AGP-LMD End Market Analysis

Agricultural Growth Program-
Livestock Market Development

End Market Analysis for
Meat/Live Animals, Leather and Leather
Products, Dairy Products Value Chains
Expanding Livestock Markets for the Small-Holder Producers
Date: April 5, 2013

Prepared by AGP-Livestock Market Development Project
AID-663-C-12-00009
DISCLAIMER
The authors’ views expressed in this publication do not necessarily reflect the views of the United
States Agency for International Development of the United States Government.
1
TABLE OF CONTENTS
Executive Summary .............................................................................................................................. 5
Methodology ......................................................................................................................................... 8
Inroduction ............................................................................................................................................ 9
Live Animals....................................................................................................................................... 11
Meat .................................................................................................................................................... 19
Leather and Leather Products ............................................................................................................. 25
Dairy (Domestic Analysis Only)......................................................................................................... 31
Annexes .............................................................................................................................................. 36
Annex 1: Ethiopia Export and Import Data by Value Chain .............................................................. 37
Annex 2: Angola Summary Market Analysis for Livestock Products ................................................ 40
Annex 3: Egypt Summary Market Analysis for Livestock Products .................................................. 43
Annex 4: Democratic Republic of Congo Summary Market Analysis for Livestock Products.......... 50
Annex 5: Italy Summary Market Analysis of Livestock Products ..................................................... 55
Annex 6: Kenya Summary Market Analysis of Livestock Products .................................................. 61
Annex 7: Turkey Summary Market Analysis of Livestock Products ................................................. 67
Annex 8: United Arab Emirates Summary Market Analysis for Livestock Products ........................ 74
Annex 9: Contacts for Dairy Domestic EMA ..................................................................................... 79
References ........................................................................................................................................... 81
2
LIST OF FIGURES
Figure 1: Livestock Transactions form Selected Areas for Cattle, Sheep, and Goat ............................ 13
Figure 2: Seasonal Variation in Prices for Sheep in Metharam, Babile, Yabello and Dubuluq ........... 13
Figure 3: Seasonal Variation in Prices for Goat in Metharam, Babile, Yabello, Dubuluq ................... 14
Figure 4: Ethiopian Imports and Exports of HSL ................................................................................. 25
Figure 5: Steps and Duration of Shipping Materials from Italy to Ethiopia ......................................... 26
LIST OF TABLES
Table 1: EMA Team Members ............................................................................................................... 8
Table 2: Estimated Ethiopian Export Value of Value Chain Products to Countries Examined ........... 10
Table 3: Informal Market Channels for Ethiopia's Live Animals ......................................................... 11
Table 4: Average Price of Live Animals in Addis Ababa in ETB ........................................................ 14
Table 5: Competing Countries for Meat and Live Animals .................................................................. 16
Table 6: Annual per Capita Meat Consumption (KG) .......................................................................... 19
Table 7: Price of Beef and Mutton (USD) ............................................................................................ 20
Table 8: Wholesale and Retail Prices for Competitor Countries .......................................................... 22
Table 9: Imported Milk and Milk Products (KG) ................................................................................. 34
Table 10: Ethiopia Trade Data for Meat (HS 02), 2011 ....................................................................... 37
Table 11: Ethiopia Trade Data for Live Animals (HS 01), 2011 .......................................................... 37
Table 12: Ethiopia Trade Data for Hides, Skins and Leather (HS 41), 2011........................................ 38
Table 13: Ethiopia Trade Data for Leather Products (HS 42), 2011..................................................... 38
Table 14: Ethiopia Trade Data for Dairy Products (HS 04), 2011........................................................ 39
Table 15: Angola Trade Data for Meat (HS 02), 2011 ......................................................................... 40
Table 16: Beef Prices in Angola (USD)................................................................................................ 41
Table 17: Egypt Trade Data for Meat (HS 02), 2011 ........................................................................... 43
Table 18: Egypt Trade Data for Live Animals (HS 01), 2011 .............................................................. 43
Table 19: Egypt Trade Data for Hides, Skins and Leather (HS 41), 2011............................................ 44
Table 20: Egypt Trade Data for Leather Products (HS 42), 2011 ........................................................ 44
Table 21: Transport Price from Ethiopia to Egypt (USD) .................................................................... 47
Table 22: DRC Trade Data for Meat (HS 02), 2011 ............................................................................. 50
Table 23: Italy Trade Data for Meat (HS 02), 2011.............................................................................. 55
Table 24: Italy Trade Data for Hides, Skins and Leather (HS 41), 2011 .............................................. 56
Table 25: Italy Trade Data for Leather Products (HS 42), 2011 ........................................................... 57
Table 26: World Totals and Leading Exporting Countries for Hides, Skins, and Leather ................... 58
Table 27: Kenya Trade Data for Hides, Skins and Leather (HS 41), 2011 ........................................... 61
Table 28: Kenya Trade Data for Leather Products (HS 42), 2011........................................................ 61
Table 29: Turkey Trade Data for Hides, Skins and Leather (HS 42), 2011.......................................... 67
Table 30: Turkey Trade Data for Leather Products (HS 42) 2011........................................................ 68
Table 31: UAE Trade Data for Meat (HS 02), 2011 ............................................................................. 74
Table 32: UAE Trade Data for Live Animals (HS 01), 2011 ............................................................... 74
Table 33: Live Animal Prices of Competitors in Dubai Livestock Market .......................................... 76
Table 34: Beef Wholesale Prices of Competitors in UAE Markets ...................................................... 77
3
LIST OF ACRONYMS
AED United Arab Emirates dirham
AGP-LMD Agricultural Growth Program - Livestock Market Development Program
CAR Central African Republic
CBPP Contagious Bovine Pleuropneumonia
CCPP Contagious Caprine Pleuropneumonia
CSA Central Statistical Agency of Ethiopia
DEMA Domestic End Market Analysis
DRC Democratic Republic of Congo
EMA End market analysis
ERCA Ethiopian Revenues and Customs Authority
ESL Ethiopia Shipping Lines
ET Ethiopian Airlines
ETB Ethiopian Birr
FAO Food and Agriculture Organization
FMD Foot and Mouth Disease
FMHACA Food, Medicine and Health Care Administration and Control Authority
GoE Government of Ethiopia
HACCP Hazard analysis and critical control points
HS Harmonized Commodity Description and Coding System
HSL Hides, Skins and Leather
ISIC The International Standard Industrial Classification of All Economic
Activities
ISO International Organization for Standardization
LC Letter of Credit
LE Egyptian Pound
LIDI Leather Industry Development Institute
LoL Land o' Lakes, Inc.
LSD Lumpy Skin Disease
MLA Meat and Live Animals
MSE Micro and Small Enterprises
PPR Peste des Petits Ruminants
RVF Rift Valley Fever
SAI Sebeta Agro Industry
SNNPR Southern Nations, Nationalities, and Peoples' Region
SNV SNV Netherlands Development Organization
SPS Sanitary-Phytosanitary
SPS-LMM Sanitary and Phytosanitary and Livestock and Meat Marketing
TAIP Timret Agro Industry Processing
TIN Trade License Identification Number
UAE United Arab Emirates
UHT Ultra High Temperature milk
USA United States of America
USAID United States Agency for International Development
USD United States dollar
VAT Value Added Tax
4
EXECUTIVE SUMMARY
Ethiopians have been engaged in livestock production and trade for centuries and much of the
business of livestock production is not that much different today than what it has been over the years.
Yet in a hyper-competitive global economy that demands instantaneous changes to product design and
ever higher standards of quality and supply, gaining and maintaining market share, even in one own
market is more challenging than ever. For instance, in order to gain more than the one-tenth of one
percent of the world's global meat exports (Ethiopia’s current share), the industry and government
need to adopt new approaches to the livestock trade (and to its many by-products like leather and
dairy) and change old habits and customs that are only preventing the industry from taking a
significantly larger share of global trade.
Actors along the value chain also need to target and grasp new opportunities and employ creative
approaches supplying and developing new products for new and existing markets. A bright spot for
the Ethiopian leather industry is the production of leather gloves, which has only recently begun
operating in the country. The glove industry, which is currently strictly focused on export markets, is
in its infancy and expected to grow quickly in the years to come as more investors discover that
Ethiopian hair sheep skin is one of the best materials in the world for making fashion and sports
gloves because of its softness and strength. These are the types of new products and industrial ideas
that will propel the industry forward.
Ethiopia has a number of livestock value chain market opportunities that if realized will power the
growth of the livestock industry and value chain as well as the overall economy. Some examples of
these opportunities and challenges include:
Live Animals
Ethiopia currently exports through formal market channels nearly half a million head of animals per
year and those numbers are increasing by 15-25% per year. This rapid rise in the export of live
animals creates a conundrum for the country because by lowering the number of live animals
exported, Ethiopia would see a reduction in the overall revenue attributed to live animal exports; but
the animals that remain in the country will be processed into value added products such as meat,
leather and leather products, which will create more jobs and new export markets. An increase in the
number of live animals exported, on the other hand, would generate growth in the amount of revenue
(GDP) to the country, but the meat and hides, skins and leather industries would continue to suffer
shortages of raw material. Addressing the export market for live animals is a balancing act that the
Government of Ethiopia and the value chain actors will need to address in order to reach a balance
that satisfies the entire value chain.
Meat
Ethiopia has potential to increase the volumes and values of domestic and export sales of meat and
meat products. This could be achieved by increasing Borena beef exports, expanding
commercialization of production and marketing of livestock, diversifying into other products such as
the processing of sausages and other similar types of meat and boosting domestic consumption.
However, in order to achieve greater sales and exports, a number of challenges must be met including
poor product quality, which is the most pronounced concern to be addressed, followed by improving
price competitiveness and strengthening business relationships. Most of the recommended actions to
improve the marketing of live animals will also contribute to increasing the quality of Ethiopian meat,
such as improving traceability systems, moving toward specialization of cattle-raising and improving
feed, breeding and vaccination practices and upgrading the transparency of livestock trading systems.
Leather and Leather Products

The Ethiopian leather industry has significant potential to become a world class supplier of high
quality finished leather and leather products, including shoes, garments, gloves and accessories.
Foreign investors have been increasingly discovering Ethiopia’s potential. The government of
Ethiopia has made the leather and leather products value chain among the top four priority industries
in the country due to its strong backward linkages to the rural economy aiding in the alleviation of
5
poverty and its potential for increasing exports and hence the flow of foreign currency into the
economy. If the industry players can move beyond the challenges of raw material quality and supply,
the Ethiopian brand of leather production has unlimited potential for growth in the coming decade.
Dairy
Ethiopia’s domestic dairy industry is limited in terms of demand by the low per capita consumption of
milk, the predominance of informal, unpasteurized sales (90% in Addis Ababa, 95% nationally), and
demand that fluctuates according to fasting periods. Consumers do not have confidence in the quality
of milk. Milk prices in urban areas are not easily affordable for middle and low income customers.
The opportunity for the dairy industry is to increase demand by promoting the nutritional benefits of
milk, coupled with improving the product’s quality and reputation, and reducing prices and increasing
availability through improvements in value chain productivity and logistics. The industry could also
introduce new products and packaging that cater to the consumption patterns of different consumer
segments, that extend shelf life, and that meet the price points of middle and low income customers.
Common and Cross-cutting Issues

The domestic and international end markets identified several common and cross-cutting issues,
including:
Prices and Inflation

Prices increases and inflation have been and continue to be important issues that are dramatically
impacting the price competitiveness of a number of Ethiopian industries tied to the livestock value
chain. These include meat for the export and domestic markets, and live animals for export. Price
increases have had such an impact that major Egyptian importers have recently stopped all imports of
meat into Egypt. The VCAs identified many opportunities to control costs and improve productivity
and efficiency within the value chains. Actions that reduce costs, and hence prices, will be key factors
to enable Ethiopia’s price competitiveness.
Identification and tracing

With the recent events in Europe arising from the discovery of horse and other meat traces in products
claimed to be 100% beef, it is very likely that traceability requirements worldwide will become more
severe. The Ethiopian livestock industry will as a consequence need to comply with what is expected
to be even stricter traceability requirements in order to enter most markets in the world. The most
commonly used method of identification in Ethiopia is placing plastic ear tags on the animals,
however, there are currently no standard or widespread traceability record keeping systems in use in
Ethiopia designed to track the origination of live animals and trace them through the production
process (raising, fattening, veterinary, slaughter, packaging, storing and transport).
Quality, Certification and Reputation

In 2005, Ethiopia lagged far behind competitors such as Brazil, Australia, India, Namibia and others,
which had already met international Sanitary-Phytosanitary (SPS) requirements for meat and live
animal exports. However, through the work of targeted government policy, development projects and
investment by private industry, Ethiopia is improving its reputation for producing higher quality
goods from the livestock value chain. For instance,
The Sanitary and Phytosanitary and Livestock and Meat Marketing (SPS-LMM) Program
final report concluded that Ethiopia was improving all its systems to meet international
standards and rated Ethiopia as a country with an “improving animal health system.” 1
Beginning in 2008/2009, the government of Ethiopia established a 150% tax on the export of
semi-finished leather, prompting the Ethiopian tanneries to invest in new technology designed
to produce higher quality leather.
Ethiopian shoe companies are becoming known for producing a globally competitive ‘men’s
black classic dress shoe’. Recently a major Italian shoe consortium, Consortio Toscana
1
Norman Borlaug Institute for International Agriculture, and The Ministry of Agriculture, 2011
6
announced its intention to buy as much as USD 5 million in women’s shoes for the European
fashion market.
All of the operating export abattoirs in Ethiopia are certified for Halal. Most are HACCP
certified and those that are not are in the process of obtaining the certificate.
Four new dairy processing investments are being developed by private investors.
There are still many areas where Ethiopia needs to address quality and introduce standards and
certifications, including animal health, husbandry and off-take, slaughtering and flaying processes,
logisitics and much more. These measures to improve quality are discussed in depth in the VCAs.
They are essential for Ethiopia to succeed in increasing domestic consumption, and to succeed in
export markets.
Branding Ethiopia
There are clear preferences in both the domestic and export markets for various products originating
from the Ethiopian livestock value chain. For instance certain meats from Ethiopia are favored by
Egyptian consumers; domestic cattle breeds and some breeds of sheep are considered superior by
Middle Eastern buyers; and the leather from sheep indigenous to Ethiopia is prized by high-end
consumers in Europe and the United States. This points to the potential for branding certain products
derived from the livestock value chain as sourced from Ethiopia.
Trade Fairs
Attending and exhibiting at the right trade fairs is one of the best ways for companies in developing
and transitional economies to establish contacts and gain access to new markets. Ethiopian companies
working in leather, meat and dairy have a number of opportunities to actively promote Ethiopian
goods at industry trade shows in targeted end-market destinations such as Turkey, Italy, UAE, Kenya
as well as in Ethiopia. For instance the All-African Leather Fair, which was held in Addis Ababa
between 20 February and 22 February, 2013, was not only a good venue for Ethiopian and other
Africa producers to show off their production, but important buyers from Europe, Asia and the Middle
East were also in Addis to meet with potential new suppliers and identify market opportunities. This
trade fair generated one deal with an Italian buyer worth USD 5 million for two Ethiopian leather
products manufacturers.
Developing buyer-seller relationships

Several importers with whom the LMD market research team met, particularly in the live animal and
meat value chains, complained about the difficulties they encountered when conducting business with
their Ethiopian counterparts. Complaints included spotty relationships driven by marginal price
differences and not responding to basic business communications, particularly when addressing
complaints. The industry might want to consider approaches to improving buyer-seller relationships,
including holding reverse trade fairs in Ethiopia which would involve inviting interested and potential
buyers to the country to meet with and begin developing productive business relationships.
7
METHODOLOGY
The methodology for collecting data was largely through intensive one-on-one interviews, focus
group discussions, surveys and market observations in selected end markets based on designed
interview questionnaires as well as a desk review. In addition to exploring the domestic market
covering Addis Ababa and major towns in the four AGP-LMDP regions, team members traveled to
end-market destinations to speak to traders/importers; processors; retail outlets; wholesalers; leading
trade associations; transporters; consumer groups; Ethiopian embassies/consulates; representative host
country government ministries; investor groups/potential
investors. Goals of the LMDP End Market
Research and Analysis Study Tours
These market research visits, which were conducted between 9 Inform the development of the LMDP
February and 1 March, 2013, included research in Egypt, strategy
United Arab Emirates, Angola, Democratic Republic of Congo, Market Ethiopia as a potential
supplier of intermediate and finished
Kenya, Turkey and Italy. Each country visit lasted from four to goods
six days2. Annexes 2 through 8 summarize details of the market Identify potential investors
information within the countries visited. Country teams Lay the groundwork for investment
conferences/trips to the countries
included one technical staff member of the LMD project, as visited
well as specialists from the Ethiopian Government. On three of
the country trips – Egypt, UAE and DR Congo – a consultant from either BCaD or Precise
accompanied the teams. Italy was visited and researched solely by a J. E. Austin consultant. The team
members, countries visited and dates of travel include:
Table 1: EMA Team Members

Organizatio
Name Country Dates of travel
n
Afework Yohannes Germamo Egypt 9-Feb-2013 − 14-Feb-2013 BCaD
Girma Abebe Yami Egypt 9-Feb-2013 − 14-Feb-2013 LMD
Dr. Melaku Asefa Kiros Egypt 9-Feb-2013 − 14-Feb-2013 APHRD
Taye Tibebu Yeshita Kenya 24-Feb-2013 − 1-Mar-2013 LIDI
Haimanot Asmerew LMD
Hileselassie Kenya 24-Feb-2013 − 1-Mar-2013
Henok Mechal Haile Angola 20-Feb-2013 − 25-Feb-2013 EMDTI
Tesfaye Lemma Gesese Angola 20-Feb-2013 − 25-Feb-2013 LMD
Antigegn Kebede Belay Turkey 11-Feb-2013 − 19-Feb-2013 LIDI
Haimanot Asmerew LMD
Hileselassie Turkey 11-Feb-2013 − 19-Feb-2013
Afework Yohannes Germamo DR Congo 17-Feb-2013 − 22-Feb-2013 BCaD
Irma Abebe Yami DR Congo 17-Feb-2013 − 22-Feb-2013 LMD
Melake Asefa Ejeta DR Congo 17-Feb-2013 − 22-Feb-2013 AED
Dr. Elias Walelign Dagnachew UAE 22-Feb-2013 − 28-Feb-2013 APHRD
Hailemelak Asessfa UAE 25-Feb-2013 − 1-Mar-2013 Precise
Tebeje Nigussie Kibru UAE 22-Feb-2013 − 28-Feb-2013 LMD
Kent Ford Italy 28-Jan-2013 − 31-Jan-2013 JAA
2
Saudi Arabia was also a targeted market, but the team was unable to obtain travel approval.
8
INTRODUCTION
The Agricultural Growth Program - Livestock Market Development Program (AGP-LMD) is a
development project funded by the United States Agency for International Development designed to
improve the incomes and nutritional status of Ethiopian farmers and other stakeholders along the
livestock value chain. It will upgrade and catalyze future sustainable development of the sector, by
addressing systematic bottlenecks and facilitating value chain participants' own engagement and
investment. Key goals include increasing productivity and competitiveness of selected livestock
value chains, and spurring investment and innovation all in an environmentally and economically
sustainable way. The project will also support the Government of Ethiopia as it strives to achieve
targets established in the Growth and Transformation Program (GTP). Launched in 2010-2011, the
GTP has established annual export goals of 111,000 metric tons of meat and 2,000,000 live animals
by 2015, which represent significant increases over current export performance.
The international end market analyses (EMAs) were organized by AGP-LMD in collaboration with
J.E. Austin Associates, BCaD Management Consulting PLC, Precise Consult International and the
Government of Ethiopia. The domestic end market analysis was undertaken by BCaD and Precise.
This end market analysis report is a complement to and was conducted in parallel with the Value
Chain Analyses of the livestock value chain in targeted areas of Ethiopia.
The export component of the end market analysis explores market opportunities, Ethiopian
competitiveness, and recommendations for Ethiopian export development in selected export markets
for live animals and livestock products including meat, leather and leather products. All of these
products are derived from cattle, goats and sheep endemic to Ethiopia. The domestic end market
analysis information briefly describes the markets for these same products, plus dairy products. It
also examines market characteristics of three cross-border land corridors.
The report discusses each of the main value chains – Live Animals, Meat, Leather and Leather
Products and Dairy. Summaries of information on each country visited are presented in the Annexes.
9
Table 2: Estimated Ethiopian Export Value of Value Chain Products to Countries Examined
Value chain End Markets Examined in Report Estimated
Export Value
‘000 USD
Live Animals · Ethiopia 190,357a
(Cattle, Goats, Sheep) · Informal Cross-border Trade 210,000b
· Egypt 14,450c
· UAE 5,377c
Meat · Ethiopia 77,210 a
· Egypt 1,780 c
· UAE 43,782 c
· Angola 3,774 c
· Democratic Republic of Congo 0c
Dairy · Ethiopia 276c
Leather and Leather · Ethiopia 122,713a
products · Egypt 0c
· Kenya 3c
· Turkey 1,293 c
· Italy 39,496c
a. Global Trade Statistics, 2011

b. LMD research estimate, 2013
c. UN Comtrade, 2011
10
LIVE ANIMALS
MARKET S FOR ETHIOPIA’S LIV E ANIMALS
Export
Regional trade dominates exports. Ethiopia’s top export markets for live animals in order of
sales volume are: Sudan, Somali, Egypt, Djibouti and Saudi Arabia, Yemen and the United
Arab Emirates. [See Annex1: Ethiopia Export and Import Data by Value Chain] Ethiopia
trades high volumes of live sheep, goats and cattle. Ethiopia’s live animal exports are
estimated at 2,323,500.3
80-90% of exports of live animals are informal – predominantly across borders with
Somalia/Kenya, Somaliland, Djibouti and Sudan. Exporting through informal channels is
simpler and more cost-effective than exporting formally and the exporter can avoid legal
requirements for registration, licensing, foreign currency regulations and taxation. The
overwhelming size and scope of illegal operators puts a competitive strain on those operating
legally who find it difficult to compete on price. Recent changes have reduced the time
required to acquire and renew registration and licenses both at the federal and regional levels
through streamlined business processes. However, most traders continue to operate
informally.
Table 3: Informal Market Channels for Ethiopia's Live Animals4

