CDE

Dr. Samuel Kiruthu

Footwear manufacturing

The Eastern and Southern Africa Leather Industries Association (Esalia) was established in 1995 in Nairobi (Kenya), with the support of UNIDO (United Nations Industrial Development Organization). Its aim is to represent and promote the interests of the leather and footwear industry of the region, which includes the following member countries: Eritrea, Ethiopia, Kenya, Malawi, Namibia, Sudan, Tanzania, Uganda, Zambia, Zimbabwe

After numerous years of individual support to leather companies in the region the CDE had developed and implemented a four-year regional leather programme from 2003 to 2006 focusing in particular on the development of finished leather products, such as footwear and leather goods.

Esalia’s secretary general Dr. Samuel M. Kiruthu takes stock of the CDE programme’s achievements.

How would you summarize the CDE leather programme and Esalia's involvement?

The CDE’s sector programme for the leather industry (2003-2006) was implemented in the framework of the mandate given to the CDE by the Cotonou Agreement which focuses on the development of regional sector programmes.

The leather industry was identified as a priority sector for private sector development in Eastern and Southern Africa. A strategy was devised to respond to some of the local industries’ main challenges, such as lack of competitiveness, poor quality of raw material, limited investment possibilities, lack of intermediary organisational capacity, and environmental issues.

Esalia acted as the local coordinator for the implementation of the CDE leather programme under the supervision of the CDE’s leather programme coordinator and associate expert. Esalia dealt in particular with the two main objectives set for the programme with regard to the increase of company competitiveness and the improvement of the raw material quality.

What are the results of the CDE's leather programme with regard to the leather companies involved and the sector in general?

The leather programme created opportunities for the export of leather and manufactured leather goods to European markets and the promotion of regional trade of these goods, which has currently resulted in four company partnerships with Europe in Kenya and Ethiopia.

A number of companies also seized the opportunity to develop new skills in the field of design and development as well as to introduce changes in their production organization and to develop their export business.

What do you see as the main strengths and weaknesses of the CDE leather programme?

The positive contributions have been the opening up of the EU and other international markets for a number of local companies via targeted technical and marketing assistance.

Furthermore new skills in design and development have been transferred and finally, the programme enabled us to develop so-called exotic finished leather products from camel leather.

What in our view could have been done differently is to have a larger number of companies participating in the programme, which was restricted by the available budget. In addition, we witnessed reluctance on the part of EU companies to take part in initial investments. Finally, potential EU partners requested large quantities of samples without this leading to sustainable partnerships.

Finally, where would you see the CDE's future involvement in this sector and why?

We consider that to facilitate and help realize the development of intra-regional trade, the CDE’s involvement should focus on the following areas in future: build capacity in the development of production and design, address current issues such as Fairtrade and eco-labelling, continue encouraging investment in the sector through partnerships, and lastly develop regional market strategies through providing industrial and commercial expertise.

 

Contact Klaus Niederländer kni@cde.int

In close cooperation with the European Union (EU) Delegation in Cameroon, the CDE launched the Cameroon road maintenance programme on 14-17 January 2008, in collaboration with the Road Department of the Public Works Ministry, the Road Fund and the SSATP (Sub Saharan Transport Policy) programme (see also our article in Partnership n°86 of November 2007). The programme is due to last a year and is funded with an amount of €475 000.

This CDE programme comes within the technical assistance programme provided to Cameroonian SMEs and funded by the 9th EDF (European Development Fund).

The CDE programme is intended to complement the activities developed by the 9th EDF to consolidate road-sector SMEs’ technical abilities, by strengthening their management, and reinforcing professional associations’ service delivery to member-companies in the sector.

Finally, the programme will sensitize contracting authorities such as the Road Department, the Road Fund, SMEs and consultancies, about the GENIS road maintenance and management model (performance based contract).

Meetings were held with the following institutions : consultancy DHV (Netherlands), in charge of carrying out the programme, Yaounde management institute, and two professional associations in the public works sector (ANERTP and FECAP), with the purpose of presenting to them in detail the programme’s terms of reference and the various items which will be covered in the training seminars.

Concerning SMEs, emphasis will be put on the development of business leaders’ capacities to exercise leadership and improve their skills in the following areas :

• Strategy (analysing and understanding the business in its environment, to decide which operations to implement),
• Operations (managing operations and the company in a constantly evolving context in order to achieve its objectives and mobilize adequate human resources),
• Financial (operations management tools and assessing corporate performance),
• Commercial,
• Relational (good governance with administrations and donors …).

