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Hiroki Co. Ltd, a Japanese-based leather products factory, is set to start production in Ethiopia in mid-March, with an investment of close to 10 million Birr (US$519,500).
It is the first Japanese foreign direct investment (FDI) to Ethiopia in the leather industry, Hiroki, which already established the Hiroki Addis Manufacturing Company in September last year, will start producing leather garments, bags, wallets and shoes for export to the Japanese market.
The Company decided to start production having studied the marketability of Ethiopian leather, says Youngil Song, President of Hiroki Addis.
“We decided to open a factory in Ethiopia because of the availability of quality leather raw material,” Song said. “It is one of the finest quality leather in the world.”
Hiruki’s decision to open up a factory in Ethiopia – which will be based in a rented building in Alemgena town, in the Oromia Region, located some 26 km from Addis Ababa – was also prompted by the availability of cheap labour.
Hiruki’s leather jackets are sold at high prices in Japan, costing between US$2,000-5,000 dollars. Hiroki’s leather specialty shop is located in the Yokohama Motomachi area, which is one of the biggest shopping streets.
The factory targets an annual production of 1,300 pairs of Ethiopian sheepskin garments, 8,000 bags, 3,600 wallets and 7,000 shoes during the first year of production. The Company will start production with 30 employees, according to Song.
In three years time, however, it plans to acquire a plot in the Bole Lemi Industrial Zone – the first hub exclusively for export-oriented manufacturers – to build its own factory. When it moves to Lemi, the factory plans to raise the number of employees to over 100.
“Hiroki’s decision to invest in Ethiopia is a welcome decision, as it focuses on high quality products,” says Tadesse Haile, State Minister for Industry. “They recognise the unique character of Ethiopian leather.”
The decision to start production in Ethiopia is part of Hiroki’s 13-year plan, which also includes introducing products to the European market in 2015.