The fledgling Tannery Industries Botswana (TIB) is on the verge of serving the international markets with processed hides but, at the same time, launched a scathing attack on the local financial institutions for turning a deaf ear on cash-flow needs.
The TIB has recently been approached by internationally renowned shoe manufacturers from France, Malaysia, Sri Lanka, Colombo and Indian jackets makers and some South African car seats dealers to supply them with the exotic leather but banks could not heed its needs for bridge financing.
“We have been approached by companies in France, Asia and some in South Africa to supply them with leather. France is more interested in upper shoe leather and finish shoe uppers while other countries are interested in upholstery and safety shoes leather,” TIB’s head of marketing and director, Molekantwa Mmapatsi, told The Sunday Standard.
TIB, which is by far the largest and most technology advanced tannery in the country, started early this year with the financial backing of Venture Partners Botswana/ CEDA fund.
But since its inception, it has been beset by a number of bureaucratic red-tape steaming from the Botswana Meat Commission, the then envisaged main supplier of hides.
The BMC tannery ÔÇô which processed hides at the wet blue stage (initial stage) ÔÇömysteriously closed on the eve of the TIB’s opening of shop due to some blockage of a three kilometer drain which management was not prepared to unblock.
But the Botswana Development Corporation offered to buy the BMC and open shop to support the directors who used to run the tannery, but, bureaucratic red tape has snarled progress on the bid.
“BDC has long offered to buy the tannery but the whole thing has been bogged in some red tape, while we are accumulating unnecessary costs,” Mmapatsi said.
“This has resulted in some unnecessary costs. What we do is that we buy hides at BMC and take them to South Africa to be processed to the wet blue stage. We had to ask our customers who process them to wet blue to pay VAT in South Africa on our behalf and when they finish that cost is transferred to us. Furthermore, we incur costs of transporting them in and out of South Africa,” he said. “Most of the people who now intend to buy leather from us used to buy from BMC,” he said.
Mmapatsi further said the other problem that they are faced with is that BMC is not operating at full capacity and, therefore, is not producing 1,200 hides per day and that they are only getting 400 hides a day.
“Our plant is designed to take 1000 hides a day, while BMC is designed to provide or produce 1200 hides a day and that is a constraint to us,” he said.
However, TIB is to embark on a nation wide hides collection campaign targeting weeding arties, funerals and local butcheries and abattoirs to try to meet its daily quota and satisfy the market.
The company is also serving the local upholstery market from small to large scale.
“When we started we knew that the local market could not consume all our leather production and we had to look at other countries,” he added.
“We are now guaranteeing Batswana a market that if they can collect we will buy from them.
“And at the same time, we think that the government should work on the export levy of leather,” he added.
Regionally, the export levy of leather is as high as 60 percent being an attempt to protect sensitive products or industries (the emerging local industries) while in Botswana it is capped at two percent. Namibia is among the countries which are aggressively protecting its sensitive industries in a bid to protect jobs and skill transfers as part of the beneficiation process.
TIB employs 60 people, most of them Batswana.