 
CDE assistance will reach about twenty SMEs in Cameroon in the Public works sector on the basis of the following criteria :

• Membership of a professional organisation,
• Involvement in road-maintenance procurement,
• Legal status (trade register),
• Size (turnover of at least € 250 000/year, or investment (buildings, equipment) worth € 80 000€, healthy cash flow,
• Management capacity of the entrepreneur,
• Quantity and quality of the company’s public works equipment,
• Technical references of the company (according to the size and complexity of work already undertaken),
• Access to financing (in particular for additional investments).

 
The CDE will then provide individual support to the SMEs by assisting them to formulate a business plan.

As regards professional associations, seminars will cover the following areas:

• Defining a realistic strategy, objectives and activities,
• Elaboration of a lobbying and fund-raising strategy to enable the sustainable operation of the association,
• Disseminate good practices through classic procurement and existing programmes,
• Elaborate and disseminate teaching material and databases corresponding to SME needs.

 
A final meeting was held on 17 January 2008 in Yaounde to set up the steering committee for the programme. It will meet three times per year. Its aim is to follow the execution of operations and formulate advice for possible amendment. The committee will include, among others, the representative of the EU delegation, the CDE, the Road Department, the SSATP programme, the Road Fund, the Yaounde management institute and professional associations.

Following a quick diagnostic of constraints affecting SMEs, the DHV consultancy will work on formulating training needs for SMEs and professional associations (February-March 2008) and put together training modules (April-May 2008). The first seminars intended for beneficiaries will start in June 2008.

 

Contact : Sid Boubekeur sbu@cde.int

Cutting edge technology for cocoa processing

The CDE supported training for engineers and technicians of Commodities Processing Industries, Ltd. (CPI). CPI’s first cocoa processing factory has just been set up in Tema (Ghana).

This initiative will mean cocoa is processed locally and good quality cocoa liquor is available to supply the international confectionary market.

CPI will purchase cocoa beans directly from the Ghana Cocoa Board (COCOBOD), will add local value through processing, and develop local market opportunities for semi-finished products.

Based on flavour quality and cocoa powder content, Ghanaian cocoa beans are among the highest ranked worldwide. With a 16% share of global output, Ghana is the world’s second largest producer of cocoa. However, less than 30% of Ghana’s crop is processed domestically. Additional local processing capacity will bring in hard currency, create jobs and ensure economic development is more sustainable. 

In the past a number of barriers limited foreign and local investment in Ghana’s cocoa processing industry. Cocoa and chocolate industries were mostly concentrated in consuming countries.

CPI anticipates a maximum plant capacity of approximately 15,360 metric tons of cocoa beans per year. Currently, the Company’s production is about 80% of this capacity, equal to 12,290 metric tons per year. 

To process the cocoa, CPI uses cutting edge technology that produces high quality products in greater volumes and at a lower production cost than before.

The processing plant is located in the Tema Export Processing Zone. This site was selected based on its proximity to the seaport and the COCOBOD storage facilities, and the availability of export facilities.

 

Contact : Jordi Tió Rotllan jro@cde.int

The most widely available cheese varieties are cheddar, mozzarella, and gouda

A market study of the cheese sector in Tanzania was undertaken by TGFA, the Tanzanian Graduate Farmers’ association, for the Tanzanian Milk Processors Association (TAMPA) and the CDE in 2006. Its recommendations have been made available to the milk processors and national authorities.

TAMPA was set up as an association in 2001 on the initiative of milk processors, and represents them at the Tanzania Dairy Board (TDB). The market study draws an overall picture of the Tanzanian dairy sector, highlighting its potential and constraints.

Tanzania remains largely agricultural. Agriculture represents 50% of GDP, 75% of merchandise exports and 80% of employment for a population of 38.5 million. The country owns the third largest cattle herd in Africa and the largest in the SADC (South African Development Community), with 17.7 million heads of cattle. Cattle raising accounts for about a third of total agricultural production, and 30% of this comes from dairy farming.

However, note the agriculture professionals conducting the study, 70% of dairy production comes from traditional farming, which is largely informal. The vast majority of the 1,400 million litres of milk produced each year is consumed raw close to the herds; only 10% is commercially processed, mainly in the North and East (Arusha, Kilimanjaro and Tanga).