Export Passage Locations in Types of Live Export Volumes Destination
Destination Ethiopia Animals (Formal and Markets of
Informal) Animals
Somaliland Eastern Ethiopia (Somali Majority are Major legal export Majority to
Region); animals are Somali Blackhead animals are oxen: Saudi Arabia
trekked through or fat-tailed sheep, 1,700 heads/day in and other
Hartishek and Lefeissa to followed by goats, peak periods Middle
the Somaliland border cattle and young ($500/head) (2013 Eastern
town of Togwajale camels estimates) markets
(UAE,
Bahrain,
Kuwait, Oman
and Qatar);
Legal exports in Many also go
2012 were: to Djibouti for
103, 725 oxen re-export to
8,713 camels Dubai and
34,931 shoats Saudi Arabia
3
Author’s estimation based on Ministry of Agriculture and LMD data. Includes 472,000 formal exports
(Ministry of Agriculture 2011 data ) plus 1,851,500 informal exports (author’s research) from MLA VCA
4
Economic Commission for Africa, 2010, Woldu, Akliku, 2009, and FAO, 2010
11
Export Passage Locations in Types of Live Export Volumes Destination
Destination Ethiopia Animals (Formal and Markets of
Informal) Animals
Somalia / Southern Ethiopia from Cattle 50,000 to 60,000 Northern
Kenya Borena Zone in Oromiya heads of cattle per Kenya,
Region and year (FAO, 2010) Nairobi and
from Afder and Liben other cities in
zones of Somali Region Kenya
Djibouti Most animals are Cattle, sheep and 97,000 total Majority to
purchased by Arabs goats (Economic United Arab
whose agents purchase Commission for Emirates and
inside of Ethiopia Africa, 2010) other Middle
Last 6 months of Eastern
2012, customs countries,
caught illegal either through
smuggling of: Saudi Arabia
400 shoats 155 or Yemen.
cattle
Sudan Approximately 90% of Male cattle Legal estimate: Egypt,
informal export is done originating in 100,000 – 190,000 Kuwait,
by producers themselves Amhara Region cattle annually Libya, Qatar,
from the Amhara Region (2013 estimate, Saudi Arabia,
—through informal Metema customs) Syria, UAE,
markets inside Sudan Illegal estimate: Yemen
1000 cattle/day
(calves, heifers,
cows, and all ages
of male animals –
though mostly
calves and heifer
(2013 estimate,
Metema customs)
2012, customs
caught illegal
smuggling of:
1200 cattle
77,000 cattle per
year (Borlug, 2009)
Re-exportation and re-branding of Ethiopian animals to Middle Eastern markets is the

norm. Ethiopian animals are exported to and through Somalia, Somaliland, Djibouti and
Yemen. They are often ‘re-branded’ in those countries and then re-exported to Middle
Eastern markets with the country of re-export listed as the country of origin.. This is partially
due to the fact that Ethiopia does not have an organized quarantine system that is recognized
in these terminal market of the Middle East which fuels concerns of disease transmission.
There are frequent bans of live animals originating from Ethiopia due to diseases such as Rift
Valley Fever (RVF), foot and mouth disease (FMD), contagious bovine pleuropneumonia
(CBPP), contagious caprine pleuropneumonia (CCPP), peste des petits ruminants (PPR),
brucellosis in ruminants, and lumpy skin disease (LSD). The UAE currently imposes a ban
against the import of live animals that come directly from Ethiopia; however, animals that are
re-exported and come with a ‘certificate of origin’ from one of the countries noted above and
certified by the UAE as being disease-free, are allowed to enter the UAE even though the
animals are originally from Ethiopia.
12
Domestic
Live animal sales in Ethiopia are seasonal. Supply and demand are heavily influenced by
the season of the year and the occurrence of religious and cultural festivals, as well as
availability of feed which drives sales during the dry season. The chart below shows the
livestock transactions from selected areas, including Metharam, Babile, Yabello, Dubuluq of
Ethiopia, while the next two charts show the seasonal fluctuation in prices related to the
supply and demand of the animals.
Figure 1: Livestock Transactions form Selected Areas for Cattle, Sheep, and Goat5
14000
Number of Recorded Transactions
12000
10000
8000 Cattle
Sheep
6000
Goat
4000
2000
0
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Figure 2: Seasonal Variation in Prices for Sheep in Metharam, Babile, Yabello and Dubuluq6
300
250
200
Metharam
150 Babile
Yabello
100 Dubuluq
50
0
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
5
Getachew, 2008
6
IBID
13
Figure 3: Seasonal Variation in Prices for Goat in Metharam, Babile, Yabello, Dubuluq7
400
350
300
250 Metharam
200 Babile
Yabello
150
Dubuluq
100
50
0
Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
Meat consumption in Ethiopia is low. Annual per capita meat consumption in Ethiopia is less than
8.5 kg per person per year, which is the second lowest in all of Africa. This has serious impact along
the entire livestock value chain from breeding to meat production to hides, skins and leather
production.
Domestic meat consumption is segmented by taste, point of purchase and cut. There is a strong
tradition of purchasing from butcher shops for snacks or fresh cuts, while many Ethiopians buy live
animals directly from producers for religious holidays. Higher income consumers prefer lean meat
purchased from supermarkets with proper packaging and labeling. Otherwise, domestic preferences
are complimentary (opposite) of export preferences. That is, Ethiopians in general prefer meat from
higher-fat female shoats and castrated male shoats (as opposed to non-castrated shoats with lower
proportions of fat), and highland cattle (as opposed to lowland cattle) with the exception of young
Boran bulls, which are prized by all.
Live animal prices have been increasing over past 5 years. The average price of live animals on the
formal markets has been continuously escalating for the last five years (between 60 and 200 percent
increase). The continuous increase in the prices paid for live animal is attributed to various factors
including illegal trade across borders leading to a shortage of supply to domestic markets, increasing
price of inputs to feedlots including rapid increases in the price of feed, and overall inflationary
pressures. Even with the increased price of live animals, however, the volume of animals formally
exported has increased from 10,372 in 2002/2003 to 472,041 in 2010/2011.
Live animal prices vary seasonally. In the North, supply peaks after the October– January rainy
season then drops precipitously. The South experiences low sales volumes during the July–September
rainy season and the fasting period (February–April), but trade peaks immediately following these
periods. (Negussie, Socio-economics and Policy Research Working Paper 52, 2003)
Table 4: Average Price of Live Animals in Addis Ababa in ETB8

Animal 2009 Average Price 2012 Average Price Percentage
Increase
Goat 280 860 207%
Sheep 340 900 165%
Cattle 3400 5400 59%
7
Getachew, 2008
8
Ethiopian Livestock Information System
14
MARKET REQUIREMENTS AND ETHIOPIA’S PERFO RMANCE
The key success factors to increase market share are universal: meet market specifications and legal
requirements, and consistently deliver high-quality products at competitive prices and in sufficient
quantity. Ethiopia faces challenges in all of these factors, despite its competitive advantage of
breeding the highly sought-after cattle from Borena and Bale regions.
Consumers prefer animals of less than five years of age. Findings by the LMD team during the
market research study tours showed that buyers in most countries wanted animals that were less than
five years old. This is particularly true of cattle from the Borena and Bale areas. Almost all sheep
and goat that are exported from Ethiopia are less than 5 years old and in fact most are 2 to 3 years old.
However, Ethiopian cattle have earned a poor reputation in export markets for not meeting buyer
specifications of being younger than five years old and of a certain fat/bone content leading the a
general aversion to importing Ethiopian cattle.
Quality issues remain a concern for all end markets. Factors driving these quality concerns include:
Consumers in importing countries have clear preferences for the weight of cattle – weight
preferences differ by importing country. For example Egypt prefers smaller cattle weighing
around 240kg whereby UAE prefers larger cattle weighing 320kg.
Consumers prefer the meat of younger cattle – Given that the livestock sector in Ethiopia is
largely a smallholder operation, many cattle sold in the marketplace are old, draft oxen that
are retired from farm labor. This makes their meat tough with high bone content – generally
less desirable to consumers.
Importing countries have strict quarantine requirements– All export countries require
quarantine of live animals before being formally imported into the country of destination.
Quarantine requirements for Ethiopian animals vary, ranging from seven days in Yemen to 30
days in Saudi Arabia and Egypt. Ethiopia has yet to establish a formal quarantine facility.
Therefore animals that ready for export must be kept for 21 days at the feedlot or exporter’s
hold facility while the animals are vaccinated and examined. Since this is not a formal
quarantine facility, importing countries such as the UAE only accept formal, certified
quarantine facilities. Therefore, all animals from Ethiopia must go through the quarantine
facility for a 30 day stay in Djibouti, where they are re-certified as Djibouti origin and then
shipped to UAE. Animals destined for UAE are then re-quarantined for an additional 15
days before being released for processing. During the field research conducted in UAE, the
LMD team learned that there were two primary reasons why there is currently a ban on the
importation of Ethiopian live animals into the UAE. One is that Ethiopia does not have
internationally certified quarantine facilities, and the second reason is that the veterinary
laboratories are not internationally recognized and accredited.
Buyers in export markets require consistent quantity and delivery of live animals. Supply and
demand of live animals is highly seasonal. Animals are required in large numbers for religious
holidays with peak demand between October and December which corresponds to the end of
Ramadan and preparations for the Hajj. Supply peaks after the rainy season ends – slightly different
from north and south of Ethiopia and drops dramatically shortly after. Buyers, both domestically and
in export markets, complain about the lack of reliability in the quantity of animals available for
purchase.
Ethiopian live animals are often costly in comparison to animals from alternative sources. Prices
demanded for Ethiopian live animals have escalated recently, resulting in pauses in import
relationships and loss of market share in countries such as Egypt. Pan Afric Trade, a large importer in
Egypt with trade ties to Ethiopia since 2009 has the ability to import up to 30,000 cattle per year.
They recently ceased importing Ethiopian cattle due to a 20% price escalation (from $1500 per ton to
$1800 per ton). [See Annex 3]
15
Importers require responsive business relationships. Importers from various countries reported that
their Ethiopian counterparts were often unresponsive to business communications, particularly when
addressing complaints and unreliable in meeting contractual obligations.
ETHIOPIA’ S ADVANTAGE S AND OPPORTUNIT IES IN THE MARKETPLACE

Ethiopian cattle are highly sought after in the market. The breed and origin of the cattle drives
consumer preferences both domestically and in export regions. Export markets demonstrate a clear
preference for Boran bulls (followed by cattle from Bale area), whereas domestic consumers largely
prefer highland cattle. Branding of Borena is already occurring, but Ethiopian origination is largely
lost during the re-exportation process.
There are opportunities for increasing exports to Egypt (cattle), UAE (sheep and goats) and Yemen
(cattle). There could also be improvements in the procedures between Ethiopia and Djibouti which
could capture greater value and/or reduce costs.
COMPET ING COUNTRIES AND THEIR ADVANTAGES

Ethiopia is an important and major competitor in the live animal markets. Through both formal and
informal trade channels, Ethiopia is a major supplier of live animals to Somalia, Djibouti, Kenya, and
Sudan as well as to Saudi Arabia. As the largest livestock exporter in Africa with a value of formal
exports close to USD 200 million, Ethiopia competes with Namibia, which exported USD 149 million
in 2011, as well as Sudan and Somalia. Because of the inconsistencies in the livestock support
infrastructure and the non-commercialization of much of the Ethiopian livestock industry, the country
cannot effectively compete in some important Middle Eastern markets like United Arab Emirates,
Saudi Arabia or Qatar. Although some Ethiopian live animals do make it to these countries, usually
via Djibouti or Somaliland, these countries are primarily supplied by major exporters (and Ethiopian
competitors) such as Pakistan, India, Australia and others.
Another factor impinging on the competitiveness of the Ethiopian live animals is that in some of the
markets, like the UAE, Ethiopia is not price competitive. This is partially due to the fact that the UAE
currently bans direct import of Ethiopian animals, forcing the exporters to bring them through a third
country for additional quarantine and vaccination, before finally reaching the Dubai market. Below is
a table with the current prices of selected animals being sold in the Dubai market in early 2013.
Table 5: Competing Countries for Meat and Live Animals
Competitor countries Type of cattle Price (USD)
Pakistan Bigger cattle 750
Somalia Small 500
Medium 580
Bigger 750
Ethiopia Bigger 850
16
MARKET SUMMARIES
Egypt - Cattle
Market opportunity and trends
Egyptians like the taste of Ethiopian beef, and demand for Ethiopian beef is large and rapidly growing
in Egypt. Ethiopia already exports live animals to Egypt and there is substantial interest from
Egyptian importers to increase imports. Ethiopian live animal exports to Egypt averaged USD 11
million 2010 and 2012, accounting for an average of 10% of Egypt’s total live animal imports.
Existing importers are already working closely with several exporters, but pointed out that
consistency of price, quantity and quality should be emphasized. Sudan is the major competitor to
Ethiopia in the Egyptian live animal market.
Market requirements
The Egyptian market is mainly demanding young animals ideally below age two and weighting
between 220-230 kg. Animals below 5 years old are also acceptable but only if the availability of
younger animals is limited.
Before the animals are exported, they are required to be kept in quarantine for 21 days and the
Egyptian Council of Scientists send a team of veterinarians to inspect the health of animals before
approving import. The animals are quarantined again after entry into Egypt and slaughtered at the port
of unloading so as to avoid any possible transmission of disease.
United Arab Emirates – Sheep, Goats, Cattle

The UAE is a large importer of live sheep and goats. It imported 208,219 live sheep in 2007, but only
3,795 cattle. Live cattle from Ethiopia, mainly Borena and Bale origin, are well known in UAE and
could be a growth opportunity. Currently, UAE ban imports of live animals from Ethiopia even
though animals imported from Djibouti and Somalia have Ethiopian origin – a fact that is well-known
by live animal importers. Due to the ban, official exports from Ethiopia to UAE do not exist.
Competition is steep in the UAE live animal market. Ethiopia’s major competitors are Somalia
(sheep, cattle), India (sheep and goats), Iran, Kenya, and Australia (sheep).
Market requirements
The UAE market is mainly demanding Somali Blackhead sheep (25-35kg) and Boran cattle (220-
350kg).
The quarantine regulation requires 15 days of quarantine before entry into UAE. Live sheep and goats
are tested for Rift Valley Fever and Brucellosis by conducting randomized sampling. If disease is
detected an additional 15 days of quarantine is required to look for clinical signs of suspected
diseases. The major causes of animal rejection in Dubai are cysticercus bovis in cattle and
hydatidosis in small ruminants. At the quarantine in the port of Hamriya, cattle are vaccinated against
FMD type A, O, C, SAT 1 and rinderpest, while shoats are directly taken to the market. Following the
2007 RVF outbreak in Kenya, the UAE imposed an import ban on Ethiopia for approximately six
months. (Farmer, 2010)
Additional market analysis and logistics channel details are presented in Annex 8 of this report.
Yemen – Goats, Sheep and Cattle

Yemen serves as a major hub for the import of live animals into the Gulf. The country imports a large
numbers of sheep, goats and cattle for re-export to other Middle Eastern countries. In 2011, Ethiopia
exported a total of USD 6.3 million in live animals to Yemen but this was a decrease from USD 10.8
million in 2007. Given Yemen’s relaxed SPS requirements, Ethiopia could conceivably increase
exports to Yemen for re-export given its geographic proximity.
17
Market requirements
Yemen has less stringent SPS requirements and recognizes Ethiopia’s quarantine systems thereby
Ethiopian livestock are not required to be re-quarantined in Djibouti.
MARKET OPPORTUNIT IES

The export of live animals from Ethiopia puts the country into a conundrum. By lowering the number
of live animals exported, the country will see a reduction in revenue from live animal exports, but the
animals that remain in the country will be processed into value added products such as meat, leather
and leather products. An increase in the number of live animals exported, on the other hand, will see
growth in the amount of revenue (GDP) to the country, but the meat and hides, skins and leather
industries will continue to suffer shortages of raw material. Addressing the export market for live
animals is a balancing act that the Government of Ethiopia and the value chain actors will need to
address in order to reach a balance that suits the entire value chain.
In order to succeed in seizing growth opportunities available for live animals, the end market analysis
suggests several areas for improvement of the Ethiopian livestock sector.
Commercialize livestock sales and focus on selling younger animals – Most end markets
complained that Ethiopian animals were too old, low in weight and had been used for animal
traction prior to sale in the live animal market. The traditional pattern of animal ownership
needs to change to introduce commercial breeding specifically for meat consumption rather
than for multiple purposes. This requires animals to be specially fed from early in their life to
gain their maximum growth potential in a short period. Specialization could go so far as
introducing organic certification or organizing according to specific end-markets. This will
better enable exporters to meet market specifications and improve reliable quality and
quantity.
Improve quarantine system - Quarantine standards need to be improved to meet buyer

specifications – such as those that would merit accreditation by UAE. Building a new
quarantine in partnership with private (possibly foreign) investors near the Djibouti border
could be a first step is establishing a modern, efficient quarantine system within Ethiopia.
Improve animal health, breeding and feeding services – There is a high dependency on the
public sector for animal health services and a shortage of feed in Ethiopia. Encouraging
private actors to provide such services will improve the availability and quality of such
services, particularly at live animal market places.
Improve branding efforts – There are clear preferences in both the domestic market and
export market for different types of animals originating from Ethiopia. Products that remain
unbranded cannot be distinguished from those of their competitors, whereas branding a
product adds value and allows the seller to charge higher prices than what they could
otherwise charge. Branding is perception developing a strong brand identity is perceived by
the market that the product is safe and of high quality. By developing a strong brand,
Ethiopia would join other developing economies in creating brands around important products
on the country. Value chain actors and government could develop a branding strategy that
helps identify Ethiopia as being a premier supplier of livestock products, coupled with
strategies that ensures that these products are safe and reliable.
18
MEAT
MARKET FOR ETHIO PIA’S MEAT PRODUCTS
Export
Middle East dominates export markets. The top export markets of meat in order of sales
volume is: the United Arab Emirates, Saudi Arabia, Angola, Egypt, Bahrain, Turkey, Kuwait.
[See Annex 1, Table 10]
High degree of regulation and formality of meat exports. One hundred percent of Ethiopia’s
meat exports are sold through formal channels due to a high degree of regulation of all
importing countries.
Opportunities for market growth in Egypt, Angola and UAE. Refer to section 2.3 and
relevant country annexes for details.
Domestic
Annual per capita meat consumption in Ethiopia is low. Even with this abundance of
livestock and meat, Ethiopia still has one of the lowest per capita consumptions of red meat in
Africa. There are several reasons for this low consumption, including low per capita incomes,
high domestic meat prices and the fasting days by the Orthodox Christians (43% of the
population), which means that a large part of the population does not consume meat products
for about 200 days per year. This reduces aggregate demand by 20-35%9. Only neighboring
Eritrea has a lower per capita consumption of meat than does Ethiopia. However, with
Ethiopia’s goal of becoming a middle income country by 2025, and with projected population
growth of 25% between 2012 and 2025, reaching 120 million people10, demand for meat and
meat products in Ethiopia should increase in concert.
Table 6: Annual per Capita Meat Consumption (KG)11
35
30
25
20
15
10
5
0
Imports of meat and meat products have been rising , in large part following the
establishment of luxury hotels in the capital that cater to the specific taste requirements and
quality demands of foreign nationals visiting and residing in the country. These consumers
prefer low-fat, packaged and labeled meat from supermarkets. According to UN Comtrade,
the import of meat into Ethiopia in 2011 was around USD 1.2 million, but this is up from
nearly zero imports a decade earlier.
9
Mariam, Amare, et. al., 2010
10
Population is projected to grow by 80% from 2012 to 2050. Source: United Nations, Department of
Economic and Social Affairs, 2009
11
FAOStat
19
Mirroring the increasing prices of live animals, meat prices have also been increasing.
According to CSA surveys, retail prices of beef in Addis Ababa have risen 50% in the last
four years.12 Farm gate prices for shoats have risen more than 75% in the same time period.13
Table 7: Price of Beef and Mutton (USD)14

