Federal Democratic Republic of Ethiopia

Champion Product Approach
Implementation Assistance Survey
in Ethiopia (Phase 2)
Final ReportFebruary 2017
Japan International Cooperation Agency(JICA)
Foundation for Advanced Studies on
International Development（FASID））
Dentsu Inc.

IL
JR
17-028

Table of Contents
Abbreviations ...................................................................................................... v
Chapter 1 Outline of the Study
1.1

Background ............................................................................................. 3

1.2

Purpose of the Phase 2 study .................................................................... 4

1.3

Summary of the study .............................................................................. 4

1.3.1 Implementation ..................................................................................... 4
1.3.2 Implementation schedule ....................................................................... 5
1.3.3 Implementation structure ....................................................................... 8
Chapter 2 Review of the CPA Phase 1
2.1

Outline of the CPA Phase 1 .................................................................... 13

2.2

Remaining issues for CPA Phase 2 .......................................................... 14

2.3

Responses to the challenges in CPA Phase 2 ........................................... 17

Chapter 3 Trial of Measures for Candidate Champion Products
3.1

Branding in CPA Phase 1 ........................................................................ 23

3.2

Branding workshop ................................................................................ 24

3.2.1 Identification of Ethiopia’s unique assets ............................................. 24
3.2.2 Set a production policy for brand video ............................................... 27
3.2.3 Identifying a brand concept ................................................................. 29
3.3

Brand video ........................................................................................... 31

3.3.1 TV conference for brand video ............................................................. 31
3.3.2 Local video shooting ........................................................................... 32
3.3.3 Discussion on editing policy and agreement ......................................... 33
3.3.4 Completion of the brand video ............................................................. 33
3.4

Creation of a website ............................................................................. 35

3.4.1 Web contents ....................................................................................... 35
3.4.2 Web content management system ......................................................... 36
3.5

Verifying the effects of measures for all champion product candidates .... 37

Chapter 4 Activities in Leather Sector– Trial of Branding and Promotion (Oct 2014 – Jan 2016)
4.1

Identifying a target sector ...................................................................... 47i

4.1.1 Domestic market research .................................................................... 47
4.1.2 Selection of partner companies ............................................................ 54
4.2

Identifying a brand concept for the target sector (sheepskin) ................... 58

4.2.1 Branding workshop .............................................................................. 58
4.2.2 Define the brand concept, choose a brand name,and create a brand logo ........................................................................... 60
4.2.3 Creation of brand book ........................................................................ 61
4.2.4 Registering a brand as a trademark ...................................................... 62
4.3

Development of promotional tools .......................................................... 65

4.3.1 Small booklet ...................................................................................... 65
4.3.2 Production of a poster ......................................................................... 66
4.4

Understanding situations of the leather industry in Japan ........................ 66

4.4.1 Summary of the product launching event .............................................. 66
4.4.2 Visit to the glove manufacturing cluster in Shikoku .............................. 68
4.4.3 Consideration of cooperation with the leather industry in Japan ............ 70
4.5

Exhibition at JFW-IFF ............................................................................ 71

4.5.1 Select exhibiting companies ................................................................ 72
4.5.2 Basic concept for the exhibition ........................................................... 72
4.5.3 Assistance with product development ................................................... 73
4.5.4 Display at the stand ............................................................................. 74
4.5.5 Exhibition summary ............................................................................ 75
4.6

Workshop in Japan (July 2015) ............................................................... 77

4.7

Trades with buyers ................................................................................. 79

4.7.1 Measures to promote trades with buyers ............................................... 79
4.8

Promotional activities of CPA ................................................................ 82

4.8.1 Promotional activities in Japan ............................................................ 82
4.8.2 Promotional activities in Ethiopia ........................................................ 82
4.9

Setting up a structure for brand maintenance and management ................ 83

4.9.1 Workshop for brand operational management ....................................... 83
4.9.2 Clarification of the stakeholders’ roles ................................................. 85
4.10

Consideration of issues identified in the interim wrap ............................. 87

Chapter 5 Activities in the Leather Sector– Actions after the Interim Wrap-Up (Feb. 2016 – Nov. 2016)
5.1

Support for product development and quality improvement ..................... 98ii

5.1.1 Action 1: Understanding of the quality requiredby the Japanese market ........................................................ 98
5.1.2 Action 2: Initiative to improve design and technology .......................... 98
5.1.3 Action 3: New product development .................................................. 101
5.1.4 Action 4: Development of flagship products ....................................... 103
5.1.5 Action 5: Initiative for implementation ofpre-delivery product inspection ................................................ 104
5.2

Display at the exhibition and other promotional activities ..................... 104

5.2.1 Action 6: Brand promotion ................................................................ 104
5.2.2 Action 7: Creation of business templates ............................................ 116
5.2.3 Action 8: Increase of the role of the Embassy of Ethiopia
in Japan and MOFA .................................................................. 116
5.3

Visit to Japan in April 2016 .................................................................. 117

5.3.1 Action 9: Cooperation with Japanese industry associations ................. 117
5.4

Research on structural problems in the Ethiopian leather sector ............ 118

5.4.1 Action 10: Strengthening of competitivenessby reducing order quantities .................................................... 118
5.4.2 Action 11: Promotion of cooperation between
tanners and manufacturers ....................................................... 119
5.4.3 Action 12: Initiatives to deal with upstream issues in the value chain . 120
5.4.4 Action 13: Improvement in the quality of leather materials
and yield rate .......................................................................... 121
5.5

Building of a brand system ................................................................... 121

5.5.1 Action 14: Operation of accreditation system ..................................... 121
5.6

Efforts for other issues ......................................................................... 123

5.6.1 Action 15: Activities to encourage inward investment in Ethiopia
by foreign companies .............................................................. 123
5.6.2 Action 16: Introduction of kaizen activities ........................................ 123
5.6.3 Action 17: Streamlining of import/export procedures ......................... 123
Chapter 6 Activities in the Leather Sector– Further Strengthening of the Brand System (Nov. 2016 – Feb. 2017)
6.1

Implementation of the visit to Japan ..................................................... 127

6.1.1 Introduction on the visit .................................................................... 127
6.1.2 Study tour ......................................................................................... 127
6.2

Brand workshop in Japan ..................................................................... 129iii

6.2.1 Summary of brand workshop .............................................................. 129
6.2.2 Results of brand workshop ................................................................. 129
6.3

Research on LIDI’s testing and analytical capacities forthe quality of Ethiopian leather materials ................................................ 131

6.3.1 Overview of the mission to Ethiopia .................................................. 131
6.3.2 Test results of the quality of leather materials and products ................ 132
6.3.3 LIDI’s testing and analytical capacities .............................................. 133
Chapter 7 Summary of the Achievement and Recommendations
7.1

Remaining issues and recommendations ............................................... 137

7.1.1 Remaining issues and recommendations
on the downstream of the value chains ................................................... 139
7.1.2 Remaining issues and recommendations
on the midstream of the value chains ..................................................... 142
7.1.3 Remaining issues and recommendations
on the upstream of the value chains ....................................................... 146
7.1.4 Issues in the practices of cross-sectoral CPA ...................................... 147
7.2

Conclusion ........................................................................................... 150

Appendix
Appendix 1: Brand video (Story board) .......................................................... 155
Appendix 2: Brand book ................................................................................ 161
Appendix 3: Mini leaflet ................................................................................ 166
Appendix 4: Brand leaflet .............................................................................. 167
Appendix 5: Poster ........................................................................................ 172
Appendix 6: Certificate of trademark registration ........................................... 175
Appendix 7: Media exposure in Japan............................................................. 176iv

Abbreviations
AALF

All African Leather Fair

CPA

Champion Product Approach

EHL

Ethiopian Highland Leather

EIC

Ethiopian Investment Commission

EIPO

Ethiopian Intellectual Property Office

ELIA

Ethiopian Leather Industries Association

FASID

Foundation for Advanced Studies on International Development

FOB

Free on Board

GDP

Gross Domestic Product

HHI

Herfindahl-Hirschman Index

ICCPA

Implementation Committee for Champion Product Approach

JFW-IFF

Japan Fashion Week International Trade Fair

ISO

International Organization for Standardization

JICA

Japan International Cooperation Agency

JIS

Japan Industrial Standard

JETRO

Japan External Trade Organization

LIDI

Ethiopia Leather Industry Development Institute

MOA

Ministry of Agriculture (Ethiopia)

MOFA

Ministry of Foreign Affairs (Ethiopia)

MOI

Ministry of Industry (Ethiopia)

MOLF

Ministry of Livestock and Fisheries (Ethiopia)

MOT

Ministry of Trade (Ethiopia)

MOQ

Minimum Order Quantity

NGO

Non-Governmental Organization

OEM

Original Equipment Manufacturing

OJT

On-the-Job Training

PDC

Products Development CenterSNS

Social Networking Service

sq ft

Square feet

TICAD

Tokyo International Conference for African Development

UNIDO

United Nations Industrial Development Organization

VM

Visual Merchandisingv

Chapter 1

Outline of the Study

Outline of the Study
1.1

Background
Ethiopia has maintained a relatively high Gross Domestic Product (GDP) growth rate

in recent years. The secondary industry – especially the manufacturing sector – however,remains an obstacle for the realization of sustainable economic growth and the export expansion
as an important source of foreign exchange. In 2009, ex-prime minister of Ethiopia, Meles Zenawi,
officially requested that the Japanese government learn the East Asian economic development andindustrial policy from the Japanese side. JICA and the National Graduate Research Institute for
Policy Studies (GRIPS) have held policy dialogues and working-level talks on the key issuesof industrial policy with the Ethiopian side, including Ethiopian prime minister and Cabinet
ministers since 2009 (Study on Industrial Policy Dialogue in Ethiopia [From June 2009 to May
2011], and Study on Industrial Policy Dialogue in Ethiopia (CPA Phase 2) [From January 2012 toJune 2016]). During these dialogues, a particular export promotion program “Champion
Product Approach” (CPA) was proposed in 2012. CPA is a unique program aimed at
improving the country’s image through exporting high-quality products embodied by the
Ethiopian history and culture. The CPA project sets the long-term goals: Establishment of“better” image of Ethiopian products led by “champion products” and export promotion of
all Ethiopian goods.
The “Study on Implementation Support of ‘Champion Product Approach’ in Policy
Dialogue on Industrial Development in Ethiopia (Phase 1)” (CPA Phase 1) was conducted in
FY 2013. The study intended to accumulate practical experience in the market, including
participation of partner companies’ display at African Fair as Tokyo International Conference for
African Development (TICAD) V side event, test marketing at Tokyu Department Store, and theirdisplay at an international trade show in Ethiopia. The knowledge gained through these experiences
was instrumental in putting together a manual entitled “Introduction of Champion ProductApproach Case of Ethiopian Export Strategy Ver1 2014” (the CPA manual) as a tool to review
the concept of CPA and to put the idea into practice.
CPA Phase 1 demonstrated that high-quality Ethiopian products have great potential
to be accepted in the Japanese market, although no contract has been signed with a Japanesecompany during the study. To achieve the goal of the CPA project, the study highlighted that
Ethiopian products need to gain “better” and “excellent” international recognition in the
global market at both the country level and the product level by the branding of the highquality products as well as their promotion. Also, the CPA Phase 1 raised the issue that noframework was constructed to encourage the Ethiopian side to take the initiative in theapproach. Accordingly, “Champion Product Approach Implementation Assistance Survey”(CPA Phase 2) was started to implement as practical assistance for these remaining issues.

3

1.2

Purpose of the Phase 2 study
The CPA Phase 2 study is intended to increase the effectiveness of CPA as a tool tofacilitate exports through an implementation of branding and promotion strategies with the
Ethiopian initiative. There are four main tasks for the achievement of the purpose:
1.

Review the CPA Phase 1 study;

2.

Implement various measures for all candidate champion products (i.e. prepare
video and photos and make use of them, and provide ideas for promotional
activities that would encourage the Ethiopian side to demonstrate an initiative);

3.

Conduct branding and promotional activities with a particular focus on a target
sector; and4.

