Nigeria Moves to Grab Share of $730bn Leather Market, Announces Plan to Establish Tanneries Across 36 States

The Nigerian Institute of Leather and Science Technology (NILEST) has announced plans to establish mini tanneries across the 36 states to bolster the leather industry’s capacity to process hides and skins into leather.

Director-General Mohammed Yakubu highlighted this initiative in a recent interview, explaining that these tanneries will play a vital role in reviving the leather sector and reducing Nigeria’s dependence on animal skin for consumption, particularly in the form of “ponmo.”

Missed Opportunities in a Booming Global Market

The global leather goods market was valued at approximately $440.64 billion in 2022 and is projected to reach $738.61 billion by 2030, growing at a compound annual growth rate (CAGR) of 6.7% from 2023 to 2030. Leather’s applications span a wide range of industries, including luxury goods, fashion, and automotive, with strong demand fueled by international markets.

However, Nigeria has largely missed out on this lucrative market due to domestic consumption of hides and skins as ponmo, instead of processing them into leather goods for export.

In Lagos State alone, where approximately 100,000 cows are slaughtered daily, only a small fraction of the hides can be processed, as there are only 48 tanneries available to manage the output.

Yakubu noted that Nigeria’s leather industry, once thriving with 84 active leather companies that even had branches in Italy and Spain, has declined due to infrastructure challenges. According to him, reviving this sector could generate significant foreign exchange and create employment opportunities.

While technological expertise is not an issue—NILEST has been equipping tanneries with the necessary technical knowledge—the industry faces steep production costs due to high power expenses. The leather industry’s production costs are largely driven by power, accounting for more than 50% of expenses, which limits its competitiveness against countries like China, Brazil, and India.

Yakubu emphasized the need for government concessions, especially regarding affordable energy.

Power, he stressed, is the primary obstacle, rather than tax issues, and should be the focus of government support to help leather processing industries grow and attract foreign investment.

“We must provide cheap power to our industries, particularly the leather industries, for them to be able to compete with their foreign counterparts,” he said.

The planned mini tanneries, producing between one to five tonnes of leather per week, could absorb a substantial portion of these hides and skins, potentially reducing ponmo consumption and directing resources toward economic growth.

Addressing Unemployment Through Leather Production

NILEST’s plans include establishing mini tanneries in clusters across Nigeria, with each processing unit focusing on leather production for export. Yakubu anticipates that these tanneries will increase employment for the country’s youth and contribute to foreign exchange earnings.

“Whatever concession is given to the industries will never be a waste,” he remarked, emphasizing the importance of prioritizing the leather industry’s energy needs to revive its capacity for production and export.

Establishing mini tanneries is expected to help Nigeria capture a slice of the global leather market, unlocking a revenue stream that could contribute to the nation’s economic stability and growth. The initiative also aligns with broader economic goals of reducing import dependence and enhancing Nigeria’s position in global trade, providing a new path for the country’s industrial sector and a more sustainable approach to utilizing animal resources.

If successful, this initiative will not only reduce ponmo consumption but also position Nigeria as a competitive player in the global leather market, transforming a valuable natural resource into an engine of economic growth and a source of international revenue.