Fresh Beef Mutton
Superior High Moderate Fair Fresh at Frozen in Elfora’s Fresh in

Slaughter Supermarkets Supermarkets
house
9.80 8.20 6.50 4.40 3.85 2.20 4.90
MARKET REQUIREMENTS AND ETHIOPIA’S PERFORMANCE

Achieving consistent quality control – Providing proper and consistent quality of meat
products is by far the most important factor in Ethiopia’s competitiveness in the market-place,
both domestically and in export markets.
Ethiopian meat does not meet quality standards demanded of the market. Issues of
meat texture (toughness), improper handling at the pre- and post-slaughter stages, and
poor cold chain management have severely damaged the reputation of Ethiopian meat
products, particularly in export markets such as Egypt, UAE and Angola.
Ethiopian Halal certification is not trusted in Middle Eastern markets. All export
markets in the Middle East and North Africa require animals to be certified ‘halal’,
which requires adherence to certain procedures and certification from an Islamic
organization. UAE retailers informed the LMD research teams that Emirati
consumers do not trust Ethiopia’s halal certification and retailers often re-package the
meat as Somalian or Indian.
Ethiopian meat is often costly in comparison to meat from alternative sources – Prices
demanded by Ethiopian exporters have increased over the past five years, challenging the
competitiveness of Ethiopian meat. Price increases of meat have been partially driven by the
price of animals, but also influenced by inefficient operations and high air transportation costs
from Ethiopia.
Buyers/Consumers in target end markets have concerns about the quality of meat from
Ethiopia Factors driving quality issues include:
Lax sanitary conditions at slaughtering facilities – Workers reportedly use their bare
hands to transfer carcasses after skins have been removed and water temperatures are
not sufficiently hot to kill bacteria and effectively clean the carcasses. These
practices result in surface bacterial contamination on carcasses as well as lingering
hair, skin, dirt and fecal matter.
Poor cold chain management – Chill facilities at abattoirs are inadequate – there is no
blast freezer procedure/equipment; temperatures at Bole Airport at Addis Ababa are
not cool enough (they are tailored to temperatures for cut flowers); and once
carcasses are loaded into containers, they often sit on the tarmac awaiting loading into
airplanes with no refrigeration. Only once in air does the cargo area finally achieve
adequate cooling temperatures.
12
CSA : Retail Prices of Goods and Services, Annual Average Prices, 2006 – 2010.
13
FAOStat.
14
DEMA, February 2013
20
Poor meat packaging – Middle Eastern as well as Angolan importers complained of
careless and poor quality of meat packaging materials.
Consumers prefer meat from animals less than five years of age
Tough meat (beef) with high bone content – A reflection of the animals’ old age is
reflected in the stiffness of the meat which requires longer cooking time which is
generally unattractive. This is a problem only with cattle and not smaller ruminants.
Buyers require reliable supply of meat. Ethiopian exporters have been unable to supply
demanded quantity as well as opportunistic selling. Seasonality of supply is also a factor
here.
Importers require responsive business relationships – Several importers complained about

difficulties in conducting business with Ethiopian counterparts. They complained of spotty
relationships driven by marginal price differences and unresponsiveness to business
communications, particularly when addressing complaints15.
Meat sold in domestic markets is not specially packaged or labeled. Most meat and meat
products retailed in the domestic meat market in Ethiopia are fresh cuts and no packaging is
used apart from newspapers and plastic bags. This prevents meat producers from effectively
branding their products and increases the likelihood of disease transmission in handling.
There are supermarkets in the capital, however, that make use of foils and other packaging
materials to pack meat, especially meat that is chilled or frozen. There is no strict legal
compliance related to the meat packaging procedures in butcheries and supermarkets.
Labeling activities are almost non-existent in the domestic meat market, although some
abattoirs are now branding their production.
ETHIOPIA’ S ADVANTAGE S AND OPPORTUNIT IE S IN THE MARKETPLACE

Ethiopian meat has a good taste profile. LMD market research teams learned that Ethiopian
meat has a good taste profile in a number of countries, including Egypt, Angola and some
countries in the Middle East. Identifying which countries specifically enjoy the taste of
Ethiopian meat and branding the meat for those market would expand possibilities for meat
suppliers.
Ethiopia can provide meat that satisfies local preferences Ethiopia is well-positioned to
supply the type of meat that is demanded by local, regional and Middle Eastern consumers.
Their Borena and Bale beef and sheep and goats are desirable and often sell at relatively
higher price points at retail markets.
Government support for meat exports. The Government of Ethiopia supports growing meat
exports by providing incentives to the agro-processing sector. The Government of Ethiopia’s
investment policy provides attractive incentives which include duty free imports of capital
goods, a tax holiday up to five years, and depending on investment location - exemption from
export duties and taxes. Additionally, investors of export industries are entitled to keep 10
percent of foreign currency generated in private accounts.

Ethiopian meat is competitive in some regional markets including the UAE market which is the
industry’s largest export market. According to the tables below, Ethiopia effectively competes on
price with other major importing countries and does so more at the retail level than the wholesale
15
Farmer, 2010.
21
Level. When the LMD market research team inquired of wholesalers and retailers as to why
Ethiopian meat cannot command a higher retail price in the Dubai market, they were told that the
local consumers do not fully trust the Halal certifications coming out of Ethiopia as much as they trust
such certifications from Somalia and Pakistan.
Table 8: Wholesale and Retail Prices for Competitor Countries16

Competitor Whole Selling Price Retailers Selling
countries Price
Pakistan 18-19AED/Kg 30 AED/KG
Indian 18-19 AED/k 30AED/KG

Kenya 18-22 AED/kg 28-30AED/KG
Tanzania 18-22 AED/kg 35AED/KG
Ethiopia 22-23 AED/kg 28-30AED/KG
MARKET SUMMARIES
Domestic High-End Market for Meat
Ethiopia currently imports a little over 19 MT17 of meat per year – largely sold in high-end outlets
such as luxury hotels and supermarkets. There is a limited opportunity to displace these imports as
well as grow existing sales that target high-income households. Supermarkets mainly sell raw as well
as process beef (sausages) and by-products directly to consumers. They purchase carcasses from local
and export abattoirs and undertake further processing and packing activities on their premises. There
are 120 supermarkets that retail beef and beef by-products in Addis Ababa alone. There is also a
market for mutton, primarily tied to holidays such as New Year, Christmas, Easter, Ramadan and
Arefa. For mutton the domestic market prefers highland sheep between the ages of 2 to 3 years old.
Market requirements
High-end consumers prefer low-fat Borena and Hararege beef. Some packaging with foils and other
materials is currently practiced and consumers purchase both fresh / chilled and frozen meats. Many
local consumers also require ‘halal’ product due to religious considerations.
Egypt - Beef
Egypt imported over $1 billion worth of meat in 2011, a significant increase from levels the $500
million that was imported in 2008 and 2009. Brazil, USA and India supplied the majority of this meat
with Ethiopia contributing less than 1% of Egypt’s import requirements. Meat from Ethiopian and
Sudanese cattle are sold at the same price as with local Egyptian buffalo meat - at approximately LE
40.00 per kg (USD 5.85) which is the highest price offered for meat in the retail markets visited by the
LMP market research teams. Egyptian importers and consumers are increasingly price-sensitive and
have recently stopped imports from Ethiopia due to the recent hike in prices.
Market requirements
The Egyptian market prefers deboned fresh and tender chilled meat with two weeks shelf life without
changing color. Borena cattle and camel are consumed frequently and sheep and goat are demanded
seasonally during Muslim holidays. Meat must be labeled from where it originates so that consumers
16
Interviews with wholesale and retail agents in Dubai, February 2013
17
UN ComTrade.
22
can choose the meat that best meets their taste requirements. Importers emphasize the need for
consistent price, quantity and quality.
Packaging requirements for Egypt are fairly standard whereby meat needs to be wrapped with food
grade plastic.
Additional market dynamics and logistics channel details are presented in Annex 3 of this report.
United Arab Emirates – Mutton, Goat Meat, Beef

UAE’s appetite for meat has increased 30% between 2008 and 2011. The country imported over $1
billion worth of meat in 2011, of which Brazil, Australia, USA and India supplied more than 80%18.
Ethiopia was the 6th largest exporter of meat to the UAE with 4% market share (which is double the
market share of 2% achieved in 2009). Quality is a major concern for the UAE market…one in
which Ethiopian meat has a damaged reputation. As such, Ethiopian meat is usually re-packaged as
Indian, Pakistani or Somali due to low acceptance by consumers of Ethiopian meat. Middle and
lower income classes continue to buy Ethiopian meat, however.
Market requirements
Goat meat should come from young animals with low fat content and packaged in 6-8 kg packages -
preferably from low land animals (pinker meat vs. red), especially from the Borena, Bale, Methara
and Somali areas.
Export abattoirs need to be approved by the Dubai Municipality. Approval depends on a number of
hygienic and health factors as well as whether the abattoir uses the halal slaughtering procedure and is
certified by the regional Islamic council.
Angola – Frozen Borena Beef

Angolans eat meat at least once a day, most of which is imported ($750 million of imports in 2011).
Imports of meat have increased 65% between 2009 and 2011, most of it coming from Brazil, USA,
India and Portugal. There is sufficient demand and interest from importers to increase imports of
Ethiopia frozen beef; however, quality concerns must be addressed to ensure re-entry to the market
and long-term growth. Prices must also come down relative to quality.
Market requirements
Meat that is tender and hygienic; packaging materials to protect contents. Angola meat import criteria
are more relaxed than Middle Eastern markets.

Ethiopia has excellent potential to increase its consumption and export of meat and meat products.
Increasing Borena beef exports, expanding commercialization of production and marketing of
livestock, diversifying into other products such as the processing of sausages and other similar types
of meat and boosting domestic consumption are important strategic growth opportunities for
Ethiopian meat producers. Poor product quality is the most pronounced concern to be addressed,
followed by improving price competitiveness and strengthening business relationships. Most of the
recommended actions to improve the marketing of live animals will also contribute to increasing the
18
Sullivan, 2009
23
quality of Ethiopian meat, such as improving traceability systems, moving toward specialization of
cattle-raising and improving feed, breeding and vaccination practices and improving the transparency
of livestock trading systems. In addition, the following specific actions are recommended for the meat
industry.
Address quality concerns – Above all, end markets complained about the poor quality of
Ethiopian meat. In addition to improving the production and trade practices within Ethiopia
which will require uprooting well-established systems and traditions, the following steps are
necessary to improve quality:
o Improve conditions and slaughtering procedures at abattoirs – Procedures should be
improved to minimize animal stress and foster sanitary practices that adhere to halal
certification thereby minimizing the spread of bacteria or other undesirable foreign
objects on the carcass. Quality control systems should be introduced at every step of
animal / carcass handling.
o Improve skill levels of technicians responsible for deboning, cutting and packaging –
Technician training, investment in technology upgrades and use of better packaging
materials (tailored to end markets) are necessary.
o Improve cold chain and logistics management – A number of investments are
necessary to improve the cold chain, including investment in refrigerated “reefer”
trucks, chill facilities at abattoirs, chill facilities and transport procedures at Bole
Airport in Addis Ababa.
Strengthen business relationships – Importers have negative opinions of Ethiopian business

ethics (viewing Ethiopians as opportunistic sellers and unresponsive to market demands).
Instilling a greater degree of market-focused professionalism in Ethiopian exporters and
fostering relationships with end market importers will be needed to build trust (and sales
volumes) over time.
Improve branding efforts – With improved quality achieved through the steps outlined
above, Ethiopia has to repair its damaged reputation and improve consumer awareness of its
meat products. Competitors of Ethiopian meat such as India, Pakistan, and Brazil undertake
aggressive promotional campaigns (and oftentimes provide export incentives). In order for
Ethiopian meat to be recognized as its own product (and not of someone else’s) that can be
retailed on its own merits of quality at competitive prices, more aggressive marketing and
(national) branding is necessary.
24
LEATHER AND LEATHER PRODUCTS
MARKET S FOR ETHIOPIA’S LEATHER AND LEATHER PRODUCTS
Export
Exports of Ethiopian finished leather are strong and growing. Currently export of leather is
increasing both in terms of volume, from USD 93 million in 2007 to USD 122 million in
2011.19One reason is due to the increasing demand from the international markets for leather
– and in the case of Ethiopia – leather from the skin of sheep. Another is that the Ethiopian
tanneries have been investing in better technology and delivering higher quality products with
much of this investment coming since the Government began applying an export tax in 2008
on semi-finished leather.
Figure 4: Ethiopian Imports and Exports of HSL20
$140
Exports, Raw Hides,
$120 Skins and Tanned
Leather
$100
Imports, Raw Hides,
$80 Skins and Tanned
Millions
$60 Leather
Exports, Leather
$40 Products
$20
$0 Imports, Leather
Products
Informal activities in Ethiopian HSL industry are significant. Illegal traders smuggle out
raw skin and hide to neighboring countries to get higher price especially to Somaliland where
there are Chinese tanneries just over the border. The LMD research team learned that there is
also a widespread belief in Kenya that shoes exported from Ethiopia are entering Kenya
illegally through the common border town of Moyale. The reportedly long import and export
procedures between Ethiopia and Kenya may contribute to this problem.
Knowledge of Ethiopian leather products is minimal at end market destinations.

Although producers of finished leather products in countries such as Italy and China know
about the quality of Ethiopian sheep leather, consumers do not.
Domestic
Growing domestic market for value-addition of leather. There are also strong growth trends
for finished leather in the domestic market from leather product manufacturers (largely for
export). This is partially driven by a recent government policy of levying an export tax of
150% on semi-finished leather with the aim of increasing the producing and export of finished
leather. Prior to this policy being enacted, Ethiopian tanneries exported semi-processed
leather, particularly wet blue, pickle and crust, in large quantities. Such exports created a
shortage of finished leather available to the local market, thereby discouraging value-addition.
19
UN ComTrade
20
IBID
25
Domestic demand for finished leather products (shoes, bags, jackets) is low but growing.
Leather products are considered luxury items and are not consumed by the average Ethiopian
citizen. However, the Ethiopian footwear market is increasing in size – an opportunity which
the Ethiopian shoe industry seems not to be fully grasping. Large volumes of low cost (and
low quality) new footwear from China and Turkey are being imported into Ethiopia, and
second hand sports footwear is also being imported in illegal cross-border trade across the
Ethiopia-Kenya border, competing with locally manufactured footwear.
MARKET REQUIREMENTS AND ETHIOPIA’S PERFORMANCE

Ethiopian prices have increased in price-sensitive markets Prices of leather have increased
over the last several years yet producers and consumers in target markets are price sensitive.
Ethiopian exporters are not keeping up with the changes in price requirements, causing a loss
of market share to competitors from China, Pakistan and India, for instance. Insufficient
supplies of raw material, low economies of scale and inefficiencies in the supply chain for
hides and skins are driving factors in pushing up costs.
Ethiopian exporters are not always able to deliver as promised: Leather products are subject
to the whims of the fashion industry – a highly seasonal and ever-changing industry. Some
importers complained that Ethiopian producers are not always well organized and cannot
deliver orders as contracted out. Importers of finished leather and leather products from
Ethiopia (particularly in Italy) complained about the lengthy process and time required for
both imports of raw materials into Ethiopia and exports out of Ethiopia. The following
example from Krinas (an Italian supplier of raw materials to Ethiopian leather manufacturers)
illustrates the typical problems incurred for imported items:
It takes around one month to get a license to import raw materials (accessories, chemicals
and other inputs to the leather and leather products industry), due to the need for the
government to allocate foreign exchange for the import of goods from abroad. Krinas orders
and ships goods to Ethiopia (raw material needed to produce shoes) within about one and
half months from the order being made by Ethiopia. Krinas usually waits until the import
license is issued by the Ethiopian government before preparing the order. So therefore, if the
Ethiopian company orders raw materials from Krinas on January 1, Krinas will order the
goods and consolidate the shipment between February 1- March 15 (with the period of
January 1 to the 31st being the time it takes to get the import license). The goods would then
be shipped to Djibouti and arrive around 10 April. The goods would finally arrive in Addis
Ababa by the end of April. Krinas has experienced delivery times of as long as five months,
from the moment of applying for the import license to when the goods arrive in Ethiopian
factory.
Figure 5: Steps and Duration of Shipping Materials from Italy to Ethiopia

Stage Weeks 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Krinas of Italy applies for import license 1
Government of Ethiopia allocates foreign exchange and issues license
Krinas prepares goods for shipment to Ethiopia
Goods in Transit from Italy to Djibouti
Goods transported to from Djibouti to factory in Addis Ababa
Sizes of Ethiopian skins are smaller than those sought in export markets. The average size
of an Ethiopian hide is 22 -24 square feet while the average European hide is about 50 square
feet; more than double the size of Ethiopian hides. A larger hide offers a ‘better cut value’ and
hence more flexibility to produce a wide range of products including upholstery leather for
the automotive and household furniture producing industries.
26
ETHIOPIA’ S ADVANTAGE S AND OPPORTUNIT IES IN THE MARKETPLACE
Ethiopian sheep leather is of high quality Ethiopia has one of the highest quality sheep
leathers in the international market with the main competitors being Pakistan, India and
Nigeria, all of whom produce and market leather of similar quality.
The quality of Ethiopian shoe production is good. Ethiopia produces good quality stitching
for shoe uppers and much of the leather and suede produced in the country effectively
competes with countries such as Bangladesh, particularly in European market for the classic
men’s black shoe. Manufacturing techniques, however, require improvement before the
country can compete in middle and high-end markets, particular the fashion market.
Ethiopia’s huge population of livestock provide a potentially large source of raw materials.
With one of the largest livestock populations in the world, Ethiopia should essentially not
have any problem accessing sufficient raw material to feed into a thriving leather industry –
but it does. Most tanneries are operating at less than 50% of utilized capacity and some
tanneries have even resorted to importing semi-processed hides and skins to meet their market
demands.

Ethiopia is competitive in the domestic market as well as in some regional and international markets.
Both Italy and Turkey, the two leading producers of leather products in Europe, could be seen as
competitors to Ethiopia. In reality, however, their leather goods industries demand so much leather
that they are also potentially large customers for Ethiopian tanneries and leather goods
manufacturers. For instance Italy imports more than USD 6 billion a year in leather-related goods
while Turkey imports over USD 2 billion per year. Much of these imports come from Asia, but both
Turkish and Italian investors have made investments in Ethiopia and others are exploring investment
opportunities.
The size of domestic Ethiopian footwear market is increasing in size but the Ethiopian shoe industry
seems to be unable to make full use of this opportunity. Large volumes of low cost, imported new
footwear from China and Turkey, and second hand sports shoes are imported in illegal cross border
trade via Ethiopia-Kenyan border and sold in the domestic market. These imported items compete
with locally manufactured footwear. However, local consumers are becoming aware that such low
cost imports are often of very low quality especially shoes imported from China.
INDIV IDUAL MARK ET SUMMARIES

Kenya – Finished Leather and Manufactured Leather Products
The Kenyan leather industry offers a good opportunity for Ethiopian tanneries to export finished
leather for use in Kenyan footwear and leather goods factories. The Ethiopian tanneries can compete
with others in the Kenyan market on price and quality. The challenge for Ethiopian tanneries is to
access enough quality hides and skins to produce enough leather for this export market.
Ethiopian shoe exports target the lower income group and have historically been successful in Kenya
and could grow. There is need to maintain the quality of the product and remain price competitive to
compete in this market segment. It would also be possible to expand to other segments of the market
such as a) supplying shoes to middle income consumers, b) market safety and work boots, c) shoes
that go with school uniforms, and d) leather garments and specialty goods including wallets, belts,
document cases, and ladies purses. The demand for these products is mainly being satisfied through
imports. Furthermore, as part of the East African Community (EAC), Kenya could serve as a gateway
to other East African markets such as Uganda and Tanzania.
27
Market requirements
Maintaining product quality, remaining price competitive and customizing design to meet market
demand are key requirements to compete in the Kenya market. Ethiopian leather manufacturers have
not conducted any market research or designed market strategies to maintain and increase their market
share in Kenya. Small shoe manufacturers do not have sufficient first-hand information about the final
consumers they are serving. Consequently, the shoes that are being sold in Kenya are not based on the
tastes and preferences of the Kenyan consumers and may not be effectively targeting the most
lucrative market segments .
Additional market dynamics and logistics channel details are captured in Annex 6 of this report.
Turkey – Finished Leather and Manufactured Leather Products

The Turkish leather industry is a net exporter of finished goods and a net importer of raw materials.
The demand for finished leather by the leather products industry is met by local production and
imports. As the leather goods industry continues to expand, its demand for leather is increasing and
the industry is looking for alternative sources of finished leather from its traditional suppliers like
Italy, China, India and Pakistan. This is the window of opportunity for Ethiopian tanneries to
penetrate this large finished leather market.
Ethiopian products that have market potential in Turkey include:
Finished lining for shoes from cow, sheep and goat;

Goat suede uppers for the Turkish footwear industry.
Classic shoes for lower income segments of the Turkish population; and
Fashion and working gloves.
Market requirements
High-quality finished leather from tanneries at competitive prices: Turkey is a well-developed
market that produces world-class consumer products. They maintain strict international standards in
price, quality and delivery requirements. To succeed in this market, Ethiopian producers will have to
deliver at a level that meets or exceeds that which they meet in other markets in which the country’s
producers operate.
Although the Ethiopian hair sheep skin has fine grain structure that makes it suitable for garment
production, the sheep nappa garments currently produced from Ethiopian sheep skin is of lower
quality than what is being used by the Turkish garment industry. Ethiopian tanners need to improve
the quality of their finishing and offer attractive prices to gain a foothold in this market.
Italy – Manufactured Leather Products

Italian leather product companies already have long-standing relationships with Ethiopia and view
Ethiopian exporters as having great potential to grow in the European market for finished leather
products, particularly shoes. Ethiopia imports raw materials (finished leather and accessories) from
Italy to incorporate into its leather products manufacturing and often re-exports finished products back
to Italy. There is great potential to grow the volume traded, but a number of challenges exist, largely
with respect to quality control, manufacturing management and techniques, and governmental
regulations and customs procedures.
Market requirements
Both imports of raw material into Ethiopia and exports of finished product require lengthy
governmental processes. It takes one month to get a license to import raw materials into Ethiopia and
28
a letter of credit, because the government of Ethiopia will only give an import license if there is
enough foreign exchange available and allocated. For goods imported through Djibouti, the
Government of Ethiopia requires transportation of containers from Djibouti to one of the Ethiopian
dry ports via Ethiopia Shipping Lines (ESL), a government-run and owned company. This company
is notorious for delays – sometimes taking months after goods arrive into Djibouti before they are
delivered to the consignee in Ethiopia.