Revise the CPA manual and prepare an action plan about lessons and knowledge.

1.3

Summary of the study

1.3.1

Implementation activities
The four tasks mentioned in 1.2 above are described in detail in Table1-1.
Table 1-1 Activity plan and deliverables

Task
1. Review the
CPA phase 1

2. Implement
various measures
for all candidate
champion
products

3. Conduct
branding andpromotional
activities
1) Branding with aparticular focus
on a target sector
2) Activities inJapan to promote
target products

Activity
Review the CPA phase 1 and, based on this,prepare an inception report for the CPA Phase 2,
and then reference materials on CPA for the
Implementation Committee of CPA, ICCPA
Prepare video and photos through a series ofworkshops and TV meetings with ICCPA on “Pride ofCreation,” the branding concept of champion
products, as the theme.
Brainstorm sessions to review various measures, so
as to make use of video and photos, encourage theEthiopian side to take the initiative, and support
activities to put these measures into practiceBased on the results of market surveys both inJapan and Ethiopia, from among six (6) productgroups selected in the CPA phase 1, choose one (1)sector the highest potential in the Japanese market.
In addition, from that sector, select those companies
suitable to be part of branding trial and promotional
activities through an on-site survey in Ethiopia.
Identify a brand concept (a brand promise) and abranding tool at workshops and TV meetings withboth ICCPA and participating companies
Implement promotional activities, e.g., participationin exhibitions, doing test marketing. On the occasionof an exhibition, a delegation is to be invited to4

Deliverable
Inception report
Referencematerials on CPA
Video and photos
Ideas forpromotional
activities

A method to selecta target sector forbranding
Brand promise,branding tool(brand name, brandlogo, brand book,etc.)
Report on
promotional
activities

4. Revise the CPA
manual andprepare an action
plan

1.3.2

Japan so that the Ethiopian companies can get
hands-on experience in the Japanese market.
Analyze the outcome of branding trial andpromotional activities
Building on the activities and deliverables in Task 2
and Task 3, revise the CPA manual. Also, extract
success stories and lessons and reflect on these in
the manual. The revised manual shall be shared withICCPA.
For the CPA sustainability and with the outcome of
discussions with ICCPA, prepare an action plan.

Revised CPA
manualAction plan

Implementation schedule
The above activities, primarily scheduled by March 2016, are continuing by February

2017 for continuous brand management started-up in CPA Phase 2. The modified
implementation schedule of CPA Phase 2 with the extension period is shown below:

5Figure 1-1 CPA Phase 2 implementation schedule (including extended period)

6

Table1-2 shows the surveys conducted in Ethiopia by the Japanese expert and visits toJapan.
Table 1-2 Field survey and visit to Japan
Delegation
No.1

Objectives-Launch ICCPA, appoint the chairman, nominate leading
members-Approve an action plan for branding trial and test marketing-Identify one sector-Gather information to select companies in the chosen sector
for branding and promotional activities-Suggest and discuss directions for production of a brandvideo, featuring all CPA sectors-Suggest and discuss directions for sheep leather branding (asa selected sector)-Find local subcontractors involved in video production-Brand video shooting-Production of graphics for a brochure and a brand book
-Development of leather products for participation in
IFF(International Fashion Fair)-Preparation for the “Ethiopia Business Investment Seminar” inTokyo-Displayed Ethiopian products in the Ethiopia Business
Investment Seminar in commemoration of inaugural flight between
Addis Ababa and Tokyo-Held a preview for leather material distributors (wholesalers)-Share brand promise and tools with stakeholders involved inbranding of champion products- Discussions concerning a registered trademark of branding
as well as its maintenance and management-Preparation for IFF, coordination of cooperation-Confirmation of progress in production of sample products for
IFF, request to accelerate the preparation-Participated in the IFF (Displayed EHL products)-Attended the seminar “leather trend in Japan” and “businessmanner seminar”-Survey on quality standard of leathers-Organize a workshop to set the leather goods quality criteria
and accreditation and to discuss a plan of future activities andconfirmation-Support partner companies in technical improvement andbusiness deal
-Discuss how to set a system for brand management-Organize an interim wrap-up meeting for sharing the issues,
making an action plan for the extended period and agreeing on
the activities during the period.
-Develop new products for the IFF exhibition in Tokyo

Schedule
15 October –6 December,
2014

No.8

-Preparation for IFF exhibition-Support the production of exhibition samples-Conduct survey on Ethiopian readiness for brand management

20 March 10 April,2016

3rd Visit to
Japan-Participated in the IFF (Displayed EHL products)-Visited several places including Shikoku Towel Industrial
Association and its member companies, Japan Grove Industrial
Association and its member companies, and an inspection
company

19 – 30 April
2016

No.2

No.3

1st Visit to
Japan

No.4

2nd Visit to
Japan
No.5

No.6

No.7

7

7 - 22January,
2015

23 March –11 April,
2015

21 – 30 April
2015

7 -14 June,
2015

15 – 26 July
2015
13 - 27
September,2015
8 - 22
November ,2015
24 January21 February,
2016

No.9

No.10

4th Visit to
Japan

No.11

1.3.3

-Support partner companies in technical improvement andbusiness deals-Have meetings with relevant organizations for action plans-Conduct survey on LIDI capacity and other donors’ work in theleather sector-Support partner companies in technical improvement andbusiness deal
-Have meetings with relevant organization for action plans-Conduct survey on LIDI capacity and other donors’ work inleather sector-Conduct survey on the issues of quality hides in the upperstream of the value chain for Ethiopian leather production.
-Visited several places including Imabari city government, Ehime
Textile Technology center, Shikoku Towel Industrial Associationand its member companies, Tokyo Metropolitan Leather
Technology Centre and an inspection company.
-Held wrap-up meeting by main counterparts of EHL-Information collection survey for quality improvement of leather
materials in Ethiopia, especially on raw materials, tanneries, andleather products-Survey on LIDI’s capacity of testing and analysis including test
demonstration by LIDI’s staff-Report the results of CPA2 and discussion for the future of CPA

26 June 10 July,
2016

21 August 5 September,
2016

26 November– 3 December
201612 - 22
February
2017

Implementation structure
The activities in the CPA phase 2 study were inaugurated mainly by the Ethiopian

Investment Commission (EIC) in collaboration with the Implementation Committee of Champion
Product Approach (ICCPA) chaired by the EIC Director. The following figure shows the agreed
structure of the Study with ICCPA. The CPA Phase 2 was originally intended to select a target
product for finding market opportunity and to conduct focused promotional activities. As a resultof the survey on the potential of Ethiopian products and marketing research, Ethiopian leather
items and materials, particularly sheep leather, were selected as the target products. Leather
Industry Development Institute (LIDI, a governmental organization to support the leather sector),
Ethiopian Leather Industry Association (ELIA, an industry group), and private companies that
produce leather materials and leather products joined the ICCPA, and those organizations andenterprises serve as principle actors on the CPA project.

8

Figure 1-2 Implementation structure of these works
The ICCPA members and their roles are described in Table1-3.
Table 1-3 ICCPA membership
MemberRole

Ethiopian Investment
Commission

Process Owner /Approver

Ministry of Industry

Contributor

Give inputs based on the experience in the Phase 1
Assign governmental institute as a process owner for the target sector branding.

Ministry of Foreign Affairs

Contributor

Disseminate the CPA and the promotional film as a tool for business diplomats.
Support an Ethiopian Embassy’s official to support the CPA’s activity in JAPAN.

Ethiopian Chamber of Commerce
Contributor
and Sectoral Associations
Member for Sector branding

Role

Governmental Institution

ApproverSctoral Association

Contributor

Representative of Private
Companies

Contributor

Partner companies

Executer

Represent the ICCPA as the key decision maker

Give inputs based on the experience in the Phase 1.
Support to disseminate the CPA locally and internationally.

The decision maker of sector branding.
Give professional inputs and opinions.
Technical support
Give professional inputs and opinions to help making decisions.
Disseminate the brand and manage the brand in the target sector.
Give professional inputs and opinions to help making decisions.
Utilize the brand video and tool kit in actual operation.
Participate the promotional activities in Japan.
Utilize the brand video and tool kit in actual operation.
Participate the promotion activities in Japan.
Give feedback to the ICCPA.

9Chapter 2

Review of the CPA Phase 1

Review of the CPA Phase 1
2.1

Outline of the CPA Phase 1
CPA Phase 1 aimed to verify the effectiveness of CPA as an export promotion policy, byorganizing an institutional framework for CPA that would be applicable for other developing
countries as one of the export promotion measures. The activities in CPA Phase 1 are as below:
1.

Implement CPA on a trial basis

2.

Facilitate public-private partnership activities in Ethiopia

3.

Improve the image of Ethiopia by promoting champion product4.

Collaborate with Japanese companies

5.

Systematize the lessons and knowledge learnt from CPA

Figure 2-1 shows the stages of export promotion measures from upper to downstream.
CPA Phase 1 focused on identifying sales opportunities in which activities with extracted
components were implemented.

Figure 2-1 Activities in CPA Phase 1

13

2.2

Remaining issues for CPA Phase 2
The outcome of CPA Phase 1, collected by the questionnaire/hearing survey at theAfrican Fair and the test marketing, indicates that the Ethiopian products have enormous potential
to be accepted by customers in Japan. Also, the exhibitions in Ethiopia enhanced the Ethiopian
stakeholders’ initiatives toward the CPA. However, no business contract has been signed between
the partner companies and the Japanese dealers to import Ethiopian champion products during
CPA Phase 1.
At the end of CPA Phase 1, the following challenges (issues) were identified for thefacilitation of CPA 1 .
(1) The CPA and export promotion policy
Challenge 1: Defining the role of the CPA in Ethiopia’s export promotion policy.
CPA Phase 1 was positioned as a pre-project study by JICA. For further support in the
future, the position of CPA in the Ethiopia’s export promotion policies upon obtaining a politicalcommitment for CPA must be clarified.
(2) Sales opportunities
1) Organize an implementation body
Challenge 2: Building a cross-sectional implementation body for the CPA (decision making,implementation, consultation, etc.)
CPA Phase 1 proved the inadequate involvement of relevant Ethiopian ministries andagencies due to the lack of a bureau with dedicated staff for the CPA in Ethiopia. To continue the
CPA project, it is indispensable to set up a concrete organizational structure for the CPA in
Ethiopia.
2) Develop a champion product concept
Challenge 3: Defining the concept of champion products more clearly
Challenge 4: Defining the targeted market of champion products
The champion product’s concept was not shared as a common specific image among
relevant organizations and companies sufficiently. Taking “unique feature” for example, theconcept was interpreted differently among them. It is necessary to have a shared common
understanding about the concept by making sure of or improving the concept.
3) Develop a champion product brand
Challenge 5: Internalizing the brand and understanding its importance1

Policy Dialogue on Industrial Development in Ethiopia (Phase 2) Study on Implementation Support of Champion
Product Approach Final Report (March 2013)14

Challenge 6: Securing coherence between different brand levels
The brand value of champion products is not exclusively for marketing purposes. Theinternalization of the brand (i.e. a process of sharing the value within the company, nurturing thebrand, and gaining confidence) is of importance to enable the brand quality worthy. Furthermore,
for active CPA promotion, selection and concentration to prospective sector might be effective.
In that case, the selected/concentrated sector must ensure consistency with the industry brands
that will be created.
4) Select champion product candidates
Challenge 7: Clarifying selection criteria and procedure of champion products
Although selection criteria and method were given before selection, the criteria did nottarget a broad range of companies in CPA Phase 1, and the selection process was not always clear.
Ensuring transparency in criteria and selection process for choosing a champion product is theessential element to facilitate the CPA project even further.
5) Conduction promotion
Challenge 8: Selecting a promotion means, such as media and contents, to reach the targetedbuyers and consumers
The promotional activities in CPA Phase 1 indicate many points of note that can ensure
the project’s success, for example, identifying a target, appropriate selection of promotion place,and usage of appropriate promotional tools with necessary information.
(3) Issues in other categories
1) Improving enabling environment for export
Challenge 9: Establishing an export promotion organization, which removes disincentives, withcross-sectional export promotion policy
Challenge 10: Implementing export promotion policy through human resource development inexport business, financial support services, efficient customs clearance, market
information services, etc.
Ethiopian companies have a weak connection with peers in the same industrial sector.
CPA Phase 1 revealed the issues that individual companies cannot deal with (e.g. to improveexport mechanism, to develop human resource specialized in export management business, toconduct financial services and to improve customs procedures, to collect/distribute market
information) It is highly recommended that the government cope with those issues expeditiously.

