Nairobi business ventures eyes 25 leather in under five years

NAIROBI, KENYA: Nairobi Business Ventures (NBV), a leather products retail chain operating under the brand name KShoe, has embarked on an accelerated expansion drive that will see it roll out more than 25 stores in less than five years as it prepares to venture into leather products manufacturing.

Speaking when the retailer opened its 5th shop at T-Mall, Lang’ata Road, the KShoe Executive Chairman, Vasu Abotula said they are speeding up the expansion to benefit from the Government’s 10-year industrialisation plan. 

 “We are venturing into manufacturing in the near future and these outlets will serve as an elaborate distribution network for our leather products,” said Vasu.

The government, through the industrialisation Cabinet Secretary Adan Mohamed, recently announced the Kenya Industrial Transformation Programme which plans to support the development of local manufacturing. It is estimated that 75 per cent of global trade is in manufactured goods.  

“We are in the process of raising capital to venture into leather manufacturing. A high tax regime of up to 40 per cent on raw hides and skins exports has created a great business environment for local manufacturers of leather products,” says Mr Vasu.

Raj Srungarapu, the KShoe Chief Executive Officer said value addition would help the country rake in higher revenues by shifting from exporting raw and semi-processed hides to being a global supplier of finished leather goods.

Kenya’s leather sector is presently estimated to be worth about Sh10 billion, but government experts estimate that value addition has the potential to increase the country’s earnings from leather to 10 times more.

The Leather Development Centre recently projected that if the country produced leather from all its hides and skins, this figure can rise exponentially. According to the Industrialisation Ministry, shoes are 12 times more expensive than the raw hides they are made from, but which are mostly exported unprocessed.

Mr Raj said the Government’s announcement of the planned construction of Sh10 billion leather hub in Athi River is a clear indicator of the economic potential of the industry.

“I am confident that KShoe plans to venture into manufacturing will yield great returns, especially during this phase when the Government is keen to revive the tanning industry and make Kenya a big exporter of shoes, bags and other products,” said the KShoe Chairman.

The retailer currently has outlets in Nairobi Central Business District as well in Ongata Rongai and Village Market. “We are soon opening another branch at Capital Centre Mombasa Road,” said Mr Vasu. 

According to Mr Vasu, with continued incentives from the Government and technology transfer from foreign companies, Kenya has the capacity to produce its own leather-wear as opposed being a dumping destination for cheap imports which undermine local manufacturing.