The Ethiopian leather industry has significant potential to become a higher volume and world class
supplier of high quality finished leather and leather products including shoes, garments, gloves and
accessories. Foreign investors have been increasingly discovering Ethiopia’s potential and the
government of Ethiopia has made the leather and leather products value chain among the top four
priority industries in the country due to its 1) strong backward linkages to the rural economy,
contribution in alleviating poverty, and 3) its potential for increasing exports and hence the flow of
foreign currency into the economy. If the industry players can move beyond the challenges of raw
material quality and supply, the Ethiopian brand of leather production has unlimited potential for
growth in the coming decade.
Improve quality of hides, skins and finished leather – The Ethiopian HSL industry should
aim to improve the quality of its hides, skins and finished leather along the following lines:
o Improve technology for splitting hides which will not only improve the quality, but
also reduce costs. Improving extension systems for backyard slaughtering / hide sales
may also be useful if it could be delivered in a cost-effective manner.
o Improve workforce skills in tanneries – Provide training to the tannery workforce in
proper finishing techniques and management practices.
o Take actions to improve control of diseases, especially ekek. Although the industry
and government have tried addressing this issue in the past, the problem has not been
resolved and firm action must be taken to address this major problem.
Improve quality of manufactured leather products – Ethiopia needs to improve its

production techniques – through technology upgrades, establishing warehouses with spare
parts, and improved training of the workforce. .
o Technology upgrades – According to Italian importers, Ethiopian factories do not
prepare the pieces for stitching well because they do not always use the right
equipment.
o Spare Parts - Ethiopian factories rarely have spare parts in the country requiring
anywhere from 6 to 12 weeks to import spare parts when machines break down. The
industry could join forces to establish a warehouse of supplies and common spare
parts to improve recovery time when machines break down.
o Technical knowledge – Repairs of machines are inefficient not only due to the lack of
spare parts and tools, but also due to the lack of technical knowledge on how to
operate and repair the machines.
Develop customized marketing strategies per end market and market segment – The
Ethiopian leather sector must develop well researched and thought-out market entry (and
maintenance) strategies to gain market share in targeted end markets. The market
opportunities for export of leather products from Ethiopia should be further researched to
further identify products that have market potential, market segments to target, understand the
trade channels, identify major players and design marketing strategy to penetrate the market.
29
Such market research should also help to identify major companies in the chain who are
willing to source leather products from Ethiopia and establish business relationship. Generally
there is a lack of understanding of fashion concepts and how consumer preferences shape
what is produced by Ethiopian leather products manufacturers.
o Improve domestic marketing channels for raw hide and skin collection by putting in
place appropriate means of transportation, storage as well as marketing systems.
There are logistics problem with sourcing hides and skins from rural areas that lead to
high transaction costs. There is no organized supply collection system.
Reduce / streamline cumbersome government regulations for imports and exports of

leather products – The Government of Ethiopia requires licenses for both imports and exports
of goods, even for small amounts of inputs required to produce sample shipments for potential
buyers. These reportedly take approximately one month to obtain. There are also reported
delays at customs even after obtaining the proper licenses. Cumbersome and time-consuming
government regulations indirectly encourage illicit trade of raw skins, hides and leather
products. One Chinese tannery has set the precedent of developing an agreement with the
Government of Ethiopia permitting that Chinese goods cannot stay in customs any longer
than one day. Finally, the government requirement to transport all goods from Djibouti to the
Ethiopia dry port via Ethiopia Shipping Lines (ESL) is not efficient and needs to be relaxed to
allow more competition into this market to provide transport and logistics services.
Actively promote Ethiopian finished leather and leather products at industry trade shows
and targeted end-market destinations such as Turkey, Italy and Kenya – Knowledge of
Ethiopian-branded leather products is minimal at end market destinations. Efforts to promote
Ethiopian products could be an effective strategy to raise awareness and increase market
share. Some of the trade shows of interest are the leather products trade show in Bologna
(May and October) and other smaller trade shows in Italy in March, September, January and
June. Turkey also holds leather products trade fairs and East Africa also has a number of
trade fairs. Trade fair participation and trade missions could / should be organized by the
Ethiopian Leather Industry Association and supported by USAID- LMD.
30
DAIRY (DOMESTIC ANALYSIS ONLY)
MARKETS FOR DAIR Y
Ethiopia’s milk markets are essentially domestic. There is some cross-border trade, mainly
informal in nature.
o Metema / Sudan route end market - mostly cow’s milk imports from Sudan
o Dire Dawa / Djibouti route end market - There is no formal legal export trade in dairy
products by this route, but some camel’s milk is formally exported from this area via
the Togochalle route.
o Jijiga/Togochalle / Somali Land route end market – A significant amount of camel’s
milk exported via this route, both formally and informally, for Somali consumption.
Formal (legal) export of camel’s milk is on average between 1600 and 2500 liters per
day, at a price of USD 0.081/liter. In the 2011/12 fiscal year, a total of 1,180,332
liters of milk was legally exported and USD 146,070 earned from this export market.
1,019,490 liters of camel milk were exported in the last six months of the current
fiscal year.
Per capita consumption of dairy is very low in Ethiopia, well below international benchmarks.
At 19 liters per annum, per capita, annual milk consumption is well below the world average of
105 liters and the African average of about 40 liters.21 A brief survey conducted for this EMA22
across four cities showed wide variation in consumption - Addis Ababa has the highest
consumption, at 51.83 liters per capita, while Dire Dawa, Awassa and Bahir Dar average only
4.42 liters per capita.23
Various factors act to depress demand for dairy products:
o Many middle and low-income consumers interviewed stated that price of milk is
very high, and that they are finding it increasingly difficult to purchase milk and milk
products. About 92% of the cafeterias/hotels and 91% of consumers interviewed cited
very high price of dairy products as a major challenge. Raw milk purchased in urban
areas costs 7-14 ETB/liter (USD $0.38-$0.76).24 Pasteurized milk can cost more than
16 ETB (USD $0.87) per liter, which is unaffordable for most households.25
o Fluctuations in the demand for milk and other dairy products, because of the
various fasting periods, during which Orthodox Christians (comprising 43.5% of the
population, 59.1% in Addis Ababa26) who are observant will abstain from consuming
all kinds of animal products. Demand drops during the long fasting seasons of
Kudade (55 days, usually in March/April) and Filseta (16 days, in August).
Wednesdays and Fridays of every week are also fasting days. There about 200 fasting
days in a year.
o Producers report a 50% drop in their milk sales during the major fasting periods.
During these periods they process milk into butter and cheese, which have longer
21
FAOSTAT
22
Because of the small sample size the surveys conducted for this dairy end market analysis should only be
considered to be indicative.
23
Because of the relatively small sample size, this data should only be considered as indicative of consumption
patterns.
24
Ibid.
25
LMD Research, 2013
26
CSA, 2007
31
shelf lives and can be sold after the fasting period. Both milk and other products are
sold at significantly lower prices during this period.
o In the highlands milk is traditionally considered to be a food item which is essential
only for babies and convalescent persons. Its nutritional benefits for adults tend to
be overlooked. As a result, the value attached to milk’s consumption is limited.
Most milk is marketed informally. Estimates suggest that 90% of the milk supplied to the Addis
Ababa market and 95% to the national market passes through informal marketing channels – all
unprocessed.27
Dairy products reach the consumer through several market channels:
o Smallholder producers sell their dairy products directly to consumers in nearby

neighborhoods and towns, or indirectly through other intermediaries, such as collection
cooperatives and processors (the latter buy the milk at temporary collection centers
located along major highways passing near villages).
o Urban and peri-urban producers sell directly to processors, cafeterias, hotels,
supermarkets and retail shops, or to cooperatives. The urban and peri-urban production
systems includes many market-focused smallholder producers located close to and
supplying urban centers – most importantly, Addis Ababa. These dairy farms distribute
fresh milk to processors, cafeterias, hotels, supermarkets and retail shops. There are
approximately 3,000 such smallholder dairy farms around Addis Ababa.28 More
productive, progressive small-scale farmers in the various milksheds sell their milk to co-
operatives and commercial milk collectors and processors.29
o Cooperatives sell milk and milk products to processors, cafeterias, hotels, supermarkets,
retail shops or final consumers. Dairy production and marketing cooperatives collect fresh
milk either from their members or other small holder famers in their area and resell it to
processors, cafeterias, hotels, supermarkets, retail shops or final consumers. In 2010 there
were 114 primary dairy cooperatives and 8 dairy unions operating in Addis, Lake Tana,
Mekele and Humera milksheds.30
o Commercial producers sell to large processors. Specialized, commercial dairy farming is
concentrated in the central highland plateau. The farms are mostly located around major
cities and towns with high demand for milk and having population of more than 10,000.31
Commercial dairy farmers usually sign annual contracts to supply fresh milk on a daily
basis by directly transporting it to the processor’s factory or collection center. Some
processors (like Sebeta Agro Industry PLC and Timret Agro Industry Share Company)
also have their own dairy farms as sources of fresh milk supply.
o Processors distribute their milk and dairy products to retail shops, supermarkets,
restaurants and cafes and hotels located in major urban centers. In 2010 LOL estimated
that there were more than 2500 kiosks, and many milk shops, selling milk and milk
products.32
27
Land O’ Lakes, Inc., 2010
28
Addis Ababa Urban Agriculture Office
29
LMD research 2013 and MoARD, 2008
30
Land O’Lakes, Inc., 2010
31
Ibid
32
Ibid.
32
MARKET REQUIREMENTS AND THE VALUE CHAIN’ S PERFORMANCE
Urban markets receive insufficient quantities of milk. Production and logistics constraints limit
the supply of milk:
o Low productivity levels, caused by limited use of crossbred cows, and poor feeding and
other management practices. Shortages of milk are more severe during the dry months of
April and May. Also, the low fat content of the milk yields relatively small portions of
butter and cheese (e.g.: 25 liters of milk yields only one kg of butter and two kg of cottage
cheese).
o Urban expansion of Addis Ababa and other cities and towns have crowded out dairy
farms and providers of feed supply.
o There are few large scale commercial dairy farms in the country. Large producers have
the ability to invest in productivity and in logistics, and to achieve economies of scale.
o Because of the low productivity per cow and logistics barriers in getting the product to
market, most production is consumed at the household level. Of the total national annual
milk produced in 2011/12 production year, only 4.69 percent was sold to the market; the
rest was used for household consumption (46.61%), in-kind wage payments (0.35%) and
other purposes including production of butter and cheese (48.36). On the other hand,
34.46% of butter and 12.96% of cheese produced in the same period was supplied to the
market33.
Milk Quality is often not maintained, and not trusted by consumers. Long transport
distances, use of local transport, the time required to reach market, and poor handling result in
reduced milk quality, contamination and spoilage. Up to 20-35% of milk is spoiled or
otherwise lost.34 There are reported cases where smallholder producers and collectors and/or
their employees will mix water (which in itself may not be safe to drink) to increase the
volume. There is only a very limited cold/chill chain in the form of refrigerated trucks or
cooling centers. Also, many retail outlets are not adequately equipped with cooling facilities.
There are no mandatory Ethiopian standards related to dairy production and processing. Non-
mandatory Ethiopian standards exist for: Unprocessed whole/raw cow milk (ES 3460: 2009),
Yoghurt and Sweetened yoghurt (ES 3468:2009), Cream (ES 3466:2009), Butter-
Determination of moisture (ES ISO 8851-10-1: 2009), non-fat solids and fat contents
(Routine methods) and Pasteurized liquid milk (ES 3462:2009). However, these standards
are reportedly not complied with by any of the producing or the processing firms. Currently
there are no ISO or HACCP certified domestic dairy producers or processors operating in
Ethiopia.
Domestically processed milk products are considered to be of suspect quality, and inferior
to imported products. This is due to concerns about spoilage, adulteration and contamination
risks during transportation and handling. These erode consumers’ confidence in domestic
dairy products.
Dairy products are often sold without conforming to packaging and labeling requirements.
All major dairy processing firms pack and label their products in line with the mandatory
Ethiopian standard for the labeling of prepackaged foods (ES 359:2006). However, non-
formal milk sales typically do not adhere to this standard.
Milk is unaffordable to many, especially to the middle class and populations at the base of
the pyramid.
33
CSA, 2011/12, Agricultural Sample Survey Report on Crop And Livestock Product Utilization
34
Felleke et al, 2010
33
VAT and import duties add to the cost of milk and milk products. Conversion of milk to
butter, yogurt and cheese is considered to be value-addition, and is subject to a 15% value-
added tax (VAT). High import duties are imposed on the import of equipment, improved
breeds, and other inputs.
Milk availability is inconsistent - Maintaining continuous supply of the required types and
quantity of products to customers is also an area of concern – because of inefficient and
unreliable milk supply systems.
PROSPECTS FOR MARKET GROWTH
Demand is expected to increase over time, particularly in urban areas. Population growth,
urbanization and rising income levels will all contribute to greater demand for milk and milk
products. A 2010 analysis projected that urban and peri-urban demand for milk and milk
products will increase dramatically through 2020, and beyond.35 This demand was estimated
to increase by 37% (low estimate) to 148% (high estimate, with nationwide consumption per
capita of 27 liters).
COMPET IT ION TO T HE F ORMAL MILK V ALUE CHA IN
Ethiopia is a net importer of dairy products. The value of imports of dairy products (in
ETB) increased by almost 140% during the period 2005-2010 (Table 9).36 The volume of
imported dairy products reached 1829 MT in 2011 (mostly milk, but also cheese and
butter).37 A number of imported dairy products are available in Ethiopian supermarkets and
retail shops. Imported dairy products mainly used to include powdered milk, ghee, and
various varieties of cheese. More recently imported homogenized/UHT milk, which has
longer shelf life, is also being important and is sold in some supermarkets at very high prices
(50 birr per liter, more than double of the price of locally produced pasteurized milk).
Quality considerations challenge Ethiopia’s ability to compete. Imported dairy products are
viewed by consumers as being of better quality and safety than Ethiopian products.
Milk purchased through informal channels is less expensive than processed milk.
Processed milk must compete on the basis of a number of factors – quality, availability,
packaging and price.
Table 9: Imported Milk and Milk Products (KG)38

Product 2005 2006 2007 2008 2009 2010
Cheese 1,717,567 2015,762 2,806,279 3,345,196 2,008 2,562,465
Butter 101,677 302,830 503,183 819,724 193,716 1,427,421
Yoghurt &
other butter 308,643 4,432,118 1,016,963 1,512,661 303,559 226,742
milk
Milk and
46,823,409 63,035,855 48,546,567 77,191,210 99,852,788 114,343,334
cream
Total 48,951,297 69,786,565 52,872,991 82,868,791 100,352,071 118,559,962
35
Land O’Lakes, Inc., 2010
36
Ibid.
37
UN Comtrade, 2011
38
Ethiopian Customs Authority as cited in Land O’Lakes, 2010
34
1. Promote increased consumption to grow sales and encourage supply. Advertising, and
building awareness of nutritional benefits, should contribute to growth. Improving
availability and quality will also build demand.
2. Improve the quality of the milk to develop consumer confidence and grow the market.
Improved quality should also encourage substitution of locally produced and processed milk
for imports. Amongst other actions, improving collection, handling and transport, cold chain
and enforcement of standards will all contribute to quality improvement.
3. Lower costs (and hence prices), to improve affordability and grow the market. Costs can
be reduced by, amongst other means, improving yields, reducing waste and spoilage, and
improving economies of scale in production, logistics and processing. Improvement of
relationships between producers and processors can be a vehicle for lowering costs and
improving quality - for instance to ensure collection, cold chain, embedded services and
quality management.
4. Introduce new products and packaging that cater to the consumption patterns of
different consumer segments, that extend shelf life, and that meet the price points of
middle and low income customers. Smaller packaging, single use packaging, ready-to-
drink packaging and similar products can improve affordability and help consumers avoid
spoilage. Products such as UHT and powdered milk will be alternatives to consumers without
refrigeration.
35
ANNEXES
Annex 1 includes additional export and import data for Ethiopia. Annexes 2-8 summarize of the main
findings in the individual country and domestic end market analysis reports, carried out by LMD
country teams, Precise and BCaD between January and March 2013.
Annex 1: Ethiopia Export and Import Data by Value Chain .............................................................. 37