152) Raising awareness and recognition
Challenge 11: Promoting the CPA to Ethiopian companies and gaining wide recognition of the CPA
The scope of criteria for the selection of champion product candidate companies was notextensive and the selection process was also opaque. There is growing importance to disseminate
information on the CPA project to a wider range of businesses and entrepreneurs and to gain
recognition of the CPA in pursuit of the purpose to find prospective candidate products. In fact,
the CPA project team received inquiries about how to join the project by some Ethiopian
companies attracted by a champion product displayed in the exhibition in Ethiopia. Increasingawareness and recognition of the CPA in the Ethiopian market would contribute to finding
potential champion products.
3) Company capacity building
Challenge 12: Strengthening information services on target markets, which will be useful for
product development, as well as technical support system for quality improvement
Challenge 13: Focusing on technical assistance which makes a “direct impact on sales,” such as
VM, and motivates companies to actively participate in the CPA
Challenge 14: Improving products to meet target markets’ needs and demand for quality basedon information collected in the process of expanding sales channels
Challenge 15: Nurturing potential CPA companies
For individual companies, there is a limitation to collect all necessary information about
the target market and to improve their product quality. Accordingly, a sectoral governmental
agency and a private intermediary organization are expected to provide such information andtechnical assistance to the individual companies.
4) Closing export deals
Challenge 16: Understanding business practice in target markets, including understanding ofdifferences in business culture, and concluding contracts
Challenge 17: Providing support to succeed in business negotiations, including understanding
business information, improving business manner, and preparing contract documents
In response to CPA Phase 1, many Ethiopian

companies requested for “market

information.” On the other hand, it seems that the Ethiopian companies’ participation inpromotional events does not exploit a valuable opportunity to get in touch with Japanese buyers.
The Ethiopian companies must collect the market information through buyers, and the companies
must understand the importance of differences in business customs.

165) Others
Challenge 18: Creatively utilizing human and organizational resources in Ethiopia
Having a business sense and expertise, the Ethiopian diaspora, whom the Japaneseexperts met during CPA Phase 1, gave inspiration to CPA stakeholders. It is also noticeable thatthe study spotlighted the networks including NGOs for educating and training of entrepreneurs
and associations of female entrepreneurs in the leather industry. It is expected to assist suchnetworks to promote the project.

2.3

Responses to the challenges in CPA Phase 2
Table 2-1 shows the summary of the responses to the 18 challenges taken over from CPA

Phase 1 and to what extent those issues have been solved (i.e. achievement levels) during CPA Phase
2. The in-depth report on the activities in CPA Phase 2 is described after Chapter 3.
CPA Phase 1 focused on support to open up a new market for any Ethiopian products.
Subsequently, CPA Phase 2 run a branding promotion after a target product was selected. With theactivities during CPA Phase 2, the project marked a significant progress in the leather sector in termsof the clarification of the CPA concept, shaping a shared understanding of the CPA among Ethiopian
stakeholders, as well as the awareness on the importance of branding promotion. On the other hand,
there is room for addressing the remaining issues related to product development, capacity in apromotion, and support service to individual companies by the government. The issues andrecommendations raised in CPA Phase 2 are shown in Chapter 7.
Table 2-1 Activities in CPA Phase 2 against the issues of CPA Phase 1
Issues pointed out in CPA Phase 1

Challenge 1: Defining the role of the CPA in
Ethiopia’s export promotion policy

Challenge 2: Building a cross-sectional
implementation body (decision making,implementation, consultation, etc.)

Activities in CPA Phase 2(Achievement levels are described by thefollowing symbols.)◎: Already achieved○: Likely be achieved△: Partly achieved
×: Not achieved
・Involvement of relevant organization to theactivities(○) The utility of the CPA is gradually being
recognized within the Ethiopian government.
Also, the understanding on importance ofbranding for industrial development andexport promotion is moving toward deeper.
・Establishment of ICCPA structure(△) As a promotional body of the project,
ICCPA was organized by both governmental
and private stakeholders, while its function isstill narrow and independent-minded
activities are not carried out yet.

17

Challenge3: Defining the concept of champion
products more clearly

Challenge 4: Defining the targeted market ofchampion products

・Taking place a brand workshop(◎) A brand workshop was held for ICCPA
and, participants obtained a clear
understanding of the CP concept.
・Conducting a market research in Japan・Conducting a survey on potential of
Ethiopian products(◎) The Japanese experts decided to selectthe Japanese market as a target. As a resultof the above-mentioned research and survey,
the leather industry was selected as atargeted sector, and sheep leather waschosen as a targeted product.

Challenge 5: Internalizing the brand andunderstanding its importance
Challenge 6: Securing coherence between
different brand levels

Challenge 7: Clarifying selection criteria andprocedure of champion products

Challenge 8: Selecting a promotion means,such as media and contents, to reach thetargeted buyers and consumers

Challenge 9: Establishing an export promotion
organization, which removes disincentives, withcross-sectional export promotion policy
Challenge 10: Implementing export promotion
policy through human resource development inexport business, financial support services,
efficient customs clearance, market information
services, etc.
Challenge 11: Promoting the CPA to Ethiopian
companies and gaining wide recognition of the
CPA・Brand Development of Ethiopian Highland
Leather
・Brand Development through “Creativity in
Motion”(○) Our brand “Ethiopian Highland Leather”
was created with taking advantages of thematerial’s features. In addition, a crosssectional brand “Creativity in Motion” wasbuilt.
・Selection of partner companies(○) Partner companies in the leather
industry were selected based on criteria.
・Creation of promotional tools
・Conducting a promotion on sheep leather
in Japan(○) Promotional tools such as booklets andposters were created to embody the brandconcept.
No specific activities are provided(×) According to the hearings fromgovernmental organizations and privatecompanies, it seems the expected results
have not been produced, while they are
addressing the issues.

・Organizing a brand workshop
・Providing technical assistance for partnercompanies in the leather industry(○) The Japanese experts raised awarenesson the CPA for ICCPA members. In the wakeof our continuous efforts, it can be said thatthe awareness about the project isincreasing in Ethiopia.

18Challenge 12: Strengthening information
services on target markets, which will be usefulfor product development, as well as technicalsupport system for quality improvement

Challenge 13: Strengthening information
services on target markets, which will be usefulfor product development, as well as technicalsupport system for quality improvement
Challenge 14: Improving products to meet target
markets’ needs and demand for quality basedon information collected in the process of
expanding sales channels
Challenge 15: Nurturing potential CPA
companies

Challenge 16: Understanding business practicein target markets, including understanding ofdifferences in business culture, and concluding
contracts
Challenge 17: Providing support to succeed inbusiness negotiations, including understanding
business information, improving businessmanner, and preparing contract documents
Challenge 18: Creatively utilizing human andorganizational resources in Ethiopia

・Investigating capacities of LIDI
・Capacity building through visits to Japan(△) As a result of the investigation of LIDI, it
became clear that the governmentalorganization provide merely “elementary”
technical assistance and “basic” information
to companies, which is inadequate to enter
the “mature” markets in developed states.
・Technical support to partner companies
such as VM, product development andbusiness manner seminar
・Capacity building through visits to Japan(△) Partner companies are becoming highly
motivated for technology acquisition
especially after the exhibition in Japan, but
the technology has not been utilized enoughso far. There is a remaining problem that
only a few products meet the quality
requirements in the “mature” markets
regardless of our technical assistance for
product development.
・Capacity building through visits to Japan・Support for dealing with buyers(△) Several Ethiopian corporations among
partner companies started to deal withJapanese companies or under businessnegotiation. Note, however, that someJapanese companies are not fully satisfied
with Ethiopian company’s response.
・Use of local human resources
・Consideration about collaboration withother donors(○) In CPA Phase 2, human resources in
Ethiopia are actively used. Coordination andcooperation in assistance to the leather
industry are also discussed.

19Chapter 3

Trial of Measures for Candidate

Champion Products

Trial of Measures for Candidate Champion Products
3.1

Branding in CPA Phase 1
This chapter commences with a review of the branding activities in CPA Phase 1, which

are the basis for CPA Phase 2. During the field survey in CPA Phase 1, Japanese expert groups
conducted market research to look into Ethiopia’s historical and modern-day assets in three
representative regions below:-The North (Aksum and Lalibera for historical and geographical landscape),-The South (Yirgachefe and Chencha for coffee, textiles, and traditional produce likeginger), and -Addis Ababa and its suburbs (urban landscape and industry development, Ambo forrose farms).
As a result, the experts identified Ethiopia’s inherent brand assets as follows:
Table 3-1 Ethiopia’s unique brand assets
Historical Brand Assets
History／Origin

Tradition／
Culture・Ethiopia’s incomparable geographical features
・Place where human beings originated・Unique history and culture compared to other African countries
・Stock seeds/origins of various agricultural products (coffee, honey,
ginger, etc.)
・Traditional wisdom and technique
Today’s Brand Assets

People／Human
resource
Vision・Enthusiasm and honesty
・Craftsmanship（proficient skill）
・A strong vision to underpin the growth of the country
・Leadership among African countries

Light
manufacturingindustry showing
a remarkable
growth・Textile industry
・Leather industry
・Jewelry goods
・Agricultural and processed food products, etc.

With a clear picture of the historical and today’s assets in mind, a brand concept “Prideof Creation” was proposed, and both the Ethiopian and Japanese sides formed a consensus on theconcept in CPA Phase 1.

23

THE PRIDE OF CREATION.
The Cradle of Mankind. Ethiopia.
The land where mankind first started creation.
The delicate hands that were gifted only to humans.
This precious gift has been used to create things that had never existed.
And even now, the land brims with the passion to create something new,with the pride that we have seen the very beginning.
A new challenge of Africa’s largest growing nation begins.
The Pride of Creation.
ETHIOPIA

Figure 3-1 Draft brand concept agreed in CPA Phase 1
In CPA Phase 2, the Ethiopian stakeholders and Japanese experts shaped the brand concept“Pride of Creation” into a brand video and website for promotional activities through branding.
For the embodiment of the brand concept “Pride of Creation” and promotion of thebranding activities, the concept was elaborated with a creation of a promotional video and website.

3.2

Branding workshop

3.2.1

Identification of Ethiopia’s unique assets
In January 2015, a brand workshop as an activity of CPA Phase 2 was held for ICCPA in

Addis Ababa. At the start of the workshop, the importance of branding was reviewed. The experts
introduced branding practices in Sweden, Spain, and New Zealand as successful cases (bestpractices) with an explanation about effects of branding (see Figure 3-2).

