ecbp Organizes Value Chain Promotion

The Engineering Capacity Building Program (ecbp) organized the first training seminar concerning the methodology of Value Chain promotion in Ethiopia focusing on the leather sector’s development and its Value Chains, from August 7-11, 2006, at the ILRI center in Addis Ababa.

The seminar addressed Value Chain promoters and their partners, including representatives from six regions who will constitute the future core group of Ethiopian Chain experts.
The Value Chain, as part of the Private Sector, is one of ecbp’s key initiatives. ecbp considers the private sector to be the catalyst of development and will promote it through reform of the Technical and Vocational Education and Training system (TVET), including non-formal education as well as reform of universities’ technical faculties, and by strengthening quality management and production standards.
Value Chain analysis has three sequential steps. First, a business organization’s key activities are broken down and categorized. Second, potential cost advantages or competitive disadvantages are assessed. Finally, strategies are found to build a sustainable, competitive, advantage around those activities with potential.

ecbp has applied a training system to Ethiopia’s leather industry to implement this Value Chain approach. This entails examining the companies’ product at the micro-level – from the farmer to the market – to determine Value Chain constraints. Ultimately, the process aims to update the Value Chain holistically, using different instruments to resolve these constraints.
Ethiopia’s leather industry sector currently has the most potential for its competitiveness, but needs capacity development to fully satisfy the demands of the world market. One major challenge for the leather industry is the leather’s itchy quality, which is consequently costing Ethiopia 14 million USD annually. Adopting the Value Chain will help the industry evaluate, single out and tackle such obstacles.
This approach will support sector or Value Chain development so that a company earns more, can increase the value of its export, which will, in turn, improve the trade balance of the country.

The competitiveness of a national economy is not only a question of the entrepreneurial and technical capability of individual enterprises. It becomes manifest in a well developed market with established market relationships, the availability of technology and specialized business services, access to qualified staff, the existence of stable market regulations and active business organizations, among others. It is the combination of favorable conditions that allows enterprises to grow and become more competitive. During a press conference at the end of the seminar, German Müller, Head of Value Chain promotion and business re-engineering with ecbp, told journalists of his surprise at the quality of Ethiopian leather.
“It is a really ambitious venture which can achieve so much more. There is a lot of potential in the leather industry. I did not expect to see this in Ethiopia,” he said. “Ethiopia’s shoe export to Italy, for instance, can be taken as a good indicator that Ethiopian shoe companies are getting a reputation in the international market,” he noted.

Yitbarek Fantahun, leading the leather industry development team for the Ministry of Trade and Industry, also told journalists that he believes the leather industry is a priority and that the Value Chain approach will create an environment conducive to promoting its competitiveness in the international market.
Secretary General of the Ethiopian Tanners Footwear and Leather Product Manufacturing Associations, Abdisa Adugna, also saw the benefits of the Value Chain strategy. “Our association members are working hard for the export market to be very competitive in this process,” he said.
“We will be using this knowledge for re-engineering in order to increase efficiency and competitiveness in the international marke,” added Zewde Gezatu, President of the Ethiopian Consultancy Associations.