Annex 2: Angola Summary Market Analysis for Livestock Products ................................................ 40
Annex 3: Egypt Summary Market Analysis for Livestock Products .................................................. 43
Annex 4: Democratic Republic of Congo Summary Market Analysis for Livestock Products.......... 50
Annex 5: Italy Summary Market Analysis of Livestock Products ..................................................... 55
Annex 6: Kenya Summary Market Analysis of Livestock Products .................................................. 61
Annex 7: Turkey Summary Market Analysis of Livestock Products ................................................. 67
Annex 8: United Arab Emirates Summary Market Analysis for Livestock Products........................ 74
Annex 9: Contacts for Dairy Domestic EMA ..................................................................................... 79
36
ANNEX 1: ETHIOPIA EXPORT AND IMPORT DATA BY VALUE
CHAIN
Table 10: Ethiopia Trade Data for Meat (HS 02), 201139
Meat
Imports Exports
Market Value Market Value
TOTAL World $ 297,872.00 World $ 77,210,231.00
1 USA $ 117,795.00 UAE $ 43,781,550.00
2 Australia $ 56,024.00 Saudi Arabia $ 23,185,089.00
3 Italy $ 41,308.00 Angola $ 3,774,428.00
4 South Africa $ 32,502.00 Egypt $ 1,780,160.00
5 UAE $ 32,183.00 Bahrain $ 1,309,232.00
6 China $ 4,964.00 Turkey $ 948,657.00
7 Saudi Arabia $ 4,635.00 Kuwait $ 863,722.00
8 Belgium $ 3,659.00 Germany $ 424,623.00
9 Netherlands $ 2,969.00 Comoros $ 322,854.00
10 France $ 1,151.00 Viet Nam $ 296,556.00
Table 11: Ethiopia Trade Data for Live Animals (HS 01), 2011
Live Animals
Import Export
TOTAL World $1,907,443 World $ 190,357,050.00
1 Netherlands $ 918,167.00 Fmr Sudan $ 68,595,915.00
2 South Africa $ 452,204.00 Somalia $ 45,318,941.00
3 Israel $ 288,005.00 Egypt $ 36,524,447.00
4 Kenya $ 112,001.00 Djibouti $ 10,409,316.00
5 USA $ 37,607.00 Saudi Arabia $ 7,746,818.00
6 Belgium $ 33,575.00 Yemen $ 6,335,939.00
7 France $ 31,659.00 UAE $ 5,658,517.00
8 India $ 12,671.00 Jordan $ 4,606,659.00
9 Iceland $ 8,879.00 Lebanon $ 3,176,681.00
10 Mexico $ 6,600.00 Kuwait $ 1,270,317.00
39
UN ComTrade. All subsequent trade data tables are sourced from UN ComTrade unless otherwise noted.
37
Table 12: Ethiopia Trade Data for Hides, Skins and Leather (HS 41), 2011
Hides, Skins & Leather
Import Export
TOTAL World $ 388,431.00 World $ 122,712,875.00
1 Ethiopia re-import $ 243,889.00 Italy $ 39,438,876.00
China, Hong Kong
2 $ 52,763.00 China $ 27,490,501.00
SAR
3 Malawi $ 35,142.00 India $ 16,850,639.00
China,
4 China $ 26,841.00 Hong Kong $ 15,089,389.00
SAR
United
5 Pakistan $ 14,235.00 $ 11,718,439.00
Kingdom
6 Germany $ 7,599.00 Indonesia $ 2,485,593.00
7 Italy $ 5,225.00 Germany $ 1,766,968.00
8 France $ 1,848.00 Turkey $ 1,293,379.00
9 Denmark $ 868.00 Romania $ 1,092,935.00
10 Japan $ 20.00 Thailand $ 641,294.00
Table 13: Ethiopia Trade Data for Leather Products (HS 42), 2011
Leather Products
Import Export
TOTAL World $ 7,330,858.00 World $ 675,654.00
1 China $ 6,214,046.00 Germany $ 421,784.00
2 India $ 299,588.00 USA $ 78,236.00
3 Senegal $ 145,982.00 Italy $ 58,047.00
4 Viet Nam $ 114,957.00 Hungary $ 57,829.00
5 United Kingdom $ 94,005.00 United Kingdom $ 35,914.00
6 Thailand $ 88,833.00 Canada $ 5,907.00
7 UAE $ 65,159.00 Kenya $ 2,687.00
8 Italy $ 51,022.00 South Africa $ 2,650.00
9 Turkey $ 31,958.00 Ireland $ 2,196.00
10 USA $ 31,280.00 Botswana $ 1,901.00
38
Table 14: Ethiopia Trade Data for Dairy Products (HS 04), 2011
Dairy Products
Import Export
TOTAL World $ 10,623,625.00 World $ 3,235,189.00
1 Netherlands $ 3,634,275.00 Fmr Sudan $ 1,722,523.00
2 Ireland $ 2,248,932.00 Djibouti $ 527,780.00
3 France $ 941,240.00 Norway $ 455,170.00
4 New Zealand $ 899,002.00 Somalia $ 176,148.00
5 Denmark $ 384,188.00 United Kingdom $ 109,547.00
6 Saudi Arabia $ 351,865.00 Saudi Arabia $ 77,141.00
7 Germany $ 350,592.00 Botswana $ 41,834.00
8 Belgium $ 326,751.00 Kuwait $ 41,523.00
9 China $ 297,278.00 Yemen $ 31,331.00
10 UAE $ 215,165.00 South Africa $ 20,886.00
39
ANNEX 2: ANGOLA SUMMARY MARKET ANALYSIS FOR
LIVESTOCK PRODUCTS
TRADE DATA
Table 15: Angola Trade Data for Meat (HS 02), 2011
Meat
Imports Exports
TOTAL World $ 749,588,000 n/a n/a
1 Brazil $ 302,663,000 " "
2 United States of America $ 208,345,000 " "
3 Portugal $ 36,799,000 " "
4 Netherlands $ 28,744,000 " "
5 Paraguay $ 19,904,000 " "
6 Belgium $ 14,533,000 " "
7 Mexico $ 11,523,000 " "
8 Canada $ 7,650,000 " "
9 Spain $ 5,633,000 " "
10 Turkey $ 2,312,000 " "
NB: Imports based on partner reporting; no export data available
EXPORT HISTORY
Beginning in 2010, Mr. Zull Adatiya’s import company has imported a total of 80 containers of
frozen beef from Ethiopia. The Angolan army is one of Mr. Adatiya’s largest customers.
MARKET SIZE AND TREN DS
At $8,700, per capita income in Angola is high and the country’s economy and population are
growing. According to the Economist, Angola’s annual average GDP growth rate between 2001 and
2010 was 11.1 percent.40
Meat: Meat production in Angola is very low. There is only one small-scale (government)
slaughterhouse in southern Luanda, which slaughters about 15 to 20 animals daily. The meat is used
for barbeque and grilled meat consumption, and not processed. Most imported meat from abroad is
frozen and/or processed. Angola’s countryside is sparsely populated and its domestic livestock
population is not very high.
40
< http://www.economist.com/blogs/dailychart/2011/01/daily_chart>
40
Angolans typically eat meat at least once a day, most of which is imported ($750 million in imports in
2011). Imports of meat increased by 65% between 2009 and 2011. There is sufficient demand and
interest from importers to increase imports of Ethiopia frozen beef. However, quality concerns must
be addressed to ensure long-term growth. Prices must also come down relative to quality.
The Angolan national army is a heavy consumer of frozen beef and maintains a daily demand of
1,800mt. Frozen meat sells in Angola shops between USD 11 and USD 27 per kilogram, depending
on the cut and quality. The price of a kilo of frozen beef from Ethiopia was USD 3.85. As indicated
in the table below in 2010/11, meat exported from Ethiopia to Angola has never exceeded 1,414.6
metric tons with a value of USD 4.8 Million.
Grilled meat is common in Angola. The per kilogram price of grilled meat can range from USD 20 to
USD 40 depending on whether it is purchased from a road side stand or a mid-level hotel.
Leather and leather products: Angola has hot climate for most of the year, and as such, consumers
generally do not use leather products, and instead wear light clothes. When interviewed, garment and
leather product markets expressed little interest in leather products. A sister company of an Ethiopian
meat importer tried to market Ethiopian leather products by showing samples, but there was little
interest. The LMD research team also brought samples of shoes, but also received little market
interest. This suggests that there is no substantial opportunity for Ethiopian leather or leather products
in Angola. The local abattoir discards the hides and skins after meat is collected.
KEY MARKET SUCCESS F ACTORS AND ETHIOPIA’ S PERFORMANCE
Market specifications and legal requirements for meat are quite relaxed compared to Middle Eastern
markets. Meat should be of quality that is tender and hygienic; packaging materials simply need to
protect contents. As the primary imported product in Angola is frozen meat, Ethiopia needs to
improve its cold chain logistics to deliver a product of good quality.
Mr. Adatiya reported that the quality of Ethiopian meat has deteriorated and must overcome a number
of setbacks. Mr. Adatiya contends that Ethiopian meat has a high moisture content that makes it
difficult to cook. He also says that it is comparatively low in protein, containing a higher ratio of bone
to muscle. Since Ethiopian cattle are slaughtered in old age after years of serving as draught animals,
the meat is less tender and requires longer cooking times. Mr. Adatiya also indicated that the meat his
company has imported from Ethiopia has not been packed properly.
Frozen meat producing export abattoirs use poor quality animals and have resulted in a negative
image of Ethiopian meat in the Angolan market. Mr. Adatiya believes that Ethiopian Borena cattle
would be of sufficiently high quality for the Angolan market, but the price is currently very high.
Table 16: Beef Prices in Angola (USD)
Frozen Supermarket Roadside (Grilled) Mid-Level Hotel High-End Hotel

(Grilled)
(Grilled)
$ 11 – 27 / kg $ 20 – 27 / kg $ 20 / kg $40 / kg $ 90 / kg
41
COMPET IT ION
Angola imports meat largely from Brazil, USA, India, Uruguay, Portugal and Argentina. As
mentioned above, importers complained that Ethiopian meat is lower in quality than that from other
countries.
Key informants indicated that frozen beef earns a high retail premium. Frozen beef from Paraguay and
Uruguay are imported at a cost of USD 3.3 per kilogram, while the retail price in a supermarket is
between USD 11 and 27.
LOGIST ICS
Meat is transported to Angola via air transport and sold through wholesalers with developed cold
storage facilities for retail to supermarkets, butchers, roadside markets and restaurants.
Flights from Addis Ababa to Luanda are 4 hours. Ethiopian Airlines has regularly scheduled flights
to Angola.41
OPPORTUNIT IES
Discussions with local importers revealed that they would be open to purchasing meat from Ethiopia,
provided they could be assured of a consistent supply of sufficiently high quality meat.
One possible advantage in the marketplace is consumers’ perception that Ethiopian beef is considered
“organic” – free range grazing.
MARKET ACTORS/CONTAC TS
There are a limited number of meat suppliers in Angola. Mr. Zull Adatiya and his partner Ms. Elini
are meat importers and were consulted for this study. They are senior Angolan meat buyers with more
than 20 years of industry experience, and know Ethiopia and its meat products. Mr. Adatiya supplies
meat to the Angolan Army. The Army has consumed Ethiopian meat in the past, but stopped buying
because of the decline in Ethiopian meat quality.
The LMD team also interviewed Mr. Mahir, a supermarket proprietor, and Mr. Zelalem, an importer
of Middle Eastern goods. The team also visited one supermarket, one wholesaler, one retailer shop,
the local slaughterhouse and restaurants.
41
<http://www.ethiopianairlines.com/en/booking/timetablex.aspx?departCity=LHR&destCity=LAD> accessed
4/5/13
42
ANNEX 3: EGYPT SUMMARY MARKET ANALYSIS FOR
LIVESTOCK PRODUCTS
TRADE DATA
Table 17: Egypt Trade Data for Meat (HS 02), 201142
Meat
Imports Exports
TOTAL World $947,386,459 World $7,493,600
1 Brazil $445,707,420 Kuwait $3,774,790
2 India $244,271,337 Viet Nam $856,741
3 USA $204,322,572 UAE $790,779
4 Australia $19,841,909 Qatar $520,587
5 Colombia $7,978,745 Libya $389,855
6 New Zealand $7,072,544 China, Hong Kong SAR $294,316
7 Canada $5,602,082 Lebanon $180,043
8 Poland $3,668,380 Bahrain $160,336
9 Denmark $2,671,539 Jordan $89,248
10 China $1,279,921 Syria $74,086
Table 18: Egypt Trade Data for Live Animals (HS 01), 2011
Live Animals
Import Export
1 Djibouti $29,682,506 Saudi Arabia $5,452,796
2 Australia $16,796,547 UAE $4,380,221
3 Germany $15,538,522 Kuwait $1,905,822
4 Croatia $15,321,802 Libya $209,751
5 Ethiopia $14,722,940 Jordan $141,960
6 Netherlands $7,816,793 Qatar $104,215
7 Hungary $1,339,343 Lebanon $99,107
8 Romania $516,233 Fmr Sudan $76,820
9 Ukraine $37,976 France $45,041
10 Libya $26,905 USA $37,086
42
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43
Table 19: Egypt Trade Data for Hides, Skins and Leather (HS 41), 2011
Hides, Skins and Leather
Import Export
1 Spain $3,830,851 Italy $39,386,215
2 Lebanon $1,902,876 Spain $36,048,347
3 Libya $1,381,531 Portugal $34,539,209
4 Italy $1,226,644 India $16,326,920
5 Slovenia $899,840 Turkey $6,316,076
6 USA $768,935 China, Hong Kong SAR $6,280,024
7 Iraq $738,237 China $4,836,389
8 Brazil $508,142 Indonesia $1,978,313
9 Canada $505,788 Tunisia $1,331,373
10 Germany $339,426 Rep. of Korea $963,756
Table 20: Egypt Trade Data for Leather Products (HS 42), 201143
Leather Products
Import Export
1 China $34,388,845 Italy $2,811,492
2 United Kingdom $2,060,797 India $767,124
3 Turkey $1,947,022 Portugal $339,598
4 Germany $1,314,296 Belgium $289,050
5 Italy $1,114,175 Greece $276,008
6 Spain $1,018,614 Saudi Arabia $264,884
7 United Arab Emirates $655,124 Jordan $224,257
8 India $453,142 Spain $145,521
9 China, Hong Kong SAR $443,494 United Kingdom $145,344
10 France $428,453 Yemen $112,184
EXPORT HISTORY
The Egyptian market has been flagged as a growth opportunity for both live animal and meat exports.
Egypt and Ethiopia maintain good relations and diplomatic efforts are being made by both sides to
increase trade flows. The current value of trade between the two nations is about USD 150 million.
Of this, the majority of the trade was comprised of higher value manufactured Egyptian products, thus
leaving a trade gap between the two nations.
Ethiopia has been exporting both meat and live animals to Egypt since 2005. LMD interviews
revealed that Egyptians like the taste profile of Ethiopian beef. Amalmisr is one of the primary
exporters of camel to Egypt. Pan Afric Trade has been a major buyer of Ethiopian live animals. They
had expressed interest in specializing in importing Ethiopian cattle, however they ceased import
activity in August 2012 due to price escalation.
43
UN ComTrade and International Trade Center Trade Map
44
Egypt exports crust and finished leather. There is interest among leather goods manufacturers for
Ethiopian leather, which they perceived as being of a high quality. However, hides and skins exports
to Egypt ceased in 2009, when the government of Ethiopia imposed a tariff of 150% on the export of
wet blue. Ethiopian manufacturers do not have experience selling finished leather to Egypt.
MARKET SIZE AND TRENDS
The Egyptian market mainly demands cattle younger than two years old and weighting between 220-
230 kg. Animals up to five years old are occasionally acceptable in periods of high demand. Egypt
imported USD 100 million of live animals and over USD 1 billion of meat in 2011, whereby Ethiopia
contributed to 14% and <1% respectively.
There is already a developed taste in the Egyptian market for Ethiopian meat. Rather than frozen
meat, the local market prefers deboned fresh and tender chilled meat that maintains its color for two
weeks of shelf life. In 2009, Pan Adric imported a shipment of Ethiopian meat was detained due to
rumors of disease threat. While the threat was eventually disproven, the negative reputational effects
are still felt and Pan Afric only imports live animals until Ethiopia’s reputation heals. In addition to
beef, demand for sheep and goat meat spikes during Muslim holidays.
Within Egypt, there are thousands of retail outlets. Ethiopian meat is distributed through 35 of the 350
retail outlets in Cairo under the supervision of the publicly owned Food Industries Company (PIC).
Egyptian manufacturers regard Ethiopian leather as being of high quality and demonstrated an interest
in importing leather from Ethiopia, were it not for the prohibitively high price.
Egypt’s only branding requirement is that the meat will always have to be identified from where it
originates. Fortunately, Egyptians like the taste of Ethiopian meat and Egyptian importers have
expressed interest in increasing their Ethiopian meat imports. However, they face several barriers that
prevent a consistent supply of quality meat and an efficient means of getting to Egyptian markets.
The Egyptian market is very price-sensitive. The escalating price of live animals from Ethiopia, rising
from USD 1,500 to USD 1,700 per ton resulted in reduced demand among Egyptian importers, who,
according to LMD interviews, considered a price of USD 1,600 as more reasonable.
Ethiopian Borena cattle and camels are the most highly regarded and Ethiopian beef is sold along with
Sudanese and local buffalo meat at LE 40.00 (USD 5.85) per kg, which is the highest price offered for
meat in the retail market.
Despite the high retail price, importers pointed to several factors that affect quality. These include an
inefficient transport system; fluctuations in the tenderness of meat due to insufficient quality feed,
lack of skilled manpower for deboning, cutting and packaging meat; an absence of commercially
oriented animal husbandry; and lengthy lead times between traders taking orders and stocking
animals.
Currently, Ethiopian animals are typically fattened only at old age after being used for traction. This
results in stiffness of meat and low meat density around bones. Importers recommended that animals
45
need to be fed from their early stage of growth to attain their maximum growth potential in a short
period, and that animals should be specifically bred and fed for meat.
COMPET IT ION
Brazil, USA and India are the primary suppliers of meat to Egypt. Collectively, they account for 94%
of Egypt’s official meat imports in 2011. For meat and live animals, Sudan is Ethiopia’s most
immediate competitor, though an estimated 1,000 head of cattle are illegally exported from Ethiopia
into Sudan each day, potentially accounting for a significant proportion of Sudan’s exports to Egypt.
As noted above, Sudanese and Ethiopian meat yield much higher prices than other imported meat.
The current price of deboned and chilled meat from Ethiopian animals is LE 40.00. Frozen meat from
Brazil and other countries is sold at LE 26.50 (USD 3.88).
LOGIST ICS
Live animals are transported via Djibouti on maritime vessels which are either owned by importers or
their regular transport service providers. The trip takes 16 days, including eight days for transporting
from Adama to Djibouti, where they are quarantined, and eight days for sea transport.
Egypt maintains a strict control on the importation of animals and meat. Before the animals and meat
are exported, animals must be kept in quarantine for 21 days and the Egyptian Council of Scientists
sends a team of veterinarians to inspect the health of animals and the slaughtering and packing
processes before approving import. Mainly, the inspection is for Foot and Mouth Disease (FDM).
Even though this disease is endemic in Egypt, they take care not to introduce new strains. The animals
are also quarantined and slaughtered at the port of unloading to avoid any possible disease
transmission. After the animals are slaughtered, the importers sell to designated wholesalers who are
mainly the Army and the publicly owned Food Industries Company (PIC). There are two main
quarantine stations and slaughterhouses, one belonging to the army and the other one to Pan Afric
Trade, the main importer of Ethiopian cattle. Camels are not kept in quarantine.
Pan Afric Trade is fully sourcing from Ethiopia. They have the capacity to import 2,300 cattle in one
shipment with the company’s own ship, and other carriers with which it is affiliated. The company’s
quarantine in Suez has the capacity to hold 3,500 cattle, and the slaughterhouse has the capacity to
process 150 cattle per shift.
Exporters usually receive orders to collect animals before the importer comes to buy. However,
negotiation takes place on the spot after the animals are collected.
Fresh meat is transported via air freight, either via Ethiopian Airlines or Egypt Air. Importers prefer to
use Egypt Air due to the significant price difference. However, some complained of deliberate delays
at the Addis Ababa airport when they do so. Table 19 below includes several transport modes and
prices.
46
Table 21: Transport Price from Ethiopia to Egypt (USD)
Type of Type of Ethiopian Airlines Egypt Airways Road
Product shipment Transport
Live FOB Djibouti NA NA 1.80/kg