24

Figure 3-2 Identified brand structure (extracted from the workshop material)<What is a brand? Primary explanation related to brands>
A brand is not simply a logo or label design; it is an intangible asset – the “inherent value”
of a product, service, or company. The approach to branding is utilized not only as ordinary
corporate marketing materials but also for improvement in corporate value, even for revitalizationof local communities in a countryside in recent years.
For regional brand development, first of all, it is essential to extract any types of elements,
including a production system, a distribution mechanism, cultural backgrounds, a passion of
producers, and an approach to manufacturing, which may become sources for the “inherent value.”
Second, “brand promise,” which pledges the various identified elements (“inherent
values”) to the consumers, is described. The brand promise defines the value that the brandprovides, and it serves as an understanding and guarantee of quality for the consumers. For the
producers, it also contributes to the decision-making process and motivation for studying andcreating a consistent brand vision (i.e. what kind of people does create the brand? Based on whatkind of image?) and brand system (what are the quality control and operating standards necessary
to fulfil the promise?).
<Explanation of terms used in the figure>•

Brand Promise:“Brand promise” is a concept that provides a source of entertainment to the consumers

by transforming the facts of a particular product or service into an attractive and consistent “value”
for a target market. When the inherent value penetrates deeper into both the brand producers(inner) and to the consumers (the brand recipients), the value functions as the driving force thatcreates unique attraction and consistent expectations for the product or service. For the realization25

of the brand promise, it is necessary to share a “brand vision” for all of the stakeholders, including
the product or service provider side (producers, sellers, employees, etc.). The “brand promise”
must be operated under a consistent “brand system” from product/service development to
distribution.
•

Brand Vision:
Brand vision is a brand that will shared by the producer side. It comprises the basis of

the brand promise, and it encourages the producers to create a common will with their prides andmotivations after the brand promise is prescribed. The brand vision serves as a locomotive torealize the brand promise with various elements, including cultural background, craftsmanship,and dedication of the persons involved with the brand.
•

Brand system:“Brand system” comprises the basis of the brand promise along with brand vision, and it

serves as a mechanism of the value chain, which is constructed and improved after the brandpromise is specified. The system can be comprised of broad elements such as the product itself,
package, quality control methods, and product distribution system.
<Brand example>
In the workshop, the experts explained about the internationally renowned textile brand“Harris Tweed” as an example of the brand structure and concept. Harris Tweed produces handweaving textiles made by the island residents from virgin wool shorn in the Outer Hebrides islandsof Scotland, which is a well-known brand derived from local historical industry in the region.

Figure 3-3 Brand structure of Harris Tweed

26

•

Brand Promise of Harris Tweed:
Harris Tweed views the inherited unique techniques and production since ancient times

as value, and it provides brand promises: “local (limited) production” and “hand-weaving byartisan techniques.” With these concepts, Harris Tweed formed a brand system for sharing thevision and techniques throughout the community, such as strict quality control standards and an
operating organization. “In the present day, where mass production in large-scale factories has
become mainstream, the inherited “localism” and “artisan techniques” gained broad acceptanceas an appealing brand promise by the customers as well as people involved in the fashion industry
around the world.
•

Brand vision of Harris Tweed:
The authentic techniques and craftsmanship, handed down from people to people overthe centuries, are shared by all stakeholders as a “will” and “pride” of everyone who work for thebrand. Also, the history and brand story constitute appealing parts of the brand.
•

Brand system of Harris Tweed:
The Harris Tweed’s traditional manufacturing methods and techniques are protected bylaws legislated by the British government. Only products that passed strict quality control
standards are given an official label (the license of the British Royal Family) by the Harris Tweed
Authority, the brand management organization.
As the example of Harris Tweed shows, strong brand shares the vision among everyone
involved with the brand to fulfil the promise based on a clear and appealing brand promise, andit also possesses quality control standards and a management organization. In other words, astrong brand has such functioning structure that all of the facts, including a brand and service
itself, the brand producers, components and elements, are organically combined to realize a single
brand promise.

3.2.2

Set a production policy for brand video
As for a brand video production policy, the following three draft policies were suggested

in the brand workshop to express the brand concept “Pride of Creation” proposed in CPA Phase 1.
Policy A: Lively Ethiopia
Vividly portray people devoting themselves to produce goods and their enthusiasm for
manufacturing. The present challenge for people to create new products and various high-quality
products shines a spotlight on the quality.

27

Policy B: Moving Forward
Evoke the image of Ethiopia moving forward with a sense of pride in its achievements
in manufacturing. The video shows young people, children, seniors, farmers, and artisans among
others. They talk to the camera in turn – sometimes walking and sometimes running – describing
the history of Ethiopia and expressing their aspiration for the future. Through these people’s
depictions, the video sends a strong message from the country trying to move forward in unity.
Policy C: Sound of Creation
Write lyrics that convey the message of “Pride of Creation” and put them to a piece ofmusic well known among the Ethiopians. Ethiopian people sing this song in turn in various places.
The song not only physiologically conveys a positive image of the country: by creating the songwith people in Ethiopia to generate a spectacular movement involving the country as a whole.
ICCPA members commented, saying: “Policy A is very attractive in appealing theuniqueness of Ethiopia including its scenery to the world,” “Policy B is effective in promoting
the modern image of Ethiopia,” and “Policy C is also fascinating but dance and songs seem to bedifficult to express for the Ethiopian because of their calm characteristics.” It was agreed thatthese policies would be discussed among the ICCPA members after the workshop to make a final
decision. As a result of the discussion, Policy A “Lively Ethiopia” was determined, and then theJapanese experts began work on a brand video.
In the second part of the workshop, participants conducted a brainstorming session
according to the discussion points. The participants were invited to come up with their ideas as
to what promotional activities might be effective in Ethiopia for internal branding and toencourage active involvement of stakeholders on the Ethiopian side and to do presentations. Somepromotional activities, such as showing the video on flights operated by Ethiopian Airlines,
selling products at duty-free shops at the airport, encouraging the overseas Ethiopian embassies
to get involved, holding a champion product contest, were suggested as activities that theEthiopian side can organize on its own.
At the conclusion of the workshop, both sides agreed that the objective of this branding
exercise was not a “country branding” as part of the strategy to build the country image but a“manufacturing branding” that underpins Ethiopian industries. The Ethiopian side indicated thenecessity to involve the relevant ministries in the CPA project.

28

Idea Brainstorming SheetCountry Branding - How could we drive Participation?
1. WHO do we want to involve?

2. WHAT could we do to motivate people, and participate takeaction to live up to the brand?

3. WHERE and HOW could we promote our brand towards global

consumers?

Figure 3-4 Presentment at brainstorming session (handout worksheets)

How do we want to
involve ？

How could we motivate
people ?

Where and How
could we promote ？

Brand Ambassadors

Create a contest

Special events

Ethiopia Airlines

Award people(prodedure, design)

Show videos in
Ethiopia Airlines

Sectoral Associations

Brand Guideline
BookletSell products in duty
free shop

NGOs & Active
Organizations

Screen around city

Print Media

Ethiopian Embassies
AbroadTV CM/Print Media

Give away to foregn
peopleLocal Media

Trade fair/conference

Figure 3-5 Activities suggested by workshop participants for promotion

3.2.3

Identifying a brand concept
Several TV conferences were organized between Addis Ababa and Tokyo to discuss thebrand concept “Pride of Creation.” Given that “Land of Creation,” the new Israeli tourism
marketing campaign, was launched in that year, it was agreed to find another way to express the“Pride of Creation” while also preserving Ethiopia’s energy, texture, and soul as well as the idea
behind the concept intact.
The following three new directions were suggested to ever more emphasize thoseelements considered to be Ethiopia’s historical assets (i.e. “the place where human beings

29

originated and where manufacturing originated” as well as the one considered to be its current
asset, i.e., “highest economic growth rates in Africa”).
Direction A: Power of Creation
Express the engine for Ethiopia’s rapid economic growth precisely because of its historicaladvantage as a “starting point of manufacturing” with the perspective that Ethiopia is “the place where
human beings originated and where manufacturing originated.”
Direction B: Creativity in Motion
Portray Ethiopia’s dynamism and great creativity as a country that continues to generatesomething new since the dawn of time and to bring surprises and impressions to the world.
Direction C: Born to Create
Express the power of creativity in Ethiopia, where human beings have been creating
something new since the dawn of humanity.
In consequence of a series of discussions held with the Ethiopian stakeholders,“Creativity in Motion” was chosen as the final brand concept, which embodies Ethiopia’s
increasing enthusiasm. The concept expresses the brand promise that aims to generate new value
with pride in the place where human beings and manufacturing originated (Figure 3-7).

ＣＲＥＡＴＩＶＩＴＹ ＩＮ ＭＯＴＩＯＮThe Cradle of Mankind. Ethiopia.
The land where mankind first started creation.
The delicate hands that were gifted only to humans.
This precious gift has been used to create things that had never existed.
And even now, the land brims with the passion to create something new,with the pride that we have seen the very beginning.
A new challenge of Africa’s largest growing nation begins.
The Pride of Creation.
ETHIOPIA

Figure 3-6 Draft concept which was ultimately agreed

30

3.3

Brand video

3.3.1

TV conference for brand video
The Japanese experts organized TV conferences between Addis Ababa and Tokyo to

discuss the structure and a scenario of the promotional video in detail. A draft scenario of thepromotional video was presented, and discussions were held with the ICCPA members.
Locations for video shooting and the cast members were selected with the local video
crews and finalized in consultation with the ICCPA members. Locations for the video were to beplaces involving individual champion product sectors (i.e., leather, textile, coffee, honey, opal,
and rose) as well as the products of these sectors, so that the Ethiopian could exemplify Ethiopia’senergy, texture, and soul. Ethiopia’s scenery and its modern face (e.g., office buildings, arts,
scenes from a marathon) were also to be filmed so that the country brand image of Ethiopia would
be depicted throughout the video. As a result of discussions with local film crews and the ICCPA
members about the cast members to be featured in the promotional video, Mr. Gash Aberra Molla,
a cultural celebrity in Ethiopia; Ms. Hawi Negese, a model; and Mr. Abayneh Ayele, a marathon
runner, were recruited.

Gash Aberra Molla (Seleshi Demissie)

A musician and an environmental activist. His music is used in this brand video. He played a leading role in
the Gash Abera Molla Environment & Development Association, a project launched to renew the image ofthe capital, Addis Ababa. He actively participates in volunteer work and has received some international
awards.

Hawi Negese

Abayneh Ayele

A model from Addis Ababa. She loves fashion anddesign and is an opinion leader among young
people.

A young Ethiopian marathon runner (age 27). He isa member of the Ethiopian national team and has
been a familiar face at many international
competitions since 2010. He is a young athlete whocurrently enjoys attention from other runners, fans,
and the sporting press in Ethiopia.

Figure 3-7 Cast members featured in the brand video

31

The delegation (March 23, 2015–April 11, 2015) was dispatched to produce the brandvideo along the agreement above. The shooting members included Japanese experts (art director,etc.), an Ethiopian director, and shooting staff, including a photographer.

3.3.2

Local video shooting
For the promotional video, in order to ensure that technical assistance was provided toEthiopian stakeholders and that Ethiopia’s energy, texture, and soul were embodied, the Japaneseexperts requested cooperation from the Ethiopian film crews, e.g., the producer, assistant director,
and cameraman, and shot in collaboration with them. In the selection process of Ethiopian
collaborators, three groups of directors and camera operators were interviewed to determine thequality of their previous works and to evaluate their enthusiasm for this project, before the final
selection (See Tables 3-2, 3-3).
Table 3-2 Division of roles between the Japanese and local crews
Roles forVideo
Production-

Japanese crews
Overall supervision
Consider and decide on thevideo scenario
Review the video shooting
principles and methods
Consider and create ashooting schedule
Consider and identify shooting
locations and cast members
Consider video shooting
equipment-

Ethiopian crews
Support preparation for shooting
as well as actual shooting
Select possible shooting
locations and candidates forcast members
Go location hunting for the video
Negotiate with cast members
Negotiate with relevant
authorities to get permission toshoot a video

Table 3-3 Main shooting locations
Shooting category
Featuring champion
products

Natural and modern
scenery in Ethiopia

LocationsAster Bunna Coffee (Addis Ababa): coffee and people roasting
coffee beans
ELICO (Addis Ababa): leather, craftsmen
LIDI (Addis Ababa): leather, craftsmen
Sabaharr: textile and craftsmen
Beza Mar (Butajira): honey factory, factory workers
Orbit (Addis Ababa): opal, genuine stone, jewelry workers
Mentaye Flowers (Debre Zeit): roses, plant growers
Sululta: natural landscape in Ethiopia
Ethiopian Airlines (Addis Ababa): airplane, cabin crew
Capital Hotel (Addis Ababa): modern buildings, shooting of amodel（Hawi Negese）
Yod Abyssinia (Addis Ababa): Ethiopian dance
Meskel Square (Addis Ababa): marathon runner, children
C62 media (Addis Ababa): modern office
Bole area (Addis Ababa): modern townscape
Fekadu's Art Gallery (Addis Ababa): artist
Megabiskate (Addis Ababa): skateboarder32

3.3.3

Discussion on editing policy and agreed points
After the shooting in Ethiopia, the Japanese experts edited the footage in Japan andfinalized a promotional video after discussions with the local ICCPA members. First, the Japaneseexperts received comments on the provisional edition from the ICCPA members. The comments
included: “it shows a positive image of Ethiopia,” “the champion products are attractively
introduced in the modern image of Ethiopia,” and “the film includes tourism resources like naturein Ethiopia, and features what we think our country looks like.” Second, we discussed the scenario,
structure, and length of the video and agreed with them. With regard to the animated version
featuring traditional Ethiopian portraits, the ICCPA members requested that the scenario be
modified to make these portraits look more like traditional Ethiopian works. Then, the portraits
was agreed. Finally, the Japanese experts adjusted the color, sound, and music of the footage, andthe final edition was once again approved by the ICCPA members.

