Production, sales trend shows growth in local shoe industry

When I started in 2009, I could only produce 20 pairs of shoes per month and sell about 5. But today, I can produce about 200 pairs and sell more than 80 in a month,” CEO of Giddins, Gideon Dendzo, a shoe manufacturer in Accra says.

At last, the message to consume made in Ghana products seems to be bearing fruit, as the local shoe industry is reporting signs of growth in both production and sales revenue.

Even though the industry does not have any official data to show its growth trends over the years, information our journalists Obed Attah Yeboah and Dziedzom Atoklo gathered from some of the local startup shoe manufacturers indicates both revenue and production levels have more than doubled from the time they started their business.

“I remember when I started in 2015,” said CEO of Takoradi-based Kolics Ventures, Peter Kweku Anowie. “We produced less than 50 pairs of shoes a month. But now we produce more than 110 pairs of shoes on average monthly.”

Revenue has followed in the same direction for Kolics Ventures, as in January 2019 the company sold 87 percent of the 116 pairs of pairs of shoes produced.

Another manufacturer in Accra, Daniel Odonkor, CEO of Chaste Shoes, had a similar story to tell.

“We used to make 5 pairs of shoes in a week, but now we are able to produce at least 15 pairs weekly.” This means he produces over 60 pairs of shoes per month, a 300 percent increment from where he began.

Mr. Dendzo – mentioned at the outset of this story – produces, in addition to the shoes, about 200 pairs of sandals monthly and sells over 70 percent.

All these show that more and more people are developing an interest for footwear made in Ghana, and the manufacturers attribute this to improvement in the quality of the shoes and response by Ghanaians to the campaign urging to consume made in Ghana goods.

Despite the growing trend, challenges still remain in the industry. Cost of production continues to rise, based on the fact that almost all raw materials used for the manufacture of shoes in the country are imported. And considering the cedi continues to depreciate against the dollar—more than 10 percent from January 2018—prices of such materials on the market are never steady.

The CEO of Chaste Shoes is advocating for a tannery to be built in Ghana to provide manufacturers easy access to quality and affordable leather.

Albeit patronage has increased, perceptions about locally-made products continue to hurt the industry. The manufacturers say there are some who still think made in Ghana shoes are not durable, even though they have not worn any before.

Again, the age-old capital inadequacy challenges of small businesses cannot be overlooked in the shoe industry. For the manufacturers to produce with a fine finish, they need modern machines to do so. But getting the funds required to purchase these machines remains a dream for many local shoemakers.

The manufacturers are calling on government to assist them with easy and cheap access to funding to expand their business.

“Government should assist us with long-term capital so that we can purchase modern machines that will enhance our work and give the shoes a fine finish. The last time I asked about the price of one of the machines, it was around GH¢40,000 – and that is even a used one, not brand-new. So, if some of these machines can be bought for us on a long-term credit basis, it will really help us,” the CEO of Giddins said.

As for the CEO of Kolics Ventures, he wants government to come out with a comprehensive policy aimed at growing the industry and making it more competitive.

“Policies must be made to make doing business for startups, especially the shoe industry, easy. Policies in the form of tax rebates that are given to foreign investors must also be extended to us to make our businesses grow and become more competitive.”

According to Statista, in 2017 the US had the largest footwear market in terms of revenue of almost US$80billion. China followed with more than US$58billion, even though it was the leading producer with 13 billion pairs of shoes.

The global footwear market, data from Allied Market Research says, is expected to garner US$371billion by 2020.

So, even without any official data on the shoe industry in Ghana, the market value shows high growth potential of the industry – which can contribute significantly to the economy in the form of jobs and taxes if the challenges highlighted by the manufacturers are addressed.