Animal
Fresh meat FOB NA 5.50/kg

(Frozen)
Leather CIP 1.92/kg for 100 – 500 kgs 3.70/kg for 100 – 250 kgs NA
1.72/kg for >500 kgs 3.50/kg for 250 – 500 kgs
3.35/kg for 500 – 1,000 kgs
2.95/kg for >1,000 kgs
Private importers are in charge of importing meat. These importers either sell meat to the military,
which has its own distribution outlets to the public, or to a public sector distribution company named
Food Products Holding Co. These wholesalers distribute through their various outlets, including
butcher shops and supermarkets. The public holding company has about 350 channels, 35 of which
distribute meat from Ethiopia and Sudan.
Pan Afric also attempted to import meat from Ethiopia in 2009, during which time four cargo flights
(160 tons) were imported from Luna and Hashimexport abattoirs. But the last shipment was detained
due to rumors of disease threat.
The Egyptian packaging requirement for meat is not different from other countries’ requirements.
Meat product need to be individually wrapped with food graded plastic cover inside and carton
outside.
OPPORTUNIT IES
Meat
There is recent history of live animal and meat export to Egypt and a growing interest to increase
purchases from the Egyptian importers’ side. Because of its close proximity, Ethiopia can easily
export chilled meat to Egypt.
Several actions would facilitate export of animals and meat to Egypt. These include: promoting
commercial breeding; fattening cattle while still less than two years old; facilitating the construction
of a quarantine near the Djibouti border; improving veterinary service extension to prevent internal
organ disease and FMD; regulating the registration of slaughtering service and meat export as two
different activities to help slaughter houses operate at full capacity; and regulate the live animal
trading system possibly to make it more transparent.
Leather
Leather could be exported to Egypt mainly through Egyptian importers, who in return would sell to
manufacturers of leather goods. One way to facilitate such exchanges would be through the
participation in trade fairs. During a meeting with the Export Promotion Department of the Ministry
of Industry of Egypt, the Egyptian representatives expressed an interest in participating in the All-
African Leather Fair, which was held in Addis Ababa between 20 February and 22 February, 2013.
They also mentioned that they invited Ethiopian exporters to participate in their fair the following
month. Such trade fairs are important promotional tools, creating contacts between exporters and
importers.
47
Another opportunity would be to regulate the registration of tannery service and leather trading as two
different activities to help tanneries operate at full capacity and improve quality awareness at the hide
and skin traders’ level.
48
Date Description of Respondent/s Contact Details

discussion session
(FGD, individual
interview, other)
10.01.13 Embassy of Ethiopia, Mr. AyeleLire, Minister Counselor +202 (0) 3335 3696
introductory Ajija1999@yahoo.com
discussion and
mission set-up
10.01.13 Ministry of Prof. Osama Mahmoud Ahmed +202 (0) 3749 8359
Agriculture Selim, Chairman of GOVs Govs_egy@govs.gov.eg
10.01.13 Focus group &Dr.YossefMamdouhShalby, +202 (0) 3748 1763
discussion on Head of Vet. Quarantine in Egypt; youssefshalby@hotmail.com
veterinary inspection and a few importers
10.01.13 Discussion with Pan Mr. RoshdyHelal, Mr. Hassen and +202 (0) 2267 0871
AfricTrade (PAT) other partners g.m@pan-africa-trade.com
about their importing
experience from
Ethiopia
11.01.13 Discuss with Mr. A.A. Abdelakher +202 (0) 2376 28342;
AmalMisr Importer amalmisr2012@yahoo.com
11.01.13 Discuss with Owner Manager elanamegypt@gmail.com
Alanaam.co importer
12.01.13 Visit Quarantine and Quarantine head and Slaughter +202 (0) 2267 0871
Slaughter House in house head g.m@pan-africa-trade.com
Suez belonging to
PAT
13.01.13 Discussion, Office of Dr. YilmaJobry, Team Leader +202 (0) 3331 6000
the FAO ECTAD Egypt Yilma.jobre@fao.org
Representative
13.01.13 Discussion with Dr. KhaledSabry, Executive +202 (0) 2342 0909
Leather Export Director and Mr. Ahmed Short, lec@mti.gov.eg
Council of Egypt Chairman
13.01.13 Market observation Butcher
(Individual Butchery)
14.01.13 Embassy of Ethiopia, H.E. Ambassador Mohammed Ethio59@yahoo.com
wrap up discussion Dirir
14.01.13 Holding of Food Mr. TarekShaalan, Export & +202 (0) 2284 6649
Industries Co. Marketing Head Sectors Food_industries@yahoo.com
14.01.13 Market Observation Butchers
(Butchery that
belongs to Food
Industries Holding
Co.)
14.01.13 Interview with Mr. ShifareAssefa, Animal + 251 (0) 11 553 7877
Ethiopian Exporter Exporter sag@ethionet.et
who we met in Cairo
49
ANNEX 4: DEMOCRATIC REPUBLIC OF CONGO SUMMARY
MARKET ANALYSIS FOR LIVESTOCK PRODUCTS
TRADE DATA
Table 22: DRC Trade Data for Meat (HS 02), 201144
Meat
Imports Exports
TOTAL Total $ 125,910,000 n/a n/a
1 United States of America $ 31,660,000 " "
2 Netherlands $ 26,328,000 " "
3 Belgium $ 16,010,000 " "
4 Brazil $ 15,695,000 " "
5 Turkey $ 5,151,000 " "
6 Germany $ 4,195,000 " "
7 France $ 2,169,000 " "
8 Italy $ 1,598,000 " "
9 South Africa $ 1,546,000 " "
10 Spain $ 861,000 " "
NB: Import data based on partner reporting; no export data available
EXPORT HISTORY
Ethiopia and the Democratic Republic of the Congo (DRC) do not have a bilateral trading partnership
at present. There is regular air cargo service, and several companies have piloted vegetable and even
meat exports from Ethiopia. However, these ventures have been sustained.
Democratic Republic of Congo (DRC) is one of the largest countries in Africa, covering a total land
area of 2,344,858 sq km. The population size in July 2012 was estimated to be 73,599,190. The
country is endowed with rich mineral resources, but the country’s lengthy civil war and unrest has,
among other factors, prevented significant economic growth. GDP per capita is estimated at USD 400,
which is the lowest in the world.45 The DRC’s undeveloped agricultural sector does not satisfy
domestic demand, and the country requires significant imports of food items. There is some domestic
production in the livestock sector; the eastern part of the country has livestock production (estimated
to be no more than 1.2 million animals) and is the main source of domestic meat. However, the DRC
imported $126 million of meat in 2011 and meat exports have increased by 60%. The majority of
Congolese people (total population of 73 million) are unable to afford beef. As such, their primary
source of protein is fish and chicken.
There are a few large import and distribution companies in DRC which are mostly owned by
Lebanese and Belgians, except for one which is owned domestically. These companies import food
items and other products from various countries including, India, Brazil, Argentina, South Africa,
Namibia and China, and distribute through supermarkets and other distribution channels which are
owned by other actors. Live animal import is not a common practice, but meat from various sources
are imported with fish taking the lead, then chicken, and a very small amount of frozen beef. Chilled
fresh meat is mainly from domestic sources, though some is imported from South Africa.
44
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45
CIA World Fact Book, 2012
50
The EMA attempted to obtain information about leather and leather products. Generally the DRC
does not import significant amounts of leather since there is only one shoe manufacturer, which
produces military shoes. Bata manufactured shoes in the DRC for a short time, but closed due to
shortage of leather. Shoes are mainly sold by street vendors, but are expensive. Boutiques are
supplied by informal means - i.e. people importing products in luggage.
According to the DRC Ministry of Agriculture, there is a need for authorization of each shipment to
import fresh meat. The authorization is given in written form addressed to the Congolese customs
describing the amount, country of origin and freight vessel used for importing. If a product is to be
imported to States other than Kinshasa, additional permit by State authorities is also required. The
same respondent confirmed that there is a major high shortage of fresh beef, meaning that Congolese
consumers are willing to purchase any meat without respect for origin. Hence, the respondent gave a
promising assessment Ethiopia’s potential to export to DRC, assuming good quality is offered at low
price. The Customs Bureau Facilitation Director also described that importing standards were not
strict, with the exception of an inspection upon arrival to test for fitness for human consumption.
Despite this optimism, this assessment observes that the bureaucracy is cumbersome and corruption is
a notable factor. Apart from that, it was learned that there is a possibility to deal with importers or
retailers to receive the meat upon arrival at a destination port. The Administration Director or Grand
Marché also has given initial approval to create a distribution store for meat imported from Ethiopia,
should the project have to engage in wholesale or retail business.
Currently, beef is sold in Kinshasa at USD 11-24 based on quality and standard of distribution outlet.
The retail price reaches this level after passing through various cost drivers, including the price of the
exporter, shipment, insurance, 10% Tariff and 16% VAT. If the Ethiopian exporter could sell meat at
about USD 3-4,000/ton, the DRC higher-end customers could be a possible market. A medium size
animal which is locally sold at USD 650.00 can have an average carcass weight of 200 kg. Therefore,
there is a possibility to sell at USD 3,500/ton according to the EXWORKS slaughter house. However,
the current domestic retail price in Addis Ababa ranges from USD 6 – 7.500/per ton.
EMA respondents reported that Ethiopian meant exporters (Luna) had piloted the DRC market, but
did not find it attractive in terms of price. The assessment team has also learnt from Shoprite, a large
and new supermarket in Kinshasa, that it had been importing vegetables from Ethiopia, but that flow
was interrupted due to lack of space on Ethiopian Airlines.
COMPET IT ION
The importation of food items includes that of meat with mainly fish, chicken and buffalo from India,
Argentina, Brazil, South Africa, Namibia and others. Beef is considered high-end and consumed less
frequently. Fish is imported at a rate of USD 2,600/ton from India.
DRC is importing frozen meat from distant countries in Europe, Asia and Latin America. South
Africa is the only current source of chilled fresh meat. Ethiopia’s proximity and livestock abundance
can make it very competitive provided good quality fresh meat can be supplied at a competitive price.
LOGIST ICS
Transportation to DRC can take up to 50 days on a maritime vessel according to a recent report (Tufts
University, 2009). One experienced importer indicated that it takes 50 days and 40 days from India
and Brazil respectively to ship to DRC. Hence, unless Ethiopia is price competitive, sea shipment may
not be a choice. Air Shipment, on Ethiopian Airlines (ET) is the best option for transport of fresh
chilled meat. Cargo air freight would cost a bit more than USD 1,000 per ton with promotional price,
51
according to an EMA respondent (exact price could only be estimated upon actual negotiation).
Ethiopian Airlines flies daily and has two scheduled cargo flights per week. It is possible to dedicate
one of the cargo flights to export from Ethiopia. The cargo has a 30-32 ton capacity.
The following is a value chain map linking meat export to consumption in DRC.
Retailers (Butcheries,
Meat Exporter Meat Importer Supermarkets, open market,
hotels, pizzerias & door to door Market
suppliers)
Live animal
Animal Breeders
traders/ ranchers
Abattoirs and other illegal

slaughtering activities
The abattoirs do not stock animals of their own, but deliver only services to ranchers and retailers.
Hence, the abattoirs are horizontally connected to the value chain than relating vertically.
Notwithstanding, there is a significant number of animals killed in backyards and distributed to
retailers due to limited control.
OPPORTUNIT IES
As indicated above, Ethiopian exporters could target high-end beef consumers. However, this is a
limited market.
Groupe Orgaman: Orgaman, a Belgian company, has been operating in the country for over 50 years
and has two ranches containing about 40,000 cattle. They use abattoir services, which are owned by
the government for slaughtering the animals. In addition, they import 40,000 tons of meat (Fish,
chicken and pig) from Brazil and Argentina. Orgaman is satisfied with its current supply chain and
doesn’t believe there is additional need for sourcing from other countries.
Congo Future: This company was established in the last decade and is growing fast. The company is
a major importer dealing in many commodities, including meat. However, they did not express
interest in new sources.
Somsimex: Sosimex is another player in the field of import and distribution. It imports meat and
distributes through supermarkets and other sources. They were not willing to give detailed
information, but affirmed that there is sufficient market for beef provided the quality is good and price
is low. This is a common statement by all respondents.
Groupe Ledya: This company imports about 1000 tons of frozen meat per month, mainly fish and
chicken and only 5% beef (buffalo) from India, Brazil and Argentina. The company’s Commercial
Manager said that interrupting an existing supply chain and starting new relationship is too expensive.
He said they serve the bottom of the pyramid which cannot afford beef. They make only 10% markup
on imported meat.
Distribution Channels: There are multiple of distribution channels in Kinshasa. The EMA team
visited four supermarkets and one open market. All of them are supplied by the major distributors
52
above with some, also provisioning from door to door suppliers of either imported or local meat.
Those visited were:
Grand Marché
Shoprite
Kin Mart
Supermarché Keepi
Kin Store
Pelou store
Grand Marché: Grand Marché is a large open market owned by the Kinshasa city administration.
Practically everything is sold in this market including meat and leather products. The meat market is
mainly dominated by fish, whereas fresh beef is sold in only small quantities. The meat sellers get
their supplies from local distributors or buy animals and have them slaughtered in the abattoirs.
Shoprite: Shoprite is a large supermarket, opened by a South African firm in 2012 and has become
quickly popular. The supermarket serves primarily high income consumers. The supermarket has
three main divisions, including meat, vegetable and groceries. The vegetable division started to import
from an Ethiopian private vegetable producer and exporter named Jittu PLC, but could not continue
due to space problems on passenger jets of Ethiopian Airlines. The meat division gets 60% of its
supply from local sources with individual suppliers and also imports two tons per week from South
Africa. The division expressed an interest in testing Ethiopian meat in the market; the respondents
said they would like to have detailed information on the price and quality of meat Ethiopia is
producing. They have a plan to open two new branches in the near future.
53
Date Description of Respondent/s Contact Details
discussion session (FGD,
individual interview,
other)
17.02.13 Travel to DRC, Kinshasa Mr. Dereje (Station derejed@ethiopianairlines.com
and touched base with Manager) mob. +243 (0)81 700 6589
Ethiopian Airlines Area Mr. D. Ngoyi Bienzenza
office (Sales Manager
18.02.13 Price observation, Pelou Store, NA
interview and FGD Communications Manager
and Meat supplier
Interview and observation Owner Supermarché Keepi NA
Interview and observation

Mrs. (Boutique owner not NA
disclosed)
Price observation Kin Store NA
19.02.13 Dr. Symphorien Kasindi +243 (0) 9999 15482
Yimba, Director Vet. kasympho@yahoo.fr
Services, Ministry of
Agriculture
FGD with two experts Dr. Hailu and Dr. Serge +243 (0) 81 497 4040
from Bio-Economy Mpiana, Vet. Central Lab. +243 (0) 89 899 2480
Africa Foacl Point for
MOA/PATEC
Congo Future HQ Mr. Joseph Kevin Bitema Marketing and Sales Head
Interview
20.02.13 FGD with Grand Marché Mr. Dopili Lewanga Andre +243 (0) 82 202 2212
Administration Technical Moise bopilimoise@yahoo.fr
Director and Meat
Division Head
Interview Congo Future Food
Division Mr. Eric
Interview Wael Issaoui, Commercial +243 (0) 89 894 9513
Director, SOCIMEX wissaoui@socimex.net
21.02.13 Interview Mr. Ali Mnau Mamina, +243 (0) 97 082 3537
Executive Assistant to the alimamina@groupe-ledya.com
CEO
Interview & FGD Mr. Vaibhav Vashisht, +243 (0) 99 415 2760
SOCO FRAIS SPRL, Vaibhav_rules@yahoo.com
Director General and meat
division staff
Interview Mr. Sam Amisi Idi, Director +243(0)999 907 226
for Eco. Promotion Dept., idiamisi@hotmail.com
Federation Des Enterprises
(FEC)
Interview and FGD Mr. Denis, Customs
54
ANNEX 5: ITALY SUMMARY MARKET ANALYSIS OF
LIVESTOCK PRODUCTS
TRADE DATA
Table 23: Italy Trade Data for Meat (HS 02), 201146
Meat
Import Export
TOTAL World $4,323,178,141 World $5,354,780,158
1 France $484,876,992 China, Hong Kong SAR $613,316,792
2 Brazil $467,652,335 Romania $508,730,123
3 USA $301,277,647 China $465,740,585
4 Spain $194,390,211 Germany $383,702,229
5 Nigeria $188,250,032 Spain $372,733,875
6 India $183,933,233 France $309,867,603
7 United Kingdom $171,745,969 Portugal $221,121,328
8 New Zealand $171,409,334 Poland $201,142,777
9 Germany $165,085,043 Tunisia $180,278,288
10 Netherlands $136,772,517 USA $171,618,313
46
UN Comtrade
55
Table 24: Italy Trade Data for Hides, Skins and Leather (HS 41), 2011
Import Export
TOTAL World $ 4,323,178,141 World $5,354,780,158
France $ 484,876,992 China, Hong Kong SAR $613,316,792

1
2 Brazil $ 467,652,335 Romania $508,730,123
3 USA $ 301,277,647 China $465,740,585
4 Spain $ 194,390,211 Germany $383,702,229
5 Nigeria $ 188,250,032 Spain $372,733,875
6 India $ 183,933,233 France $309,867,603
7 United Kingdom $ 171,745,969 Portugal $221,121,328
8 New Zealand $ 171,409,334 Poland $201,142,777
9 Germany $ 165,085,043 Tunisia $180,278,288
10 Netherlands $ 136,772,517 USA $171,618,313
56
Table 25: Italy Trade Data for Leather Products (HS 42), 2011
Leather Products
Import Export
TOTAL World $3,238,351,371 World $6,843,602,625
1 China $1,375,975,181 Switzerland $1,358,309,239
2 France $545,463,403 France $952,046,760
3 India $167,240,344 USA $563,651,431
4 Switzerland $140,224,868 Japan $490,620,255
China, Hong
5 Romania $123,353,632 $473,267,345
Kong SAR
6 Turkey $110,014,139 Germany $408,738,737
United
7 Germany $102,531,558 $377,154,227
Kingdom
8 Belgium $98,281,391 Rep. of Korea $329,065,303
United
9 $84,944,966 Spain $209,618,727
Kingdom
Russian
10 Netherlands $57,595,205 $196,113,184
Federation
EXPORT HISTORY
Italy is one of the leading countries in the world of fashion design in leather apparel. With its state-of-
the-art tanning sector, innovative designs, as well as high quality, branded products known around the
world Italy has become the first name in leather manufacturing. Italy accounts for 60% of Europe’s
processed leather production and approximately 15% of the all processed leather production in the
world47. According to leather industry trade resources Italian leather production and service
companies employ over 17,00048 people throughout the country. They are part of an industry that
generates annual sales of about USD 5.2 billion49. Italians have long considered themselves as the
world leader in design, quality, environment friendly products with the capacity to develop innovative
products.
Italy leather sector has faced a number of challenges in recent years, however, as the economic crises
and rabid competition have eroded its leadership. Competition from China, Indonesia and Hong
Kong has been intense and the valuation fluctuations in the Euro have introduced a level of revenue
uncertainty in it exports business. In this climate of crisis and uncertainty, Ethiopia has become an
47
International Journal of Economics and Management Sciences, 2011
48
Ibid.
49
Ibid.
57
important source of finished leather. It is potentially an important source of finished leather products
for the Italian and European markets.
Ethiopia imports raw materials (finished leather and accessories) from Italy to incorporate into its
leather product manufacturing and often re-exports finished products back to Italy. Though the
potential for growth is high, a number of challenges exist, particularly with respect to quality control,
manufacturing management and techniques, and governmental regulations and customs procedures.
Ethiopia's exports represent 0.38% of world exports for hides, skins and leather (HS 41), ranking 41 st.
The world’s top exporters are listed in the table below.
Table 26: World Totals and Leading Exporting Countries for Hides, Skins, and Leather50
Exported Exported Exported Exported Exported
value in value in value in value in value in
Importers 2007 2008 2009 2010 2011
World 93,394 90,960 42,769 67,199 122,713
Italy 38,808 34,312 10,477 11,701 39,439
China 12,237 14,647 7,935 15,564 27,491
India 6,307 5,422 4,261 10,629 16,851
Hong Kong, China 4,114 5,407 2,022 5,460 15,089
United Kingdom 14,890 11,214 11,987 12,409 11,718
Ethiopia maintains a competitive advantage in price, though their competitive edge has wane as a
result of increasing leather prices.
Italian buyers and manufacturers interviewed during the market research visit indicated that the
Ethiopian sheep leather is some of the finest in the world. They key characteristics of the leather
include its supple feel perfect for gloves and high quality, fashion bags and purses. It is also a very
strong leather, which means that it can be use for making fashion shoes and other products that
require a strong outer shell.
Ethiopia has been known to take up to five months to deliver an order to the Italian buyer from the
time the order is placed until it reaches the buyer’s warehouse. In a fashion-driven industry, this is
unacceptable and has limited opportunities for Ethiopian producers to gain much of a share of the
Italian and EU markets.
50
Global Trade Statistics, November 2012
58
COMPET IT ION
Ethiopian shoe production is competitive in the Italian and European markets. Bangladesh is
Ethiopia’s main competitor, particularly for the classic black men's shoes. Ethiopia can produce this
shoe for around €10 ex-factory, which is comparable to what the shoe costs in Bangladesh, but
Ethiopia is closer to Italy and the EU, which Italian buyers stated was a significant advantage.
Several Italian buyers stated that given the large livestock and leather industries in Ethiopia and the
proximity to the European market, Ethiopia could be the “future source” for shoes destined for the
European market.
LOGIST ICS
Most goods are now cleared through the dry port in Addis Ababa. Previously these goods were
cleared though Djibouti. As Djibouti has lost revenue as a result of this change, some have accused
the port of causing delays. From the port in Ethiopia/Djibouti it can take 10 to 15 days for goods to
be loaded on a ship and sent onward to their destination. Lengthy delays can mean increased expenses
incurred by exporters.
The cost to ship a 20 foot container of accessories and components from Genoa to Djibouti by ship
and then to Addis Ababa by truck is €1,600 and takes three weeks to reach the port in Djibouti. The
total cost to ship a 20 foot container that holds 3,000 pairs of shoes from Addis Ababa to Genoa will
be in the range of € 1,800 – 2,000.
Both importing and exporting require lengthy governmental processes. It takes a letter of credit and
one month to get a license to import raw materials into Ethiopia. The letter of credit is necessary
because the government of Ethiopia only grants import licenses with sufficient foreign exchange. For
goods imported through Djibouti, the Government of Ethiopia requires transportation of containers
from Djibouti to the Ethiopia dry port via Ethiopia Shipping Lines (ESL), a government-run and
owned company that is notorious for delays taking months arrive from Djibouti.
Examples:
Italian exporter: An Italian exporter of accessories and components for the leather products industry
sent a shipment of accessories in July 2012 that left Genoa; it did not reach Addis Ababa until
October. This caused an Ethiopian shoe producer to lose an order because the shoes were actually
supposed to be in Italy by September! There have been other orders from Italy that were canceled due
to logistics problems out of Ethiopia.
Italian producer based in Ethiopia: Geox tried operating in Ethiopia but did not succeed due to the
delays in clearing and customs and issues with foreign exchange. This is a major problem, because a
company like Geox would have been a major development for the Ethiopian leather and shoe
industry.
OPPORTUNIT IES
Italian buyers have been cautious about buying products that are considered to be high fashion due to
the need for swift delivery and uncompromising quality. Italian buyers believe that Ethiopia can enter
this market, but a number of factors need to come together, including shorter lead time from order to
delivery; and better a organized manufacturing process. One group in Italy, Consorzio Toscana Shoe
Components, has recently decided to procure £5 million in garment and leather products from
Ethiopia including women’s shoes targeting the EU and US markets. Consorzio Toscana is meeting
with several companies and planning to finalize the deal in the spring of 2013.
59
Name of companies or Contact person Position Address