3.3.4

Completion of the brand video
The completed promotional video not only introduces products of Ethiopia but also features

various aspects of Ethiopia, including people involved in the production of goods as well as Ethiopian
culture and nature, as shown in Figure 3-8.

33

Figure 3-8 Some shots featured in the brand video
The Japanese experts uploaded the video on the websites of JICA and the home page of“Creative in Motion” (see Paragraph 3.4). The “Creativity in Motion” video was shown on
Ethiopian Airlines flights and at a seminar co-hosted by JETRO and the Embassy of Ethiopia inJapan on 23 rd April 2015 at the JETRO head office to promote investment in and trade with
Ethiopia. The video received acclaim.
However, any effective routes has not been found for disseminating the video yet. Even in
Ethiopia, the recognition of the video has been limited to people in the young generation who use
video sites such as YouTube. The ICCPA members proposed using the video for a public screen in
Addis Ababa, but no concrete actions have been taken. Even though JICA signed a MOU with
Ethiopian Airlines to run the brand video on the airplane, the video has seldom been used.

34

In parallel with “Creativity in Motion,” the MOCT and other ministries have started todevelop original Ethiopian brands. It is important to continuously discuss how they can share the brandconcept.

3.4

Creation of a website

3.4.1

Web contents
Given that the website will be maintained in Ethiopia, Tumblr – a free blogging platform– was chosen as its main platform. (Tumblr has become popular across the world since 2007 forits low cost and ease of use.) Furthermore, based on the assumption that the range of candidate
champion products will expand in the future, Instagram – a free photo-sharing social network
application – was downloaded, and an account was created to set up the content in a way that willencourage the participation of various sectors. Many companies and organizations are now able
to upload and share photos related to CPA themes.
The website’s content was settled upon through discussions with the Ethiopian side andbased on the feedback received from Ethiopia (See Figure 3-9). The website consists of four parts:(1) a promotional video featuring the championship product approach; (2) photos showing how
wonderful Ethiopia is; (3) a feature on highland leather as a selected sector (Introduction of thebrochure); and (4) what the champion product approach is.
The website was produced with the following points:
A horizontally scrollable design to be visually “fashionable”;
Facebook page buttons and Twitter page buttons at the bottom of every page toensure an easy jump to these outside pages;
An inquiry button at the bottom of the page to make inquiries on any page.

35

Figure 3-9 Site map for the website “Creativity in Motion”
Table 3-4 Information on the website

3.4.2

Domain namewww.ethiopiancreation.com

Period of registration for the domain name

10 years

Domain name holder

Ethiopian Investment Commission

Web content management system
The content of this website is more or less divided into two sections: the CPA andhighland leather. The EIC (Ethiopian Investment Commission) was appointed as the “webmaster”
to control all of the champion products, to pave the way for adding other sectors in the future.
The role of a webmaster is to:・Manage and host the website properly to prevent hacking/defacement or authorize
access;・Keep the website content updated to maintain the same flair and tone throughout; and36

・Select and upload appropriate photos for the website from the photos uploaded on
Instagram by participating companies in every sector.
On this website, the Instagram platform is used for “Ethiopia Today,” a page contributed
tomainlyby

CPA

partnercompanies

forproviding

up-to-date

information.

The

companies/organizations, which take part in the CPA and which were granted the right to upload
photos and articles on the official Instagram page under agreement with the EIC, can also post
photos and articles related to individual sectors. Such companies/organizations are referred to as“Instagrammers.”
Instagrammers have the following tasks:
・To liaise with participating companies/organizations in the sector and to gather (andinspect, if necessary) materials for photoshoot backgrounds;

・

To upload photos and articles into Instagram that contribute to upholding andpromoting the brand identity of each sector; and・To add an appropriate hashtag (#) to each photo, so as to make the site more userfriendly.
With a view to maintaining the website in Ethiopia, the Japanese experts prepared updating

manuals for the web operation, set an adequate period for testing, and shared uploading guidelines
with the Ethiopian side through Skype meetings. As of February 2017, the website is not often
uploaded in Ethiopian side. More frequent uploading and information transmission by the Ethiopian
stakeholders, including the EIC, are expected to share cross-sectoral knowledge of the brand.

3.5

Verifying the effects of measures for all champion product candidates
In CPA Phase 2, the Japanese experts conducted test marketing of Ethiopian products

through branding activities. As a model case, they verified the effects of “Creativity in Motion”
on the market’s receptivity and the potential for changing attitudes in the Japanese market. The
effects on market receptivity were verified by comparison of the changes in consumers’ attitudes
before and after watching the video and website. (For the survey design, see Figure 3-10.)37

image currently held

Exposure through various measuresEx）Ethiopia＝Famine, desert, I hold noparticular image …

Promotion video

Any changes seen in images of, and attitudes
towards, Ethiopia?

highland leather outline（poster, leaflet, product images・・）

Any changes seen in images of, and attitudes
towards, Ethiopian products?
How about images of highland leather – is it
considered attractive?

Ex）Ethiopian products,
highland leather＝ low
quality, I do not fancy it…

Survey method

Targetrespondents

Sample number

Online questionnaire survey
Individual male and female respondents
between the ages of 18 and 59

Changes post exposure

Survey area

Across Japan (47 prefectures)Time period fortallying the resultsof this survey

15th (Thu) through 16th (Fri)
September 2016

Target respondents are: normal dwellers; and a group of fashion-conscious people from the perspective ofreceptivity of leather goods
300ss （normal group 240 sample size + fashion-conscious group 60 sample size ）20’s
25Female 25
50
Total

Male

30’s
34
33
67

40’s
31
31
62

50’s
30
31
61

Total
120
120
240

+

Male
FemaleTotal

Fashion-Conscious
30
30
60

※normal dwellers are allocated pro rata to the
population makeup

Figure 3-10 Survey design for effects verification(1) Change in attitudes toward Ethiopia resulting from contact with “Creativity in
Motion” (Change in the Ethiopia’s country image following contact with the brand)
The overwhelmingly highest score for the country image among ordinary consumers
before the presentation of the video was “A country in Africa (49.6%).” The second-/third-highest
items included “Many highly athletic persons (30.0%),” “Impoverished country (21.3%),” and“Poor public security (19.6).” More than 20% responded with “No particular impression or image(20.4%).” The results showed that superficially, many persons had a negative image of the country.
After contact with the brand concept video and website, there was an increase in positive
image items and a decrease in negative image items. In particular, items related to manufacturing
such as “Many persons who are skilled with their hands (38.8%),” “Can feel the spirit ofmanufacturing (35.4%),” “Technically skilled (27.1%),” and “Have artisan spirit (27.1%)” showedlarge increases of 20–30 points. The potential for improving the country’s image could be confirmed
through broader recognition of “Creativity in Motion” promotion (for details, see Figure 3-11).
(2) Change in attitude toward Ethiopian products (Made in Ethiopia) resulting fromcontact with “Creativity in Motion”
Regarding products made in Ethiopia, the item “No particular impression or image” also
dropped considerably (from 67.5% to 28.8% among ordinary consumers), and there was an38

increase in scores for most items. Items related to the level of quality, such as “High quality”(from 2.1 % to 39.6 %) and “Image of being carefully produced” (from 2.5% to 31.7%), showed
particularly large increases of 30–40 points among ordinary consumers. There was also a large
increase in receptivity toward Ethiopian products; in particular, there was a large improvement inpositive image (for details, see Figure 3-12).
(3) Favorable impression of the produced materials (brand video, website)
For both the video and website, high proportions of the responses from the consumers
were “Made a strong impression” and “Good sense,” and the produced materials were highly
evaluated. In particular, the impact of the brand video was highly valued (for details, see Figures
3-13 and 3-14).
There were several comments in the open comment space as well, including the following
examples.
-"I did not know before that the country produced not just coffee but a wide range of
products. I would like to see a variety of Ethiopian products" (a woman in her 30s).
-"I remembered the term 'Ethiopian refugees,' and I thought the country was poor;
however, after seeing this video, I learned that there are many creative people, and my impression
completely changed" (a man in his 40s).
The Japanese experts confirmed the potential for contact with the brand helping to effecta large change in the attitudes toward Ethiopian products.
The fact that there was a definite change in attitudes toward Ethiopia and Ethiopian
products following contact with “Creativity in Motion” can be described as a significant resultthat indicates both the receptivity of the brand concept in the premium market and the potentialof the branding approach itself. The Japanese experts also confirmed that there is high potential
among consumers for the world view contained in the concept and the produced materials.
On the other hand, the key issues continue to be expanding brand recognition and ensuringexposure. Some other issues were also highlighted, including the absence of the brand manager
on the Ethiopia side during the project. In addition, independent brand operation on the Ethiopia
side was not achieved with regards to brand management and operation or with regards topromotion of the produced materials. The main reasons for these issues are attributed to thenational character and culture of the Ethiopian people as well as the level of development ofbusiness skills. In the future, what is most needed is a resourceful approach toward continual
brand maintenance and management, including training of personnel, gaining the involvement ofrelated parties, and system improvements.

39Q2: What kind of impression or image do you have of Ethiopia? *If you have no impression or image, select No. 31 "No particular impression or image".
Q13: What kind of impression or image do you have of Ethiopia after watching the video presentation?
Ordinary consumers before video
Consumers interested in fashion before video

70％

Ordinary consumers af ter video
Consumers interested in fashion after video

60％
50％
40％
30％
20％
10％

Many people who are skilledwith their hands

Can feel the spirit ofmanufacturing

Technically skilled

Have artisan spiritLong history

Ethiopian people are serious

Abundant nature

Have skills for export work

Sense of creativity

Rich culture

Has an attraction unlike
anywhere else

Many symbolic export
products

Many tourism resources

ModernUrban

Rapid economic growthTechnologically advanced

Low cost of living

A nation in Africa

Many highly athletic persons

Developing nation

Not serious

DesertPlace of famine

Lack of security: Water, foodpoisoning, disease

Inadequate infrastructure

Place of civil unrest

Poor public security

Impoverished country

Other

No particular impression
or image

I do not know what Ethiopia is0％

BeforeOrdinaryQ2
consumers before
video

(240)

2.9

1.7

0.8

1.7

8.8

2.9

19.2

1.7

0.4

5.8

4.6

4.6

3.3

0.0

0.4

3.3

0.4

8.3

49.6

30.0

9.6

1.7

9.2

7.9

10.8

11.3

10.4

19.6

21.3

5.0

20.4

2.9

OrdinaryQ13
consumers afterAfter
video

(240)

38.8

35.4

27.1

27.1

33.8

23.3

36.3

17.9

14.6

19.6

17.5

15.8

13.8

7.9

5.4

8.3

3.8

4.2

41.3

17.5

8.3

0.0

4.2

2.1

3.3

3.8

2.1

4.2

4.6

0.4

15.0 *

-

35.8

33.8

26.3

25.4

25.0

20.4

17.1

16.3

14.2

13.8

12.9

11.3

10.4

7.9

5.0

5.0

3.3

-4.2

-8.3 -12.5

-1.3

-1.7

-5.0

-5.8

-7.5

-7.5

-8.3 -15.4 -16.7-4.6-5.4 *(60) video
0.0
Q2 interested inBefore
Consumers
fashion before

3.3

1.7

0.0

20.0

3.3

26.7

1.7

3.3

8.3

6.7

1.7

5.0

0.0

0.0

10.0

0.0

13.3

65.0

35.0

15.0

3.3

23.3

21.7

28.3

20.0

20.0

35.0

36.7

5.0

8.3 *

3.3

48.3

5.0

3.3

11.7

1.7

3.3

5.0

Flat image + Positive image

Negative image

Consumers
interested in
fashionOrdinary
consumersn=Difference(60)
Q13 interested inAfter
Consumers
fashion aftervideo50.0 50.0 45.0 41.7 43.3 46.7 45.0 26.7 38.3 30.0 31.7 28.3 20.0 11.7
Difference

-

6.7

3.3

5.0

23.3

6.7

0.0

5.0

0.0

3.3 *

50.0

46.7

43.3

41.7

23.3

43.3

18.3

25.0

35.0

21.7

25.0

26.7

15.0

11.7

6.7

-6.7

5.0 -10.0 -16.7 -11.7-8.3-3.3 -18.3 -18.3 -16.7 -18.3 -16.7 -30.0 -31.7-5.0-5.0 *

3

15

17

13

4

12

6

9

14

7

20

8

5

18

19

11

16

29

28

30

31

10

1

2

23

22

24

25

26

27

21

32

*Sorted in descending image of score differences for "Flat image + Positive image" and "Negative image" *Items marked with " * " were not asked. *The difference is the score difference [After – Before] among ordinary consumers.

