0.2 0.2 0.6 0.16
Reinforcement tape 0.9 0.56 0.2 0.9 0.16 0.16 0.16 0.8 0.16
/synthetic tape/ (Mt)
Hooks (Pcs) 4 12
Alcohol(LT) 69.56

Source: Year 2015 commodity study on Foot wear

NB: This conversion rate is a sample one not an inclusive and representative of all other types
of shoes. As a result, the rate can be different in light of types of shoes and their respective
design.

7.4. Investment cost

7.4.1. Machinery and equipment

List of machinery, auxiliary equipment are listed at the end of technical part of the document.

7.4.2. Vehicles
Table 7.3: Type of required vehicles and their respective purpose

Sr. No. Type of vehicle Purpose

1. Automobile For manager and administrative works
2. Service Bus For employees transportation
3. Trucks For distribution purpose.
NB: The price and number of vehicles could be determined based on submitted perform invoice
and the scale of project respectively

37
 7.4.3. Operational Expenses

7.4.3.1. Current Average Price of Major Raw Materials

Table 7. 4: Average price of major raw materials

Sr. No. Major raw material UoM Price /UoM

1. Upper Leather Sq ft Birr 57.84
2. Upper Lining Sq ft Birr 25.25
3. Sole (local) Pair Birr 107.275
4. Sole (import) Pair Euro 4
5. Textile Sq ft Birr 65.22
Source: Team survey on operational companies (Anbesa, ok Jamaica, Huajian, and Ramse)
7.4.3.2. Current Average Price of Auxiliary Materials
Table 7.5: Average price of auxiliary materials and inputs

Sr. No. Auxiliary material UoM Price /UoM in Birr Requirement rate in %
1. White Adhesive Liter 86.75 0.036
2. Stiffener Pair USD 0.40
3. Nylon Thread 60 Cone 204.36 0.37
4. Nylon Thread 40 Cone 208.7 0.55
5. Foam Pcs 187.17 -
6. Insole Sheet 91.3 2.17
7. Shoe lace Gross 139.13 1.04
8. Counter Sheet 87.83 2.19
9. Moccasin thread Meter 0.06
10. Cream (shoes polish) Pcs 75 -
11. Zipper Pair 8.26 -
12. Steal shank Pair 1.4
13. Primary sole cleaner Litter 130 0.00004
14. Roughing ring Pcs 71.69 0.71
15. Shank board Sheet 82.62 0.90
16. Silver/ refill Pcs 15 7.50
17. Top puff Sheet 95.63 1.70
18. Staffing paper Ream 478.26 -
19. Eva sheet Sheet 86.96 1.06
20. Yellow adhesive Liter 86.75 0.07
21. Zelebet Pcs 0.62 0.62
22. Shoe decor Pcs 0.44
Source: Team survey on operational companies (Anbesa, ok Jamaica, Huajian, and Ramse)

38
 7.4.3.3. Current Average Price of Packing Materials
Table 7.6: Current average price of packing materials

Sr. No. Packing materials UoM Price /UoM in Birr

1. Shoes box Pcs 8.20
2. Poly bag kg 8.70
3. Tissue paper pcs 2.19
4. Plaster Pcs 28.30
5. Carton box Pcs 45
Source: Team survey on operational companies (Anbesa, ok Jamaica, Huajian, and Ramse)

7.4.3.4. Current Average Price of Uniform & Cloths

Table 7.7: Uniform and cloths

Sr. No. Packing materials UOM Price /UoM in Birr

1. Uniform Pcs 150
2. Glove Pairs 5
3. Face mask Pcs 5
4. Shoes Pair 420
Source: Team survey on operational companies (Anbesa, ok Jamaica, Huajian, and Ramse)

7.5. Overhead Expenses

A. Utilities
 Electricity Cost/KWh: It will depend on the specification of the proposed technology
choice.
 Water Tariff Rate
The tariff rate will depends up on the water requirement for the meant project. Hence the
appraiser has to refer Research and Project Data Management Directorate’s Cross Cutting
Project Supporting Data, 2018.

39
  Fuel cost:
 For Automobile: 13-15 Km per liter
 For Truck:
Table 7.8:Fuel consumption

Gross Distance Fuel Fuel Consumption AVERAGE

Vehicle Pay Load travelled in one Consumption per Km for each ton
Weight liter per Km of load lit/km/ton

7.5 lit/k
TON 3.124 ton 5.840 km/lit 0.171 m 0.055 lit/km/ton

lit/k
0.035
12 TON 6.311 ton 5.500 km/lit 0.182 m 0.029 lit/km/ton

lit/k
18 TON 10.198 ton 4.540 km/lit 0.220 m 0.022 lit/km/ton

 For Service Vehicle : 0.013559 lit/seat/ km

 The cost of oil and grease: 2% of fuel cost
B. Traveling Expense: - The cost of travel and per diem is found to be on average 1.27% of
annual salary.
C. Medical expense: 5% of wage and salaries.
D. Telephone, post & internet: on average 0.12% of annual sales.
E. Promotion cost: on average 0.11% of annual sales.

F. Repair and Maintenance Rate

Building and construction 2%

Machinery and equipment 5%
Furniture and fixture 2%
Vehicles 5%

40
 G. Depreciation Rate

Building and Construction 5% of original cost

Machinery & Equipment 10% of original cost

Furniture and Fixture 10% of original cost

Vehicles 20% of original cost
Generator 10% of original cost

H. Land Lease Cost

It is according to land lease agreement between the project and concerned office from where
the land would be availed.

7.6. Insurance
Table 7. 9: Insurance Charges (Rates)

Type of contract Insurance premium rate

1.Marine 0.2954% - 3.5438
2.Fire
Class one 1.19%-3.95% (per mill)
Class two 1.19%-5.95% (per mill)
Class three 1.79%-6.12% (per mill)

3.Bulglary (due to barberry by breaking the Private premises1.70%-4.25% (per mill)

key) Commercial risks 3.40%-14.45% (per mill)
Industrial risks 0.85%-14.45% (per mill)
4. Contractors all risks (CAR) 2.00%-4.% (per mill)
5.Erection all risks (EAR) 2.00%-4% (per mill)
6.Contractors plant and machinery (CPM) 5%-12% (per mill)
Marine
During transportation either on ocean transport or from port to project location insurance paid.
Fire
Based on the building type class one means made of block and standardize which is not easily
exposed to fire.
Class two means less than the class one but easily exposed for fire comparing with class one.
Class three means building made of wood and other cheap materials which is very easy for fire.

41
Burglary
Due to breakage of home especially the key and all the asset or the part taken over by thief or
barber.
Contractors all risks (CAR)
Is due to construction building contract if it failed on construction either by cracking or by land
sliding the building may laid down during construction.
Erection all risks
This is for machinery erection especially during installation of machine.
Contractor’s plant and machinery (CPM)
This is due to for machinery simply for industry or other types of machines.

7.7. Working Capital

Table 7. 10: Working capital determination

Sr. No. Description Period (Months)

1 Salary and wages 1
2 Domestically available raw material 1
3 Imported raw materials 4
4 Utilities 1
5 Fuel, oil & lubricants 1
6 Stationary and office supply 1
7 Travel & per diem 1
8 Up to 45 days
Account receivable
9 15-30 days
Finished products

42
REFERENCE
Anbessa Shoe Sh. Co

Central Statistical Agency data

Huajian International Shoe City plc

Ethiopian Leather Development Institute

ERCA

ITC Trade MAP

OK Jamaica

Ramsay Shoe Factory

43