Associations
Krinas S.r.l. – Input Gianni. Zoppitelli Managing Director Via Lucio Colli , 14
provider for finished 27029 Vigevano PV, Italy
leather and shoe Tel: 335 66 36 845.
components
La Nuova Adelchi Sr. Adelchi Director Via Provinciale Montesano
S.p.a. – Shoe producer Tricase
and importer 73039 Tricase (Le)
Italy
Telephone:+39 833.5261
Pamacom, s. r. l. Stefano Paissoni, Director Piazza A. Moro 52
24050 Grassobbio (Bergamo) –
Italy
tel +39 035 4522223
Consortio Toscana - . Director Components
Consortium of 20 Shoe Federico Bechini, Via Tevere, 13 – 51018 – Pieve
and the Leather Consorzio Toscana Shoe a Fievole (Pistoia – 30 minutes
Producers in the far from Florence by car)
Tuscany region. Met Office tel.: +39 0572 954349
with five additional
members of the
consortium (leather
importers, shoe and
apparel manufacturers),
in and around Pistoia
and over lunch
Pellami Macchini– Enrico Macchini, Managing Director Via Della Repubblica 136
Leather buying and Pieve A Nievole Via Francesca
machine servicing 109
Monsummano Terme Pistoia-
51015
Italy
Tel. +39 0572 950 888 / 335
688 1820
Studio 99 Srl – buyer Gianni Samuele Director Via Sandro Pertini SCN
and distributor of 63812 Montegranro, Italy
leather and leather Office +39 0734 893530
products
60
ANNEX 6: KENYA SUMMARY MARKET ANALYSIS OF
LIVESTOCK PRODUCTS
IMPORT RANK INGS
Table 27: Kenya Trade Data for Hides, Skins and Leather (HS 41), 201151
Import Export
Burundi $3,752,000 Italy $17,992,000
1
Hong
Rwanda $3,511,000 Kong, $17,473,000
2 China
Uganda $2,263,000 Switzerland $15,715,000
3
New
$348,000 India $9,226,000
4 Zealand
United
Republic of $306,000 China $7,121,000
5 Tanzania
6 Malawi $133,000 Indonesia $3,513,000
United Arab
$78,000 Pakistan $3,019,000
7 Emirates
Sudan $39,000 Turkey $2,697,000

8
Democratic
Republic of $21,000 Australia $1,874,000
9 the Congo
10 India $12,000 Spain $1,545,000
Table 28: Kenya Trade Data for Leather Products (HS 42), 2011
Leather Products
Import Export
United States
1 China $8,648,000 $248,000
of America
United
2 Arab $1,312,000 Uganda $244,000
Emirates
South
3 $718,000 Sudan $226,000
Africa
Ship stores
4 India $352,000 $224,000
and bunkers
51
UN Comtrade
61
Leather Products
United United
5 $210,000 $217,000
Kingdom Kingdom
6 France $180,000 Eritrea $211,000
United
Chinese
7 $146,000 Republic of $211,000
Taipei
Tanzania
Hong Democratic
8 Kong, $127,000 Republic of $50,000
China the Congo
United
9 States of $122,000 Rwanda $44,000
America
10 Pakistan $114,000 Area Nes $35,000
EXPORT HISTORY
Kenya and Ethiopia have positive commercial and political ties, and recent years have seen been
marked by increased commercial and trade cooperation. Most notably, the Joint Ministerial and
Border Commission meetings have provided opportunities to exchange views on issues of common
concern. Ethiopian and Kenyan governments have signed Special Status Agreement which laid the
framework for increased trade between the two countries. Ethiopia and Kenya have embarked upon a
number of joint development programs in road construction, commerce and trade and other areas.
Ethiopia has been exploring the possibility of using Mombasa as a port, and there are discussions
about creating a new port at Lamu and rail links with other areas.
Despite the constructive relationship, there has been very little trade in leather and leather products
between Ethiopia and Kenya. To date, existing exports have been limited to a small SME export
sector, exports by individuals, and raw hides and skins slipping through the border illegally.
Kenya has 14 million cattle, 10 million sheep and 12 million goats. This livestock resource base is
capable of producing adequate hides and skins for a vibrant leather industry. However, due to poor
animal husbandry, poor recovery of hides and skins and low off-take rates, the potential output is not
fully realized. Considerable number of hides and skins do not enter the market, and hides and skins
are generally of low quality due to defects.
Kenya’s hides, skins and leather industry contributes 1.5 per cent of the country’s overall GDP. Value
addition in the sector has been minimal until recently, as most of Kenya’s exports have been raw
hides and skins. The Kenyan tanning sub-sector peaked around the year 2000 with 21 tanneries with
an installed capacity of 3.5 million hides and 11.6 million skins. This changed after the abolition of
the government’s ‘export compensation’ scheme, which was intended to encourage the industry, and
market liberalization, through the cutting of Kenya’s trade tariffs on imported leather and footwear.
These changes provoked a surge in cheap imports, and half of Kenya’s tanneries went out of business.
By 2004/05, 80% of the hides and skins produced were being exported in their raw form.
A major change came in June 2006, when the government raised the export tax payable on raw hides
and skins to 20 per cent and the following June, doubled it to 40 per cent, aiming to encourage the
leather processing industry. Currently, there are 12 operational tanneries with an installed capacity of
1.5 million hides and 3.6 million skins, primarily located in Nairobi and its environs. Tanneries
62
mainly produce semi-processed leather (80%) for the export market and only finish small portions
(20%) to supply leather shoe and leather goods companies.
There is some, but limited, specialization in the Kenyan leather goods industry. The sector consists of
10-15 footwear manufacturers and 18 leather goods manufacturers plus over 60 SMEs. According the
information from the Kenya Development Leather Council, Kenya has an annual demand of 34
million shoes, but only 4 million, about 8.5%, are supplied by the local shoe manufacturers. The gap
between the local demand for shoes and local production has been met with cheap imported shoes
from Asia (mostly China). Ethiopia, shoe exports have been successful in this market as well. Kenya
has a large and growing population that is rapidly urbanizing, and as such, demand for leather
products will has been and will continue to increase
Anecdotal evidence suggests that domestic Kenyan tanneries are not meeting the standards or
quantities required by Kenyan leather goods producers. This is confirmed by studies of the Kenyan
value chain which document that the industry’s finished leather is not competitive on price or quality.
Ethiopia has a well developed tanning industry that can produce good quality finished leather
compared to the Kenyan tanning industry. Tanneries in Ethiopia have been consistently producing
finished leather, mostly from cow-hide, for local shoe companies. Currently, there are at least ten
tanneries that have good finishing capacities to process cow-hide into finished. Tanneries in Ethiopia
can also produce wide range of shoe upper leather at competitive prices.
The lower income segment of the Kenyan market is currently served by inexpensive imported shoes,
some of which are synthetic and last for only weeks in Kenya’s hot weather. Second-hand shoes are
very common as well.
Generally there is a very good perception of Ethiopian leather and leather products among Kenyans.
Most people in Kenya believe that leather shoes and leather goods from Ethiopia are made from
genuine leather and sell at affordable price.
Ethiopia is currently exporting to Kenya with some success. The majority of shoes export from
Ethiopia to Kenya comes from small shoe manufacturers located in the Merkato cluster. Ethiopia’s
Tikur Abaye Shoe Share Company has many years of experience in the production and export of
military shoes and has recently installed a modern injection mould machine that can produce high
quality safety hoes. Kenya offers a large market for safety and workmen’s shoes.
COMPET IT ION
The gap between the local demand for shoe and local production means that local production in both
finished leather and leather goods would not constitute primary competition for Ethiopian exports.
Rather, Ethiopian finished leather and leather goods sectors would compete with other exporters to
Kenya, notably China.
LOGIST ICS
Goods can be transported between Ethiopia and Kenya by air, sea and road. Road transport is the
least expensive. Addis Ababa and Nairobi are approximately 1500 km apart. There is an asphalt road
from Addis Ababa to the Ethiopian-Kenyan border town of Moyale; the gravel road from Nairobi to
Moyale will be upgraded within the next two years.
Ethiopia’s primary sea access is Djibouti port for bulk imports and exports. Djibouti port is about 980
km from Addis Ababa; sea transport is therefore not attractive in comparison to road transport.
63
Moreover, the volume of trade in leather between the two countries has not yet reached levels to fill
shipping containers.
Air transport could be an option for high value, low volume and low weight products such as leather
jackets, ladies’ hand bags and finished skins leather. Ethiopia Airlines and Kenyan Airways have
daily flight between Addis Ababa and Nairobi.
OPPORTUNIT IES
The current status of Kenya leather industry provides opportunity for Ethiopian tanneries to export
finished leather to Kenya for footwear and other leather goods manufacturers. As noted above,
Ethiopian tanneries are in a position satisfy the quality of leather demanded by the Kenyan footwear
and other leather goods industry at competitive prices.
A second major opportunity is for Ethiopian leather goods manufactures to expand market share,
particularly in low cost shoes. As noted above, the large gap between local production and demand is
currently being satisfied other exporters, which often provide products of limited quality. Ethiopian
SMEs have already had some success in this area. Small scale shoe enterprises that are clustered in
Merkato area have flexible and cost effective production systems that can meet the requirement
certain segment of the Kenyan shoe market. The small shoe enterprises can produce fashionable
men’s shoes by copying, in small orders and can make fast deliveries at competitive prices. The
majority of shoe exports to Kenya comes from this source. Some of these enterprises are upgrading
their facilities to meet increased demand for the local and new export market in Kenya.
The Kenyan market could also provide an opportunity to diversify shoe and leather products.
Ethiopian manufacturers could target high quality shoes for the growing middle class, safety and
school uniforms shoes (with which Ethiopian manufacturers already have experience), and leather
sandals suitable for the hot climate. The industry could also expand into leather garments, wallets,
belts, ladies hand bags, document cases and shoe components.
64
Name of Contact person Position Address Notes

companies or
Associations
Brasbuckle Bedan Kimeria Managing Ongata Rongai Brasbuckle was established
Ltd – Leather Muraya Director 254-722-391 902 4 years ago as a small but
Goods brasbuckle@yaho manufacturing company to
Manufacturer o.com take care of emerging but
market in Nairobi city.
Currently our labor force is
six persons operating a
highly mechanized
production line with a
turnover of about USD
200,000 per annum.
Abdulwadood Jamal Managing Lunga Lunga The company was formed
Tanners Ltd Abdulwadood Director Road, Industrial over 50 years ago and has
Area been trading in East African
Nairobi Hides and Skins over this
254-20- period
650075/76
awt@kenyaweb.c
om
AFSO Fatma Saleh Director Lunga Lunga
Exporters Ltd Abdalla Road, Industrial
Area
Nairobi
254-722-700 690
baabad@afsoexp
ortersltd.com
Crown Vijay Manager Hema House, We are manufacturers of
Industries Ltd Enterprise Road more than 60 designs of
Nairobi different soles for leather
254-20- shoes. We make PVC
536876/77 shoes/footwear for ladies,
sales@crowindus gents and children.
tries.org
Dog Bones Ashwin Punja Director Nanyuki Road Company formed 2001.
Ltd Nairobi Involved in contract tanning
254-20-652009 of hides and skins into wet
ashwin@dogs- blue for exporters. Also
b.com vegetable tanning and
finished leather for the local
market. Employ 25 fulltime
and casuals. Also do gloves.
Turnover approximately
Kshs 20,000,000 in last year.
Merit Samuel Njoroge Managing Nairobi Merit Marketing started in
Marketing Mwangi Director 254-20-892099 1993. We're manufacturers
Services merrit21@yahoo. of Leather, Rexine (PVC),
com CANVAS AND KIKOI
PRODUCTS. We started
doing business with shops
65
Name of Contact person Position Address Notes
companies or
Associations
and later included
companies. The biggest
business we have done is to
make products for
conferences. We have done
business with Kenyan
companies, NGO's and the
Government of Kenya. The
Company has eight workers
and in case of a big order /
business we do employ a
total of about 25 workers
some on contract basis. Our
annual turnover is about 500,
00 KSh.
66
ANNEX 7: TURKEY SUMMARY MARKET ANALYSIS OF
LIVESTOCK PRODUCTS
TRADE DATA
Table 29: Turkey Trade Data for Hides, Skins and Leather (HS 42), 201152
Import Export
1 Italy $113,282,157 China $28,380,957
China,
Hong
Spain $94,687,851 $22,201,838
Kong
2 SAR
Free Free
$52,931,029 $11,851,156
Zones Zones
3
Greece $36,844,754 France $10,631,368
4
5 USA $28,390,165 Ukraine $8,691,463
Russian
France $27,681,492 $8,054,756
Federation
6
7 India $23,121,153 Germany $5,712,206
8 Pakistan $22,761,364 Italy $5,428,056
United
$20,405,505 Belarus $4,189,812
9 Kingdom
Iran $18,432,490 Bulgaria $4,144,922
10
52
UN Comtrade
67
Table 30: Turkey Trade Data for Leather Products (HS 42) 2011
Leather Products
Import Export
1 China $271,770,579 Italy $91,568,753
Pakistan $56,286,091 Germany $59,637,171

2
Russian
Italy $54,656,186 $47,869,368
3 Federation
United
France $21,135,670 $42,975,845
4 Kingdom
5 India $20,168,710 France $30,913,766
Germany $8,796,455 Spain $20,375,530

6
Viet
$7,591,302 Denmark $15,497,253
7 Nam
8 Spain $7,279,520 USA $10,498,760
Indonesia $4,465,314 Austria $9,617,260
9
Customs
Free $2,785,633 Netherlands $9,513,420
10 Zones
EXPORT HISTORY
Economic and commercial ties between Turkey and Ethiopia are positive, and have developed
substantially in recent years. Bilateral trade volume tripled between 2004 and 2011, reaching USD
317 million. In 2011, Turkey exported USD 275 million in goods to Ethiopia, up by 57% from 2010.
The top three Turkish exports were iron and steel, machinery and plastics. Ethiopia exported to
Turkey USD 4.7 million in 2011, up 1.9% from 2010; the primary categories were textile yarn and
fabrics, oil-seeds, vegetables and fruits. Turkish companies have been very active in Ethiopia and
since 2003 Turkish firms have invested USD1.3 billion in the country.53
Despite these ties, Turkey has not been a major export market for Ethiopia’s leather and leather
products (when compared with Italy or England, for example). There has been some export of semi-
processed skins in recent years to tanneries in Turkey, which were further processing the skins into
finished leather and supplying it to the Turkish leather products industry. However, a 2009 tax by the
Ethiopian government on semi-processed hides and skins has halted this trade. Turkish tanneries
continue to be interested in semi-processed skins from Ethiopia.
The Turkish leather industry is one of the biggest leather producers in the world. For sheep and goat
leather production, Turkey is the 4th largest producer in the world after Italy, China and India. Turkey
produces the most double face sheepskin leather in the world, at 80 million pieces per year. The
quality of Turkish leather garments and leather products rivals that of Italy.
53
Data from Turkish Ministry of Economy.
68
The Turkish leather products industry is robust, particularly in manufacturing high quality leather
products. There are 13 Industrial Leather Zones in Turkey, in which companies use modern
technology and produce environmentally friendly, high quality products. There are more than 3000
companies in Turkey that deal with export of leather and leather products, and the sector employs
more than 25,000 workers. Istanbul is the most important trade centre for the Turkish leather industry
and there are about 600 leather shops operating in the city. Moreover, the leather industry is one of the
most significant industries within the Turkish economy, accounting for 1% of the manufacturing
sector’s output, 1.7% of the sector’s workforce, 1% of total Turkish export earnings.
Turkey has a large population and a rapidly growing economy, suggesting a growing retail market.
The total population of Turkey was 73,722,988 in 2010. Turkey has the highest economic growth rate
in Europe; according to the IMF, the Turkish economy is expected to grow by 3.5% in 2013. GDP per
capita has tripled in the last ten years from USD 3,492 to USD 10,444.
Turkey’s leather and leather goods import is comprised of Percentage Distribution of

footwear (40%), raw hides/skins (18.8%), finished leather and
fur (18.4%), leather goods (18.1%); leather garments (3.9%) and
Leather and Leather Good
ready wear of fur skins (0.8%). Exports included footwear Export of Turkey 2011
(31%), double face garments (19%), leather garments (16%),
finished
leather goods (16%); raw hides/skins and finished leather leather and
Saddlery
together (16%). fur
17% 16%
footwear
32%
Turkish leather exports have been heavily directed to five main leather double face
garments garment
European markets in 2011. The major market destinations for 16% 19%
Turkish leather and leather goods in 2011 were Russia (21.2 %),
Italy (9.7 %), Germany (8.8 %), France (6.3 %) and UK (4.6 %).
The total share of these five biggest markets for leather export
accounts for 50.6 % of total leather exports.
The Turkish leather industry has high quality and price competitiveness requirements which Ethiopia
has generally been unable to meet.
The Turkish footwear industry uses high quality finished leather from domestic sources and from
imports to produce high quality fashionable leather shoes to the world market. The high quality
requirement of the Turkish footwear industry presents little opportunity for Ethiopian tanneries to
supply. Those areas include the finished lining leather for shoes, which Ethiopian tanneries could
provide at a competitive price, and suede uppers. While Ethiopia is well known for its goat skins for
suede uppers, sheep skins tend to not fit size and quality requirements. Price competitiveness is an
issue for Ethiopia in exporting uppers as well.
The Turkish garment industry is the leading sector in the leather industry and uses very high quality
finished leather to produce fashionable, very high quality, expensive leather garments. Although, the
Ethiopian hair-sheep skin has the fine grain structure that makes it suitable for garment production,
the sheep Napa leather currently produced from Ethiopian skins is far below the quality and size
requirements of the Turkish garment industry.
Turkey has not yet fully developed its glove industry and does not demand huge quantities of gloving
leather, which Ethiopian tanners could supply in the required quality and quantity.
The Turkish leather industry also has very strict delivery requirements. While tanners of semi-
processed skins can tolerate delay, the finished leather industry cannot.
69
Business relationships in the leather and leather products industry are developed over a long period of
time. Typically buyers first request samples; if they accept the samples they place small sample
orders and gradually increase their order size over a period of time. Buyers place large commercial
orders only when they are sure about quality and consistency of supplies from their suppliers.
COMPET IT ION
The Turkish leather products industry obtains finished leather from Turkey’s well-advanced domestic
tanning industry, and also imports from world-known suppliers such as Italy, China, India, Pakistan,
Spain, Vietnam and Indonesia. The Ethiopian leather industry has to compete on quality, price and
delivery with these established sources for the Turkish industry to consider Ethiopia as an alternative
source.
LOGIST ICS
Air and sea transport are the two most viable means to ship finished leather and leather products to
Turkey. Initial orders of samples and samples orders are usually are sent by air as they have to be
supplied quickly. Commercial orders of small quantity are also air freighted, but large orders are
typically shipped by sea.
Both Ethiopian and Turkish Airlines have daily flights to and from Istanbul and Addis Ababa. As
Istanbul lies on major international sea line, sea transport is a viable option.
OPPORTUNIT IES
As the Turkish leather goods industry continues to grow, its demand for leather will increase, opening
opportunities for alternative sources of finished leather to its traditional suppliers like Italy, China,
India and Pakistan.
One opportunity would be to start by supplying products that are widely available in Ethiopia, do not
require sophisticated manufacturing techniques, and has high demand on the Turkish market. Finished
lining for shoes from cow, sheep and goat leather, as discussed above, is a prominent example.
Ethiopian goat suede uppers also have a reasonable chance of success in the Turkish footwear
industry.
The EMA team also found anecdotal evidence of interest in classic shoes for the lower income
segment of the Turkish population, and fashion and working gloves.
70
Name of Contact person Position Address

companies or
Associations
Honorary Ismail Hakki Kisacik Honorary consul Tel : +90212 446 4201
Consulate of Fax: 90212 446 40 05
the Republic email:ismailkisacik@tahagr
of Ethiopia oup.com
Mahmutbey Merkez
Mahallesi, Istanbul/Turkey
Turkish Mehmet Akif Korkmaz African Regional Tel:+90(212)454 03 85
Exporters coordinator Fax:+90(212 )454 0413/83
Assembly e-mail:
akifkorkmaz@tim.org.tr
www.tim.org.tr
Yenibosna/Istanbul/turkey
Turkish Onur Gorgun Secretary General Tel:+90(216) 394 07 40 -41
industrialist Fax: +90(216) 394 07 42
Association e-mail:tdsd@tdsd.org.tr
www.tdsd.org.tr
34957 Tusla-
Istanbul/Turkey
Turkish Guven Karaca Member of the Tel:+90(216) 394 07 40 -41
industrialist board Fax: +90(216) 394 07 42
Association e-mail:tdsd@tdsd.org.tr
www.tdsd.org.tr
34957 Tusla-
Istanbul/Turkey
Turkish Mehmet Ali Dinc president Tel : +90(212)665 27 47-
Leather 582 55 11
Garments Fax:+90(212)546 77 53
Manufacturer’ e-mail:tdkd@tdkd.org.tr
s Association www.tdkd.org.tr
Zeytinburnu,
Istanbul/Turkey
Istanbul Mehmet Ali Dinc Member of Board Tel : +90 212 454 02 00
Leather and Fax: :+90 212 454 02 01
leather e-mail:info@itkib.org.tr
products www.itkiib.org.tr
Exporters’ Istanbul/Turkey
Association
TASD- Huseyin Cetin president Tel : +90 212 549 71 71
Footwear Fax:+90 212 71 17
Industrialist e-mail:info@tasd.com.tr
Association www.tasd.com.tr
of Turkey Basaksehir, Istanbul/Turkey
Istanbul Ahmet Sisman R&D legislation Tel:(212) 454 02 00
Textile and Department ext.1319
apparel Fax:+90(212)454 0423
Exporters’ e-mail: ahmets@itkib.org.tr
Association www.itkib.org.tr
Yenibosna /Istanbul/turkey
71
companies or
Associations
TASD- Suleyman GURSOY Board member Phone:+90 212 549 71 71
Footwear Fax:+90 212 71 17
Industrialist e-mail:info@tasd.com.tr
Association www.tasd.com.tr
of Turkey Basaksehir, Istanbul/Turkey
Ziylan Grup Aykut Buyukekksi Member of Board Tel : +90(212)446 8989
Fax: +90(212)446 21 41
Email
:abuyukeksi@ziylan.com.tr
www.ziylan.com.tr
Mahmutbey Merkez
Mahallesi, Istanbul/Turkey
Perre by Dogu Mehmet Ali Dinc Owner/manager Tel : +90 212 415 57 17/18
Deri Fax:+90 212 510 27 36
e-mail:m.ali@doguderi.com
Zeytinburnu,
Istanbul/Turkey
PICASSU- Orhan Tasdemir Owner and manager Head office:
Tel : (+90 212)511 85 46-
522 67 59
Fax: (+90 212) 522 3666
Mercan ,Istanbul/turkey
Factory:
Tel :: (+90 212) 691 08 57-
69108 56
Fax: (+90 212) 691 18 08
e-mail: info@picassu.com
www.picassu.com
Istanbul/turkey
Erdogan Deri Muharrem Erdogan owner Head office:
Phone:+90 212 546 24 54-
94 90
Fax: +90 212 546 94 80
Zeytinburnu,
Istanbul/Turkey
Tannery:
Tel : +90 266 762 14 30
Fax: +90 266 762 7081
e-mail:
info@erdoganderi.com.tr
www.erdoganderi.com.tr
MOLYER Ozcan Demir