Figure 3-11 Changes in impression and image of Ethiopia40

Q3: What impression or image do you have of Ethiopian products (products with the "Made in Ethiopia" label)?
*If you have no impression or image, select No. 19 "No particular impression or image".
Q22: What impression or image do you have of Ethiopian products (products with the "Made in Ethiopia" label) after seeing the video, poster, and leaflets?
Ordinary consumers before video
Consumers interested in fashion before video

70％

Ordinary consumers after video
Consumers interested in fashion after video

60％
50％
40％
30％
20％

I do not know what
Ethiopia is

1.3

10.4

0.4

0.4

0.4

1.7

1.3

7.1

0.4

67.5

2.9

14.6

7.9

7.9

16.3

2.5

2.1

2.1

2.9

1.7

3.3

0.4

28.8 *

-

37.5

30.0

29.2

17.9

16.7

14.2

12.9

10.4

7.9

6.7

5.8

2.1

1.7

1.7

1.3

0.4

-3.8

0.0

-38.8 *

(60)video 3.3
Q3 interested in Before
Consumers
fashion before

0.0

6.7

1.7

6.7

3.3

16.7

13.3

0.0

1.7

16.7

0.0

1.7

0.0

1.7

0.0

11.7

1.7

51.7 *

Q22 interested in After
Consumers
fashion after(60)
video

55.0

40.0

43.3

36.7

13.3

23.3

33.3

40.0

11.7

5.0

36.7

1.7

3.3

1.7

0.0

0.0

5.0

0.0

13.3 *

51.7

40.0

36.7

35.0

6.7

20.0

16.7

26.7

11.7

3.3

20.0

1.7

1.7

1.7

-1.7

0.0

-6.7

-1.7

-38.3 *

1

11

12

10

13

14

16

7

8

15

5

6

3

9

2

4

17

18

19

Ordinary
consumers

Consumers
interested in
fashionDifference

Difference-

Feel familiar

PopularUnique characteristics

Dependable

Technically skilled

Other

0.0

22.1

Buying is a kind of volunteer
activity

4.2

16.7

Selling well

9.2

18.3

The products suit mytastes2.5

20.4

Frequently subject ofmedia or conversation

1.7

31.7

Cool

2.5

31.3

Make a strong
impression

2.5

39.6

Sense of tradition

1.3

(240)

Very fashionable

2.1

OrdinaryQ22
consumers afterAfter
video

n=

Good sense(240)

High level of dedication

BeforeOrdinaryQ3
consumers before
videoHigh quality

No particular
impression or image

0％

Image of being carefully
produced

10％20*Items marked with " * " were not asked. *The difference is the score difference [After – Before] among ordinary consumers.

Figure 3-12 Changes in impression and image of “Made in Ethiopia"
41

Q4: Please select the choice that is closest to your opinion concerning of Ethiopian products (products with the "Made in Ethiopia" label).
Q14: Please select the choice that is closest to your opinion concerning of Ethiopian products (products with the "Made in Ethiopia" label) after watching
the video.

Ordinary consumers

Consumers interested in fashion

17.5

32.5

44.6

7.9 6.7

40.8

55.4

19.2

11.3
2.9

11.3

46.7

12.1 9.2

32.1

Before

10.4
2.9

16.3

After

52.9

Before

52.9

26.7

6.3
4.6

36.3

After

42.5

(60)

(60)

Before

5.4

30.4

(60)

(60)

After

(240)

10.4
2.9

13.3

6.7

(60)

(60)

Before(240) 2.1 9.2

8.3

42.9

n=

⑥ I do not④ Mostly② Somewhat③ Neither⑤ Inaccurate① Accurateknow what
inaccurate
accurate
Ethiopia is ①+②

(60)

5.0

After

(240)

60.8

Favorable image(240) 2.5 15.0

10.4

4.6
3.3

31.3

Interested in

After

(240)

49.2

27.9

13.3

14.6

Want to use

Before(240) 2.5

60.8

8.3
2.9

(％)

Want to buy

Before
After

(240)

Before

11.7

(240)

After

0.8
12.5

Beforen=⑥ I do not② Somewhat④ Mostly① Accurate③ Neither⑤ Inaccurateknow what
accurate
inaccurate
Ethiopia is ①+②

After

Want to buy

Want to use

Interested in

Favorable image

(％)

(60)

11.7

21.7

13.3

31.7

28.3

40.0

23.3

5.0

13.3 5.0

45.0

41.7

31.7

16.7

43.3

23.3

35.0

66.7

11.7 6.7

53.3

75.0

13.3 8.3

36.7

5.0
1.7

63.3

8.3

28.3

6.7
1.7

46.7

20.0

45.0

3.3
1.7

30.0

46.7

35.0

1.7

20.0

51.7

Figure 3-13 Changes in scores for “Made in Ethiopia"

42

46.7

28.3

Figure 3-14 Impression and image of promotional tool43

Chapter 4

Activities in Leather Sector– Trial of Branding and Promotion(Oct 2014 – Jan 2016)

Activities in Leather Sector – Trial of Branding andPromotion (Oct 2014 – Jan 2016)
4.1

Identifying a target sector

4.1.1

Domestic market research
In the Japanese market research, the Japanese experts focused on the five sectors ofleather, textile, jewelry, agricultural processed products, and coffee beans. To complete anefficient study within a limited time frame, the Japanese experts divided the research into twophases: (1) a quick review and (2) a detailed survey.

Figure 4-1 Steps of the market research in Japan
In the quick review, the five target sectors were comparatively analyzed based on thethree criteria described below after the literature review (see Table 4-1).
Table 4-1 Selection criteria for the quick review

47

For the quick review on the competitive environment, the Japanese experts used the“Herfindahl-Hirschman Index,” also called “the Oligopoly Index,” which shows the degree of thecompetitive positions of companies in a certain sector of an industry. HHI 10,000 means “monopoly,”and “0” means “completely competitive competition.” The results of the quick review in the fivesectors are shown in Table 4-2.

48

Table 4-2 Results of the quick review
Two colored columns are the sectors selected for the In-depth Research.
Category
Criteria
Leather
TextileAgro-processing
Leather products/
Textile products/
Sesamematerials
materials
Uniqueness &○△△Originality-Tanned Ethiopian sheep Uniqueness cannot be
Uniqueness could not beskin is very smooth andfound with cotton and silk found in Ethiopian sesame
soft as compared as hair itself. However, there are as far as it is researchedsheep in other countries. some unique productsin the QR.
It is also durable evensuch as "Netela" which iswith the thinness from 0.4 a thin and soft cottonto 0.5mm. (Shimizu,
gauze with "Tilet", an
Ethiopian traditional motif.
2007)1-Ethiopian sheep leather is
extraordinary fine andsupple. It is highly valued
worldwide. (Productmanufacturer)

Fitness with
Branding
Approach

Competitive
Environment

○

○

×

There is a chance that
There is a chance that
There is a very limited
branding works forpossibility that branding
branding works forincreasing value andincreasing value andworks for increasing value
consequently improving
consequently improving
and consequently
country image, since there country image, since there improving country image,are successful examples of are successful examples of since most of the import
branding leather products branding leather products sesame are intermediate
for consumers and leather for consumers and leather goods used for processedmaterials.
materials.
food such as sesame oil.

○

△

○

CoffeeHoney

Bees wax

Ginger△△△Although there is auniqueness in taste withsome honeys made in a
traditional way, not somuch for normal honey forexport(Wholesaler)．

Uniqueness could not befound in Ethiopian bees
wax as far as it isresearched in the QR.

Uniqueness could not befound in Ethiopian ginger
as far as it is researchedin the QR.

Jewelries

Essential oil ofDamask Rose

Green beans△○

Uniqueness could not be
Ethiopian coffee has afound in Ethiopian damask distinctive uniqueness inrose as far as it istaste and it has
researched in the QR.
inimitability because thereason for its uniquenessis unknown(Wholesaler)．

Regular Coffee△
Ethiopian coffee has adistinctive uniqueness intaste, however, whether
roasted coffee keeps thisuniqueness is not clear as
far as it is researched in
the QR

Opal

Accessories○△

Ethiopian opal has a
There are some products
which uses Ethiopian motif
distinctive uniqueness incoloring (high play-ofsuch as coffee neckless.
color). Also crystal is large However, uniqueness(thick) and can bewhich is shared by many
processed into various
companies is limited.
forms (Wholesaler)．
* Though, Ethiopian opals
are easy to chip, and aging
is relatively strong.

○

×

×

There is a chance that
There is a very limited
There is a very limited
branding works forpossibility that branding
possibility that branding
increasing value andworks for increasing value works for increasing value
consequently improving
and consequently
and consequently
country image, since
improving country image, improving country image,major part of import honey since most of the importsince most of the import
are for consumer goods
bees wax are intermediate ginger are intermediate
where branding can have a goods used for processed goods used for processedstrong effects on
goods such as cosmetics food. Some import ginger
consumer's perception and or wax.
are used for consumer
behavior.
goods such as spice, but
its market would be
limited and impact of thebranding will be small.

×

○

×

○

×

×

There is a chance that
Ethiopian coffee already
There is a very limited
branding works for
has an established brand possibility that branding
increasing value andin Japanese coffee market, works for increasing value
consequently improving
and additional effect toand consequently
country image, sinceincreasing value andimproving country image,import essential oils are
improvement in country
since most of the importfor consumer goods where image by the CPA would
regular coffee (except for
those imported bybranding can have a
be limited.
strong effects on
franchised coffee shop
consumer's perception andchain) are intermediate
behavior.
goods used for processedfood such as canned
coffee.

×

○

○

○

○

There is a chance that
There is a chance thatbranding works forbranding works forincreasing value andincreasing value andconsequently improving
consequently improving
country image, sincecountry image, since
import opals are forimport opals are for
consumer goods where
consumer goods wherebranding can have abranding can have astrong effects onstrong effects on
consumer's perception and consumer's perception andbehavior.
behavior.