Milk production is cyclical : abundant in the wet season – when production is high but transport and distribution limited – and reduced by two thirds in the dry season. Unfortunately the wet season surplus cannot be processed to preserve it, nor distributed due to the rainfall damage to infrastructures.

This large wastage could be reduced by increasing local processing of milk, either through industrial dairy processing – but this is expensive in cost and investment – or through processing into cheese, which needs less equipment and investment. That is the hypothesis the study sets out to verify.

Cheese consumption today

Cheese products are not part of national culinary and taste traditions, which explains that cheese product consumption is lower than in neighbouring countries. Milk consumption is also lower.

Cheese is principally consumed by foreigners or people of foreign origin, is imported and sold by hotels, restaurants and supermarkets. Prosperous regions, mainly the Northern touristic region (Kilimanjaro), the Western mining region (Mwanza), and the economic capital region Dar Es Salaam, are those where the foreign population is most numerous and cheese consumption highest.

Among the thirty cheese varieties sold in Tanzania, the study notes that the most widespread are cheddar, mozzarella, and gouda. Only gouda produced locally is appreciated by Tanzanians, among other reasons due to its lower price and its taste, notes the study, on the basis of customer-polling.

Prices and Volumes

The 125,000 tons of cheese imported to Tanzania in 2002 were sold primarily through hotels, restaurants and supermarkets, at a rate of about 37kg per month, at prices varying between 6,000 et 35,000 Tanzanian shillings a kilo (between 4 and more than 20 euros a kilo), according to the study.

Local producers, for their part, investigated in the study, sell between 6 and 550kg per month, at a price of between 3,000 and 6,000 shillings (2 and 4 euros) a kilo.

The higher price of imported cheese is due, the study says, to high customs duties on imports, and represents an opportunity for local cheese production.

The studies’ recommendations

The study advises to ensure the improvement of quality, packaging, sanitary and hygiene standards, which are still insufficient according to the FAO (UN Food and Agriculture Organization). These improvements will enable competition with imported produce on the Tanzanian market.

It suggests that a promotional and advertising effort, both public and private, is needed to develop consumption. This could be done it suggests through billboard advertising, the media (written and audiovisual), organising promotional events (e.g. the annual milk day in June, competitions and award ceremonies etc.) and public campaigns in schools.

In parallel, other measures have to be taken at the production and distribution levels. The expense of equipment, rarity of local credit and capital, are constraints born by local producers. The report suggests training professionals in production (in particular setting up a local technical training scheme), measures to develop public credit and guarantees, tax incentives (tax exemptions on equipment and inputs) and technology transfers.

Finally it suggests an effort to persuade local distributors to offer local cheese alongside imported varieties, which would enable consumers to compare prices.

In this regard, the study makes a final suggestion to identify traditional foods where cheese can be incorporated as an ingredient, such as as : mtori (boiled banana), boiled potatoes, pilau (spiced rice), makande (mixture of grains with beans), togwa (fermented porridge).

 

Contact Mary-Jane Caudron mjca@cde.int

Dressmaking workshop

"Création et production" trade fair

Under the 9th EDF (European Development Fund), the Haitian government and the European Union (EU) have decided to implement the PRIMA Haiti project (Programme de renforcement intégré du milieu des affaires en Haïti – integrated business climate programme).

Endowed with a total of €7 990 000, the programme started in 2005 and is due to last four years. It provides support to micro, small and medium enterprises with strong growth potential.

It is part of an overall programme worth €9 118 000, in which other contributors are the Centre for the Development of Enterprise (CDE) (€ 360 000) and the beneficiaries (€768 000).

The programme includes two components which are coherent with the new integrated approach of private sector development at the European Commission (EC).

The first aims to supply business support and advice and the second to reinforce intermediary organizations (IOs) such as professional associations, employers’ unions, company groupings and other support organisations.

The latter strengthening of IOs aims to enable them to better deliver services to private enterprises and contribute to improving the business climate.

Under the supervision of the Programme director, the CDE is in charge of managing the component dealing with support for enterprise.

The main expected outcomes of the programme are the reinforcement of companies’ and IOs’ capacity, and the improvement of the business climate through reinforcement of the public-private dialogue.