Tel:+90 212 671 56 90
Fax : +90 212 67141 38

e-mail:info@molyer.com
www.molyer.com
Merkez/Istanbul
72
companies or
Associations
Bilge Toka- Tel:(0332)346 0 346
Accessories Fax: (332) 346 1 346
and Merkez/Istanbul
components
manufacturer
Deteks Burc Uluc Ithalat-ihracat Tel: 0(216) 394 02 40

Kimya departmani Fax:0(216)394 09 65
Sanayia.s. e-mail
:burculuc@deteks.com.tr
www.deteks.com.tr
Aydinli-Tusla-istanbul-
Turkey
Mader – Tugrul Matras Tel: 0216 394 29 02
tanning :0216 394 14 18
corporation Fax: 0216 394 14 20
e-mail : tugrul@mader-
tanning.com
F/2 parsel Tusla-Istanbul -
Turkey
73
ANNEX 8: UNITED ARAB EMIRATES SUMMARY MARKET
ANALYSIS FOR LIVESTOCK PRODUCTS
TRADE DATA
Table 31: UAE Trade Data for Meat (HS 02), 201154
Meat
Imports Exports
TOTAL World $1,362,295,089 World $41,007,173
1 Brazil $547,514,423 Oman $9,885,827
2 Australia $205,298,712 Iran $6,930,772
3 India $180,851,874 Qatar $5,750,936
4 USA $124,378,639 Jordan $2,364,236
5 Pakistan $57,232,536 Afghanistan $2,022,992
6 Ethiopia $48,608,264 Kenya $1,847,278
7 France $27,812,350 Brazil $1,638,075
8 New Zealand $27,208,461 Saudi Arabia $1,340,179
9 Oman $25,388,122 Kuwait $1,248,885
10 Saudi Arabia $19,838,052 Turkmenistan $1,212,732
Table 32: UAE Trade Data for Live Animals (HS 01), 2011
Live Animals
Import Export
1 Oman $58,979,171 Qatar $13,881,528
2 India $19,483,353 India $3,262,056
Saudi
3 Somalia $17,129,368 $3,150,698
Arabia
4 Australia $10,537,493 Oman $1,089,271
5 Iran $9,360,980 France $577,254
6 Netherlands $7,438,260 Bahrain $477,158
Saudi
7 $6,702,508 Kuwait $340,888
Arabia
United
38 $4,256,182 Afghanistan $307,764
Kingdom
9 Germany $4,209,324 Japan $205,638
10 Qatar $4,115,711 Iran $165,229
EXPORT HISTORY
Hameria Trading was established in 1992 and began importing cattle from Ethiopia in 2003. The
LMD team met with the firm’s Managing Director, Mr. Ibrahim. Ethiopian livestock are well-known
in the market.
54
UN ComTrade
74
Ethiopian quarantines do not meet the UAE’s livestock import requirements and as a result, livestock
from Ethiopia are currently banned. Ethiopian animals still enter the UAE market, by first passing
through additional quarantine in Djibouti or Somalia.
UAE is a large importer of live sheep and goats, as well as meat. It imported 208,219 live sheep and
3,795 cattle in 2007. Though low in number, cattle imports are growing at a rapid rate. According to
the Dubai Chamber of Commerce and Industry, between 2000 and 2004, Dubai imported USD 2.24
billion of livestock and livestock products.
UAE’s appetite for meat has been steadily increasing over the past few years, increasing by 30%
between 2008 and 2011. UAE imported over $1 billion worth of meat in 2011, of which Brazil,
Australia, USA and India supplied more than 77%. Unique to the UAE market is the substantially
high proportion of foreigners; of its 3.1 million residents, about 75% are expatriates. The UAE also
includes a sizable Ethiopian community.
The LMD team interviewed several firms importing Ethiopian meat. Alkarama Meat Trading usually
imports 8-10 tons of meat each day from Ethiopia. Siam Trading and Reliance Trade both import 2-4
tons of meat per day from Ethiopia. Somali Blackhead sheep (25-35kg) and Boran cattle (220-350
kg) are especially in demand.
Unfortunately, UAE currently bans imports of live animals from Ethiopia due to quarantine
procedures that they find to be unacceptable, but many animals imported from Djibouti and Somalia
are of Ethiopian origin. Entering the market for live animals will require improving the quarantine
conditions and achieving accreditation from the Dubai Municipality.
The quarantine regulation requires 15 days of quarantine before entry into UAE. Live sheep and goats
are tested for Rift Valley Fever and Brucellosis. If disease is detected, then an additional 15 days of
quarantine is required to look for clinical signs for suspected diseases (UAE EMA Report). The
major causes of animal rejection in Dubai are cysticercus bovis in cattle and hydatidosis in small
ruminants. At the quarantine in the port of Hamriya, cattle are vaccinated against FMD type A, O, C,
SAT 1 and rinderpest, while shoats are directly taken to the market. Following the 2007 RVF
outbreak in Kenya, the UAE imposed an import ban on Ethiopia for approximately six months
(Farmer).
UAE live animal importers require a Letter of Credit (LC) to ensure reliability of imports. They
would be comfortable with importing live animals every three months.
Halal certification is a major concern for this market and Ethiopian meat has a damaged reputation.
Interviews with importers reveal that they know that Ethiopian export abattoirs are halal, but the
perception among retail consumers is that they do not. As a result, Ethiopian meat is usually re-
packaged as Indian, Pakistani or Somali. Middle and lower classes buy Ethiopian meat, which
competes with meat from India, Pakistan, Kenya and Tanzania. There is some possibility of entering
the high-end market in UAE with organic certification. This would place Ethiopian meat in
competition with meat from Australia.
Other keys to success include repairing a damaged reputation among importers with respect to
upholding promises and maintaining consistent quality levels. There are currently a number of
importers of Ethiopian meat, some of which believe they have developed a good business relationship
with Ethiopian meat suppliers. However, there are still concerns regarding lack of uniformity in
supply—noting occurrences of hair, skin and fecal matter on imported carcasses—and escalating
75
prices, which have forced importers to lose Ethiopia’s market share to its competitors Kenya and
Tanzania.
According to one importer, there is a substantial price difference at retail between Ethiopian meat and
that from competitors like Somalia at retail outlets. Ethiopian meat sold at 28 AED (USD 7.60) per
kg, whereas Somalia sells for 35 AED (USD 9.50). This is because people place more trust in the
halal certification of Somali meat. Ethiopian meat is often re-packaged as Somali meat for this
reason. Also, live sheep imported from Somalia and slaughtered in Dubai are fresher than Ethiopian
meat, which has been transported. (Interview with Mr. Tenveer from Alsakar Livestock and Meat
Trade)
Live Animals: Animals of Ethiopian origin fetch high prices relative to Pakistani and Somali cattle.
Ethiopian cattle, especially Borena, are well known for their high quality.
COMPET IT ION
Competition is steep for live animal and meat imports into the UAE. Major competitors for live
animals are Somalia (sheep, cattle), India (sheep and goats), Iran, Kenya, and Australia (sheep).
Competitors for meat are Brazil, Australia, USA, India, and Pakistan, though UAE importers regard
Tanzania and Kenyan as close substitutes for Ethiopian meat. Kenya and Tanzania compete on low
prices and high quality.
UAE importers regard Ethiopian meat as being of low quality due to the prevalence of hair, skin and
fecal matter on carcasses. However, at the retail market, Ethiopian meat maintains a price premium,
due to its tenderness and taste.
Table 33: Live Animal Prices of Competitors in Dubai Livestock Market55

Competitor countries Size of Live Cattle Price (USD)
Pakistan Large 750
Somalia Small 500
Somalia Medium 550 - 580
Somalia Large 750 - 780
Ethiopia Large 850
55
Interview with Hameria Trading Company, UAE, February 2013
76
LOGIST ICS
Table 34: Beef Wholesale Prices of Competitors in UAE Markets56
No Competitor Purchasing Price Wholesale Price Retail Price

countries
1 Pakistan 4500 USD/ton 18-19AED/Kg= 4.5- 30 AED/KG
5.5USD/KG
2 Indian 4500 USD/ton 18-19 AED/kg= 4.5- 30 AED/KG
5.5USD/KG
3 Kenya 5200 USD/ton 18-22 AED/kg= 5- 28-30
6USD/KG AED/KG
4 Tanzania 5200 USD/tom 18-22 AED/kg= 5-
6USD/KG
5 Somalia 35 AED/KG
6 Ethiopia 5900 USD/ton 22-23 AED/kg= 6- 29–30
6.5USD/KG AED/KG
Live Animals: Ethiopian live animals must be quarantined in Djibouti for a minimum of 15 days
before being exported to UAE. The feeding expenses incurred often make the animals uncompetitive.
Meat: Meat is typically flown to Dubai via Ethiopian Airlines or Emirates Airlines. Ethiopian
Airlines is considered unreliable by importers, citing schedule changes and flight cancellations. Due
to these problems, meat imports were shifted to Emirates Airlines. Other challenges for meat
transport include lack of sufficient air space for Ethiopian mutton and goat meat, which become acute
during the peak seasons of Ramadan and Arefa.
OPPORTUNIT IES
There is a huge and growing demand for meat in the UAE and Ethiopian livestock are well known in
the market.
Further expansion into this market requires quality improvements, largely at the level of. Export
abattoirs and laboratories should be approved by Dubai Municipality. Approval depends on the halal
slaughtering procedure and the presence of a regional Islamic council.
The natural manner in which livestock are kept in Ethiopia creates a possibility for seeking organic
certification of Ethiopian meat. This could garner a price premium and tap into a new market
segment.
Another possibility is to market vacuum packed meat. Farm Fresh L.L.C and Federal Foods L.LC.
both expressed interest in procuring this product. This would be possible by establishing linkages with
Abergelle and Ashraf Export abattoirs, both of which have good facilities for frozen and vacuum
packed products.
56
Interview with Mr. Tenveer from Alsakar Livestock and Meat Trade, UAE, February 2013
77
The contact information of importers and retailers consulted for this study are captured below.
Name Organization Title Contact
Ibrahim Hameria Trading Managing Director 00971556144569

Live animals Importer
Mr. Abdul Hammed Alkarama Meat Trading Managing Director 00971506539516

Omer Meat Whole Seller
Mr. Jemmal Siam Trading Managing Director 00971506244397

Meat Whole Seller
Mr. Ali Alansari Reliance Trading Managing Director 00971508024051
Meat Whole Seller
Jaffer M.Salem Merkato General Trading General Manager 00971507397577
Meat Retailer
Amir Tamimi Rashid Al Jabri Meat Est. General Manager 00971502141206
Meat Retailer
Lankihir Sambahir Lahore Meat Shop General Manager 00971502794608
Meat Retailer
Tenveer Alsakar Livestock and Meat General Manager 00971505863069
Retailer
Firas Houssen Farm Fresh L.L.C. Division Manager 00971506543372
Algeber New Potential Importers
Abdul Samad Federal Foods Product Manger 00971508780969
Ansari New Potential Importers
Paul Murphy Abbeyfield Fine Food Com. Managing Director 00971508495767
New Potential Importers
78
ANNEX 9: CONTACTS FOR DAIRY DOMESTIC EMA
Date Of
Name Business Type Address Telephone
Contact
Sebeta Agro Industry

1 (Yohannes Belay - Farm Processor 6-2-2013 Sebeta 0911470035
Operation Manager)
Addis Ababa Trade & Addis

2 Government 6-2-2013
Industry Bureau Ababa
Addis Ababa Urban Addis

3 Government 6-2-2013
Agriculture Office Ababa
Ethiopian Meat and Dairy

4 Technology Institute Government 7-2-2013 Debrezeit 091128937
(Desalegn G/Medhin)
Addis
5 Ato Getachew Worku Producer 7-2-2013 0911225684
Ababa
Awash dairy products Addis

6 Producer 7-2-2013 0911613893
enterprise (Tiku) Ababa
Alpha Dairy Fodder and Producer (Foreign

7 9-2-2013 Debrezeit 0910279080
Dairy Farm origin)
Timret Agro Industry Share

Addis
8 Company (Dr Taffese Processor 7-2-2013 0930012319
Ababa
Mesfin)
Holland Dairy (Tewodros Processor (Foreign

9 9-2-2013 Debrezeit
Zewde - General Manager) origin)
10 Meskerem Solomon Producer 9-2-2013 Debrezeit
Addis
11 Amanuel Assefa Researcher 6-2-2013
Ababa
Minilik Tesfaye (Prima

12 Processor/Producer 27-2-2013 Dire Dawa 0915750805
Milk)
13 Yohanis Amare Producer 27-2-2013 Dire Dawa 0915739540
14 Mohammed Yuya Producer 4-3-2013 Dire Dawa 0915037219
15 Belete Alemayehu Producer 4-3-2013 Dire Dawa
16 Ambachew Producer 17-2-2013 Bahir Dar 09187661
17 Aster Alemu Producer 22/06/0512-2-2013 Awassa 0916828192
18 Gizachew Producer 13-2-2013 Awassa
Seron Dairy Farm (Ato

19 Producer 13-2-2013 Awassa 0911739614
Tamrat)
79
Date Of
Name Business Type Address Telephone
Contact
SOS children’s’ village

20 Hawassa branch (Ato Producer 12-2-2013 Awassa 0916863411
Mohammed)
21 Alemtsehay Wenjele Producer 18-2-2013 Bahir Dar 0911883619
22 Misganaw Ashebir Producer 18-2-2013 Bahir Dar 0918221702
80
REFERENCES
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in Ethiopia: A Review of Structure, Performance and Development Initiatives. Working paper
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df>
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1999 E.C) (RPGS 2006), Version 1.0 - 2008
Ethiopia. Federal Parliamentary Assembly. Commercial Registration and Business Licensing
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Ethiopia. Ministry of Agriculture & Rural Development. Livestock Development Master Plan Study.
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n.p., 2002. 22 July 2002. Web. <http://www.wipo.int/edocs/lexdocs/laws/en/et/et013en.pdf>.
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<http://www.lmiset.net/Pages/Public/Home.aspx>
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animal and meat export value chains for selected areas in Ethiopia: Constraints and
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Index Mundi. "Ethiopia Economy Profile." Ethiopia Economy. , 2012.
<http://www.indexmundi.com/ethiopia/economy_overview.html>.
Itab Consult Plc, ‘livestock resource potentials, constraints and opportunities for intervention by the
private sector’ Addis Ababa Chamber of Commerce and Sectoral Associations (AACCSA)
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Livestock and Livestock Characteristics. Rep. Vol. II. Addis Ababa: Federal Democratic Republic of
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LMD. “Dairy Value Chain for Ethiopia.” 2013.
LMD. “Domestic End Market Analysis: Meat, Live animals and Hides, Skin and Leather Markets in
Ethiopia.” 2013.
LMD. “Livestock Hides, Skins & Leather Value Chain for Ethiopia.” 2013.
LMD. “Meat and Live Animal Value Chain for Ethiopia.” 2013.
LMD Research Interviews and Reports. Unpublished research documents from LMD Research, 2012-
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Farmer, Elizabeth. End Market Analysis of Ethiopian Livestock and Meat. Rep. no. MicroReport
#164. USAID, Mar. 2010.
Negussie Tilahun. 1983. Livestock marketing in North-Eastern Ethiopia. Research Report 8. Joint
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U.S. Agency for International Development
USAID/Ethiopia
Entoto Street
PO Box 1014
Addis Ababa
83
Ethiopia

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Agricultural Growth Program-

Livestock Market Development

Date: April 5, 2013

Leather and Leather Products

Common and Cross-cutting Issues

Prices and Inflation

Identification and tracing

Quality, Certification and Reputation

Developing buyer-seller relationships

Table 1: EMA Team Members

a. Global Trade Statistics, 2011

Table 3: Informal Market Channels for Ethiopia's Live Animals4

Re-exportation and re-branding of Ethiopian animals to Middle Eastern markets is the

Table 4: Average Price of Live Animals in Addis Ababa in ETB8

ETHIOPIA’ S ADVANTAGE S AND OPPORTUNIT IES IN THE MARKETPLACE

COMPET ING COUNTRIES AND THEIR ADVANTAGES

Table 5: Competing Countries for Meat and Live Animals

Competitor countries Type of cattle Price (USD)

Pakistan Bigger cattle 750

Somalia Small 500

Ethiopia Bigger 850

United Arab Emirates – Sheep, Goats, Cattle

Yemen – Goats, Sheep and Cattle

MARKET OPPORTUNIT IES

Improve quarantine system - Quarantine standards need to be improved to meet buyer

Table 6: Annual per Capita Meat Consumption (KG)11

Table 7: Price of Beef and Mutton (USD)14

Superior High Moderate Fair Fresh at Frozen in Elfora’s Fresh in

9.80 8.20 6.50 4.40 3.85 2.20 4.90

MARKET REQUIREMENTS AND ETHIOPIA’S PERFORMANCE

Importers require responsive business relationships – Several importers complained about

ETHIOPIA’ S ADVANTAGE S AND OPPORTUNIT IE S IN THE MARKETPLACE

COMPET ING COUNTRIES AND THEIR ADVANTAGES

Table 8: Wholesale and Retail Prices for Competitor Countries16

Pakistan 18-19AED/Kg 30 AED/KG

Indian 18-19 AED/k 30AED/KG

United Arab Emirates – Mutton, Goat Meat, Beef

Angola – Frozen Borena Beef

MARKET OPPORTUNIT IES

Strengthen business relationships – Importers have negative opinions of Ethiopian business

Figure 4: Ethiopian Imports and Exports of HSL20

Knowledge of Ethiopian leather products is minimal at end market destinations.

MARKET REQUIREMENTS AND ETHIOPIA’S PERFORMANCE

Figure 5: Steps and Duration of Shipping Materials from Italy to Ethiopia

COMPET ING COUNTRIES AND THEIR ADVANTAGES

INDIV IDUAL MARK ET SUMMARIES

Turkey – Finished Leather and Manufactured Leather Products

Ethiopian products that have market potential in Turkey include:

Finished lining for shoes from cow, sheep and goat;

Italy – Manufactured Leather Products

MARKET OPPORTUNIT IES

Improve quality of manufactured leather products – Ethiopia needs to improve its

Reduce / streamline cumbersome government regulations for imports and exports of

Various factors act to depress demand for dairy products:

Dairy products reach the consumer through several market channels:

o Smallholder producers sell their dairy products directly to consumers in nearby

PROSPECTS FOR MARKET GROWTH

COMPET IT ION TO T HE F ORMAL MILK V ALUE CHA IN

Table 9: Imported Milk and Milk Products (KG)38

Annex 1: Ethiopia Export and Import Data by Value Chain .............................................................. 37