××

Import sheep leather
Import scarves market in Import sesame market in Import honey market in
Import bees wax market in Import ginger market in
Import essential oil market Import regular coffee
Import regular coffee
The market of import
There is a certain needs
market in Japan is low
Japan is high oligopolistic Japan is low oligopolistic Japan is high oligopolistic Japan is low
Japan is high oligopolistic in Japan is low
market in Japan is highmarket in Japan is highjewelries (excluding
and demand for ethicaloligopolistic market (its(its HHI is 3,393).
(its HHI is 1,361). The(its HHI is 3,713). In theoligopolistic(its HHI is(its HHI is 5,095). In theoligopolistic (its HHI isoligopolistic (its HHI isoligopolistic (its HHI isdiamond and pearl, but
products which have
HHI is 1,804). The market Although the degree ofmarket share of Ethiopia is past 3 years, there is no1,550). The market share past 3 years, there is no1,279). The market share 1,880). The market share 2,505). The market share including opal) in Japan is unique selling stories.
share of Ethiopia is 0.8%, oligopoly is relatively high, 3%, ranked at 7th. Since export from Ethiopia. Since of Ethiopia is 9%, ranked export from Ethiopia. Since of Ethiopia is 0.03%,
of Ethiopia is 5%, ranked of Ethiopia is 2%, ranked low oligopolistic (its HHI is On the other hand,ranked at 11th. Since the the potential exists
the degree of oligopoly is the degree of oligopoly is at 6th. Since the degree of the degree of oligopoly is ranked at 56th. Although at 6th. Although theat 8th. Although the
1,734). The market share Ethiopian products do notdegree of oligopoly isaccording to its good
relatively low, and Ethiopia relatively high, andoligopoly is relatively low, relatively high, andthe degree of oligopoly is degree of oligopoly isdegree of oligopoly isof Ethiopia is 0.18%,
have a distinctive
relatively low, and Ethiopia performance of Sabahar in has a certain share,
Ethiopia has no shareand Ethiopia has a certain Ethiopia has no sharerelatively low, therelatively high, competitive relatively high, competitive ranked at 19th. Although uniqueness, and thehas a certain share,
the test marketing incompetitive environment is currently, it would beshare, competitive
currently, it would be
potential of expanding
environment is favorable
environment is favorable
the degree of oligopoly is potential to enter thecompetitive environment is 2013.
favorable.
difficult to enter theenvironment is favorable. difficult to enter themarket share would besince Ethiopia has asince Ethiopia has arelatively low, themarket would be limited.
favorable.
market.
market.
limited because of thecertain share withcertain share in such an
potential of expanding
current marginalized
established reputation in oligopolistic market.
market share would beshare.
such an oligopolistic
limited because of themarket.
current marginalized
share.

* Brackets "()" shows citation or interviewee.

1. Shimizu, Masanori (2007) "About Sheep Leather", Hikaku Kagaku Vol.52, No.4. pp.153-157

49

Given the results of the quick review, the Japanese experts determined to survey two sectors –leather and textile – in detail. In the detailed survey, field research was conducted, including a literature
review and a hearing with experts, on the following three viewpoints and six items (see Table 4-3) so as toanalyse the applicability of these sectors as target sectors.
With respect to the market, the Japanese experts analyzed the distribution structure in the Japanesemarket (whether there are any obstructs in the value chain, and whether it is possible to define the target
group), the market size and future growth (especially after the entry to the target market), and customers’
needs/trends (ways and means of branding that are suitable to the target population). Concerning thecompetition, they analyzed the degree of competition and the possible strategy for entering the sector, as
well as barriers for foreign companies (the legal system and import/export regulations). Regarding theapplication of a product to the CPA, the Japanese experts decided to conduct a survey in Ethiopia tounderstand the uniqueness of an Ethiopian product. The survey included determining if a product meets thecurrent high-quality standards, and whether there is a demand in the Japanese market.
Table 4-3 Design of detailed survey
Viewpoint

Surveying matters

MarketDistribution
structure• Situation of value chains of suppliers, wholesalers, and retailers in the target sector• Clarification of direct target customers

Market size &growth• Quantitative estimation based on consumption, shipping, import, and other volumes• Qualitative evaluation if quantitative estimation is difficult

Costumercharacteristics,
trend in needs• Characteristics of end users, trend in needs, and characteristics of direct target customers(wholesalers, retailers) (such as QCD-related requirements)

Situation ofcompetition• Situation of competition based on the number of competitors and the state of shares• Possibility of creating a niche market by differentiation

Situation of entry
barriers• Existence/nonexistence and degree of entry barriers based on trade barrier (tariff/nontariff), legal regulations, exclusive distribution channels, the above-described situation ofcompetition, etc.

Uniqueness as
Ethiopianproduct• Whether is the product deep-rooted in the country’s culture and history?

Competition

Suitability
for CPA

Surveying contents

The results of the survey on the leather and textile sectors are shown below (see Tables 4-4 and
4-5). Each item in the table was rated separately, either at level A, B, or C. Those items whose conditions
are considered preferable are rated as level A. Level B items are those whose conditions should be qualified
and, to a certain extent, compared to level A items; their conditions are considered preferable or are
currently hardly considered preferable yet are believed to have improvement potential. Level C items arethose whose conditions are not considered preferable but are believed to have some improvement potential.

50

Leather sector
With regard to the leather sector, the Japanese experts conducted the survey mainly in Japan’s
leather goods market and raw material (sheep leather) market. The main survey items focused on leather
shoes in relation to the leather goods market and sheepskin in relation to the raw material market in theanalysis of the competitive environment. As Figure 4-5 shows, three out of six items (market size/ growthpotential, status of competition, and identity as a product from Ethiopia) were rated as level A, whereas one
item (market characteristics) was rated as level B, and the last one (entry barrier) was level C. In conclusion,
the comparative market share of imported goods is increasing, and there are concerns about the fact thatleather wholesalers tend to reduce their inventories. However, sheepskin can be differentiated via theinternationally recognized uniqueness of materials from Bangladesh and other competitors. It is therefore
expected that Ethiopian sheepskin with its appealing characteristics can be launched onto the market where
various needs exist.
Textile sector
With regard to the textile sector, the Japanese experts focused the survey on Japan’s textile productmarket and textile raw material market. Because the textile sector covers a wide range of business and labor
activities, the market for scarves2and the market for cotton fabrics were selected as the main survey items
in relation to the textile product market and the textile raw material market, respectively. As a result, no
item gained a level A rating, whereas three out of six items (market size/ growth potential, market
characteristics, and entry barrier) were rated as level B, and level C was given to two items (status ofcompetition and identity as a product from Ethiopia) (see Table 4-5).
In the situation where the market size remains unchanged or shrinks, and where imported goods
maintain a high level of the market share, a certain need for ethical products can be seen. However, giventhat very few businesses possess a high degree of monopoly power in Japan’s textile markets, Ethiopian
products are hardly competitive in terms of price, and opportunities for market entry are limited. Thus, it
can be concluded that the textile sector was not to serve as a target sector for this project.

2

In this case, scarves include: a shawl, head scarf, mantilla (to cover the shoulders and arms like a shawl), veil, and other similar
products.

51

Table 4-4 Summary of the detailed survey on leather industry

52

Table 4-5 Summary of the detailed survey on textile industry53

In view of the results of the surveys mentioned above, the leather sector is expected to haverelatively high market potential in Japan and thus be able to bring about the effects of the brand in acompetitive market environment for achieving differentiation. The Japanese experts therefore decided thatthe leather sector – “sheepskin” in particular, as it would be easier to highlight the characteristics of thisraw material – should be the focus of a field study.

4.1.2

Selection of partner companies
As a result of the Japanese market study, the Japanese experts concluded that the leather sector

should be the focus of the survey on implementation assistance. To determine whether or not there would
be companies capable of exporting goods to the Japanese market, a field study was conducted in November
2014 in Ethiopia. In this study, they selected companies for the implementation of the CPA (referred to as“partner companies”). Accordingly, the Japanese experts visited 31 leather and leather goods companies,
many of those being based in Addis Ababa, and interviewed them. These companies were selected fromamong the following “candidate” companies.
(1) Companies selected by the Ethiopian Leather Industries Association (ELIA), an associationof leather goods manufacturers, from among those companies registered with the Ethiopian
Leather Industries Development Institute (LIDI), an agency affiliated with the Ethiopia
Ministry of Industry;(2) Companies involved in the project supporting women entrepreneurs in the leather sector,
an initiative of the United Nation Industry Development Organization (UNIDO). UNIDO
has provided assistance to the leather sector in Ethiopia for more than 20 years;(3) Peers recommended by the companies the Japanese experts visited;(4) Companies recommended by the advertising agency that published the Ethiopian Airlines
in-flight magazines as well as English magazines for the wealthy, and that had previously
featured leather goods.
The companies selected as the candidates were screened in the areas of market competitiveness,
corporate vision and feasibility (see Table 4-6). Regarding the election, the following points wereconsidered:
1. Market competitiveness (whether a company makes unique and high-quality products to enter
the overseas market, or whether it has the potential to make such products),
2. Corporate vision (whether a company agrees with the intent of the CPA, joins the project andis willing to develop the company), and3. Feasibility (whether a company has export experience and production capacity).

54

Table 4-6 Survey items of the field survey
Viewpoint

Surveying matters

Surveying contents (classification of partner companies that are subject to the survey)

MarketCompetitiveness

Originality
Uniqueness• Existence/nonexistence of products using sheep leather materials or sheep leather (tanners, makers)• Existence/nonexistence of the style of Ethiopia in the design (makers)• Adoptive power to product development delivering the brand value (tanners, makers)

Quality• Quality of products (existence/nonexistence of potential possible to improve through technologicalguidance by experts in anticipating the advancement into the Japanese market) (tanners, makers)• Response to chemical regulations in the European market (tanners)

Company
visionCompany vision
Approval to CPA
concept• Company philosophy, environmental consideration (tanners, makers)• The sense of resonance toward CPA concept, willing to change the image of Ethiopia, by companies
and company managers (tanners, makers)

Feasibility

Production
capability• Company-scale, the degree of adequacy of facilities and output, etc. (tanners, makers)

Export experience• Existence/nonexistence of overseas export experience, especially to markets of advanced countries(tanners, makers)

As a result of the study, the Japanese experts confirmed that there are reputable companies thatcan export tanned leather and leather goods to Japan. Ten partner companies – four goods and garment
manufacturers, two footwear manufacturers, and four tanneries – were selected, and then those companies
were requested to cooperate with us as partner companies. One of them, Ethiopia Tannery funded by
Pittards plc. in the United Kingdom, declined to take part due to the extreme difficulties it had experienced
in its efforts to enter the Japanese market3. The other remaining nine companies expressed their willingness
to cooperate4. The outline of these nine companies is as follows:3

They made a note that a unit of trading with Japanese companies is small and that the quality demand required by Japanesecompanies is rigorous.
4 It should be noted that Pittards Products Manufacturing, an affiliate of Pittards plc., recommended by a person in charge ofEIC, became involved in April 2015. Ethiopia Tannery provided products to be displayed at the product launch event for leather
and leather goods wholesale suppliers in April 2015 and at the International Fashion Fair (IFF) in July 2015, yet its participation
was limited in scope.

55

Table 4-7 Results of field survey on leather related companies
NO C
1

2
3

CompanyP.C
Name
ELICO Awash ●TANN
E Company AR
Y Bahirdar

4

Dire

5

Company B

6

7

G Leather
O ExoticaODS&GA Kinaff
R
M
E
N
T
S

Criteria
U
V
F
A
B
A

Overall Comments- It produces high quality sheep leathers for export constantly (its destination includes Japan), andits production capacity is large enough (50,000SF/day). Its water treatment facility is also confirmed.
- Its quality highly appreciated by the Japanese expert.
- The company's readiness for export deals with Japanese companies is appreciated.

A

C

-

- Not willing to participate to the project

●

B

B

A

- It produces good quality sheep leathers for export constantly (its destination includes Japan), andits production capacity is large enough (20,000SF/day). Its water treatment facility is also confirmed.
- The company's readiness for export deals with Japanese companies is appreciated.

●

B

B

A

- It produces good quality sheep leathers for export constantly (its destination includes Japan), andits production capacity is large enough (28,000SF/day). Its water treatment facility is also confirmed.
- It has been selected as winner of the regional award for Africa in the Fourth Tannery of the Year
competition in 2014.
- The company's readiness for export deals with Japanese companies is appreciated.

B

B

B

- It produces good quality sheep leathers for export constantly, and its production capacity is large
enough. However, its environmental treatment might be an obstacle for export deals with Japanesecompanies.