A great variety of projects

Following calls for proposals, a great variety of projects have been identified, involving numerous beneficiary institutions (Haitian IOs) of various types :

• Professional and employers’ unions such as bankers APB (Association professionnelle des banques), agro-professionals ANDAH (Association nationale des agro professionnels d’Haïti), internal auditors IIA (Institut des auditeurs internes), industries ADIH (Association des industries d’Haïti), tourism professionals ATH (Association touristique d’Haïti) or bi-national chamber CCIHC (Chambre de commerce et industrie haïtiano-canadienne).
• Financial institutions such as ANACAPH (Association nationale des caisses populaires d’Haïti), ANIMH (Association nationale des institutions de micro finance d’Haïti),
• Local associations such as cooperative SOCOLAVIM (Société coopérative Lavi Miyo), rural association APV (Association des paysans de Vallue), dressmaking development institute INDEPCO (Institut national pour le développement et la promotion de la couture) 
• Foundations like : Femmes en démocratie (FED), Fondation nouvelle Haïti (FNH) and Centre pour la libre entreprise et la démocratie (CLED).

Two further major programmes were approved concerning the Haitian Chamber of Commerce and Industry (CCIH - Chambre de commerce et d’industrie). These were the creation of an arbitration and settlement centre within the Chamber, and a programme to restructure and reinforce the national and local chambers (chambres départementales). This aims to establish an effective decentralized network of chambers of commerce serving the private sector. PRIMA’s contribution amounts to HTG 37.8 million (about €670 000) for two projects worth a total of HTG 42.2 million (about €730 000).

The other activities funded comprise : a bi-national Haiti-Dominican Republic trade fair; diagnostic studies of promising industries for SMEs, followed by conferences to present these diagnostics’ results and prospects; the establishment of a database of Haitian consultants.

In budgetary terms, PRIMA has committed a total amount of €3 million over a period of 18 months.

Support for enterprise will be served through Haitian IOs, and following the industry diagnostics, the calls for proposals will reach a wide range of enterprises in promising areas.

In addition to the resources from PRIMA, the CDE may also utilize its own financial resources to support individual businesses.

 

Contact Patrick Keene pke@cde.int

Tourist accomodation in Tobago

Ten small and medium enterprises in the tourism industry on the island of Tobago (Trinidad & Tobago) have benefited from CDE support towards obtaining a dual environmental and sanitary certification increasingly demanded by tour operators.

The certifications are likely to be obtained starting at the end of January, after audits for HACCP (sanitary) and supplying their data for Green Globe (environmental).

The businesses concerned are inns, hotels, guest houses and tourism residences, varying from 6 to 38 rooms or 10 to 20 villas.

Currently no tourism accommodation on Tobago is certified to be « green » (protecting the environment), and an increasing number of tour operators now demand HACCP certification, in the field of food safety.

HACCP (Hazard Analysis and Critical Control Point) is currently a sanitary health reference. It is demanded by many large operators, particularly in the neighbouring North American markets.

Green Globe is an organisation which delivers certifications (Green Globe Benchmarking and Green Globe Certification) which guarantee respect for the environment, and sustainable development.

The CDE selected three consultants to implement the programme, which was based with local operator Ecolink. The consultants were trained in the SMART integrated management system (Sustainable Management Action Research and Training) from August 2006, by two international experts. The programme was branded SMARTobago.

The Green Globe Benchmark certification entails collecting the necessary benchmarking data – particularly those concerning water and energy consumption – from the participating enterprises, and then submitting them to Green Globe.

To obtain the HACCP certification, the SMEs need to be audited by accredited agents.

This initiative will in any case be a first for the Tobago tourist sector. It is intended to serve as a model for tourism development in other Caribbean countries where tourism is a major contributor to the economy.

 

Contact : Peter Alling pal@cde.int

A recent study conducted by the African Development Bank (ADB), takes stock of the overall situation of financial flows due to the African diaspora. According to the study, a share of these remittances is intended for investment in economic activities and real estate. A strong correlation is found between migrants’ level of education and the use of transferred funds. Migrants in low-qualified jobs (75%) remit 10 to 15% of their income – 100 to 160 euros per month per migrant – to support consumption of their families back home. While the most qualified or highest-paid migrants devote most of their remittances to investment in their country of origin. Looking at age-groups, the share of funds devoted to real estate and the productive sector within remittance volumes increases over the age of 40.