●

A

A

C

- Though its export experience and production capacity are rather limited (e.g. about 40-50
bags/week), its products have a remarkable quality even against the Japanese market standard, andtheir designs are unique with cultural messages behind. Its high aspiration to contribute to theimprovement of the country's image and high commitment to the quality are in align with the PJ's
objectives.
- The company is willing to develop a variety of products that are made of sheep leather. This
creativity will help us find the potential of Ethiopian sheep leather.
- The company's potential to contribute to the brand development and to play a role as a medium of
the brand promise is appreciated.

●

B

A

B

- It has sheep leather products, majorly garments, with satisfactory quality, that is controlled in a
certified management system (ISO9001/2008). Its high commitment in quality should be remarked.
It also has a constant export experience (e.g. Germany), and its production capacity is satisfactory(e.g. about 625 bags/month).
- The owner has strong passion for creating leather products and leather itself. His commitment toleather will help us find the potential of Ethiopian sheep leather.
- The company's potential to contribute to the brand development and its readiness for export deals
with Japanese companies is appreciated.

8

Zaaf
Collection

●

B

A

C

- Though its export experience (some export deals with the US companies since last year) andproduction capacity are rather limited, its products have a satisfactory quality, and their designs are
unique with cultural messages behind. Its high aspiration to contribute to the improvement of thecountry's image and high commitment to the quality are in align with the PJ's objectives.
- The company's potential to contribute to the brand development and to play a role as a medium of
the brand promise is appreciated.

9

Modern Zege

●

B

B

A

- It produces good quality sheep leathers products for export constantly (e.g. the US, Europe, andMiddle East), and its production capacity is large enough (e.g. about 3,900 bags/month).
- The company's readiness for export deals with Japanese companies is appreciated.

10

Company C

B

B

B- Though the product's quality needs some improvement for the high-end Japanese market, it hasenough export experiences (e.g. the US) and production capacity (e.g. about 250 bags/month).
However, these are not decisive enough.
- The owner's commitment to the leather sector and his experience and knowledge should be noted.
He was the member of Taytu project by UNIDO and visited Japan as a member of promotionaldelegation with the former prime minister.

11

Company D

BBC- Its products have certain quality, and also the company has supportive vision. However, its export
experience (e.g. Canada (but not stable)) and production capacity is limited (e.g. about 125
bags/month).

56

NO C
12

Company
Name
Company E

13Company F

BBC- Its products have certain quality, and also the company has supportive vision. It also has aconstant export (e.g. the UK). However, its production capacity is limited (e.g. about 60
bags/month).

14

Company G

BBC- Its products have certain quality and some uniqueness in design, and also the company has
supportive vision. However, its export experience and production capacity are limited.

15

Company H

BC-- Not willing to participate to the project(Not Ethiopian company)

16

Company J

C

-

-

17

Company K

C--- It has sheep leather products, but the quality of the products is not satisfactory yet for the high-end
Japanese market.
- It has sheep leather products, but the quality of the products is not satisfactory yet for the high-end
Japanese market.

18

Company L

C--- It has sheep leather products, but the quality of the products is not satisfactory yet for the high-end
Japanese market.

19

Company M

C--- It has sheep leather products (gloves), but the quality of the products is not satisfactory yet for thehigh-end Japanese market.

20

Company N

C--- It has sheep leather products, but the quality of the products is not satisfactory yet for the high-end
Japanese market.

21

Company O

C--- It has sheep leather products, but the quality of the products is not satisfactory yet for the high-end
Japanese market.

22

Company P

C--- It has sheep leather products, but the quality of the products is not satisfactory yet for the high-end
Japanese market.

23

Company Q

C--- It has sheep leather products, but the quality of the products is not satisfactory yet for the high-end
Japanese market (its product is currently only for the local market).

●

A

A

C

- Though its production capacity is rather limited (so far have outsourced the production function toother factories, but will install their own factory in the coming January), its products have aremarkable quality even against the Japanese market standard, and their designs are unique with
cultural messages behind.
- Its high aspiration to contribute to the improvement of the country's image and high commitment
to the quality are in align with the PJ's objectives.
- It also has constant export experiences in high-end markets (e.g. the US, the UK, and Hong Kong).
- The company's potential to contribute to the brand development and to play a role as a medium of
the brand promise is appreciated.

●

A

B

A

- It has a variety of sheep leather products with competitive quality, that is controlled in a highlyorganized management system with KAIZEN system incorporated. Also, its production capacity witha modern factory is remarkable (25,000 pairs/month).
- The company's readiness for export deals with Japanese companies is appreciated.

24

F ENZI
O
O
T
W
E
A
R

P.C

Criteria
U
V
F
B
B
C

Overall Comments- Its products have certain quality and some uniqueness in design, and also the company has
supportive vision.
- Also its production capacity is satisfactory (e.g. about 600 bags/month). However, its export
experience is rather limited (it has just had some spot export deals with some companies in the US).

25

ELICO
Fontanina
Shoe factory

26

Company R

B

AB- Not Ethiopian company

27

Company S

C--- It has sheep leather products, but the quality of the products is not satisfactory yet for the high-end
Japanese market.

28

Company T

C--- It has sheep leather products, but the quality of the products is not satisfactory yet for the high-end
Japanese market.

29

Company U

C--- It has sheep leather products, but the quality of the products is not satisfactory yet for the high-end
Japanese market.

30

Company V

C--- It has sheep leather products, but the quality of the products is not satisfactory yet for the high-end
Japanese market.

31

Company W

C--- It has no sheep leather products and no uniqueness though LIDI recommended it as high potential
company. The quality of the products is not satisfactory yet for the high-end Japanese market.

57

4.2

Identifying a brand concept for the target sector
The leather sector, especially the sheep leather, was selected as a target sector and as a “sub-brand”

under the brand concept of “Creativity in Motion” among all of the champion products. Ethiopian sheep
leather is an iconic product that embodies “Creativity in Motion” (see Chapter 3). Thus, the entire concept
and the progress made in brand video production were shared and reviewed at a branding workshop to build
a brand (see Figure 4-2 below)．

Figure 4-2 Relation between master brand and sub-brandAs with the master brand, a branding workshop was organized to consider draft brand concepts
and brand names that extract and embody the unique values of the sheepskin produced in Ethiopia. As forthe sub-brand, the Japanese experts proposed and created a brand logo for marketing.

4.2.1

Branding workshop
A workshop was organized in Addis Ababa in January 2015 with the goal of building a brandconcept, considering a brand name, and creating a brand logo（ICCPA B）. Prior to the workshop, theJapanese experts reported the information collected during the first field study in November 2014, theoutcome of the interview with a person in charge of the laboratory at LIDI, and the characteristics ofhighland hair sheep leather. At the workshop, the Japanese expert raised the following three points:58

(1) Ethiopian sheep leather is a valuable material with four rare characteristics: thinness, lightness,

strength, and flexibility. It has high potential for producing something very different from traditional
leather products.
(2) Ethiopian sheep leather has softness like that of a baby’s skin.
(3) Ethiopian sheep leather can come in a variety of colors.

It was emphasized that Ethiopian sheep leather with these characteristics would overturn theconventional perception of leather as being “heavy,” “stiff,” and “binding” and that it would have potential
as a totally new type of “thin,” “light,” “soft,” and “comfortable” leather material.
To agree on the brand creation policy, four draft policies, brand concepts, brand names, and brandlogos were proposed as indicated below. Each proposal tried to underline the characteristics of Ethiopian
sheep leather to demonstrate that it is a completely new type of leather material.
Policy A: Highland Leather -The Highest-Quality Sheep Leather from the Highlands
Policy A emphasizes a geographical feature of Ethiopia, focusing on the "High Altitude (Highland) " andthe Ethiopia-specific highest quality of a leather material.
Policy B: Air Leather - Feather-Light Leather with Unlimited Possibilities
Policy B describes the functional characteristics of the thinness and lightness of Ethiopian sheepskin,figuratively referred to as “air,” to promote leather material with unique characteristics.
Policy C: Summer Leather - Leather is No Longer Reserved for Winter
The images of “thin” and “light” from the functional characteristics of the Ethiopian sheepskin make one
want to wear this leather material in the summer, thus creating new demand diverging from the fixed ideaof leather for autumn and winter.
Policy D: Sheep Cloth - Light as Silk. Comfortable as Cotton. No More Limits to Leather
From the functional characteristics of Ethiopian sheepskin, such as “thin” and “light,” Policy D emphasizes
the possibility of having leather that is “light as silk, pleasant as cotton”. This points to a high degree of
freedom to wear and use such a material.
At this workshop, the above four draft policies were discussed. Various views and comments wereexpressed, including:“Ethiopian Highland Leather that represents Ethiopia and includes a country name in the brand name isgood to emphasize that a product is Ethiopia-specific.”“Air Leather is easily translated to be a new leather material because it captures well the functional
characteristics of sheepskin in Ethiopia.”59

In preparation for the product display at an exhibition in Japan that was scheduled as part of thisstudy, discussions were held to identify an iconic item (an iconic product) and variations of color that
express more vivid characteristics of Ethiopian sheepskin. With regard to an iconic item, “T- shirt” and“ballet shoes” were mentioned as items that may differentiate light and thin Ethiopian sheepskin from other
leather materials. Regarding the variations of color, bright colors were selected to symbolize a departurefrom the conventional image of “heavy” leather materials.

4.2.2

Define the brand concept, choose a brand name, and create a brand logo
Through the field study as well as reviews and consultations with stakeholders, the ICCPA B

members reached a consensus on Policy A “Highland Leather.” In addition, they decided on the brandconcept, brand name, and brand logo (see Table 4-8).
It was also agreed with the Ethiopian side that, in line with the agreed concept, six “brand stories”
should be created to highlight the main promises the brand will make and that a brand book, a flyer, andother promotional tools should be created to send out a consistent message. These brand stories were createdin such a way as to describe the distinctive characters (uniqueness) of Ethiopian Highland Leather in acustomer-friendly manner, in a motif of numerical figures associated with Ethiopian Highland Leather (seeTable 4-9)
Table 4-8 Ethiopian Highland Leather brand concept with name and logo
Brand concept

Light, thin, and soft. Yet, strong, and durable.
World’s highest-quality sheep leather made in the highlands of Ethiopia

Brand name

Ethiopian Highland Leather

Brand logo

Table 4-9 Ethiopian Highland Leather’s brand story
3.5 Million Years Ago
Ethiopia, the Cradleof mankind.

Ethiopia is the birthplace of human beings: the land where humans began
creation. In producing new inventions, such as coffee, one after another, Ethiopia
has always created new things that had never previously existed in the world.
Ethiopia's versatile wisdom and dependable techniques for craftsmanship havebeen passed on for generations, causing the country to become Africa’s largest
growing country during the past decade.
Ethiopian Highland Leather is a crystallization of the pride, enthusiasm, andcraftsmanship of Ethiopians, a flagship industry of Africa’s largest growing country.

60

26 Million Sheep
The largest
population of sheep
in Africa
3000 Meters
Ethiopia’s highlands
have bred a special
type of hair sheep.
0.35 mm
Surprisingly thin andlight yet, strong with
dense fibers

1860 Pores/cm2
Soft, smooth, andheavenly texture
comes from the fineskin structure
100+ Colors
A new look and feelto leather

4.2.3

Ethiopia's sheep population is 26 million. That is a world-class figure and thehighest in Africa. Sheep is a very familiar part of life for the people of Ethiopia,
supporting people’s lives in various ways. Sheep leather has historically been oneof the major industries of Ethiopia.
Out of the millions, only a handful with the very-best-quality skin become labeled
as highland leather, to be delivered to the rest of the world.
Ethiopia is blessed with a pleasant climate for its low latitudes, thanks to its
highlands of more than 3,000 meters in elevation. Because sheep raised in
Ethiopia have no need to protect their bodies from the bitter cold, they are
distinguished by their incredibly thin skin. This sheepskin is so thin that it can be
fashioned into sheep leather unlike any other in the world.
Thin sheepskin is what makes for thin and light sheep leather. The skin of thespecial-hair sheep raised in Ethiopia is approximately 0.8 mm thick. The amountof fat in an Ethiopian hair sheep's body is a lot less than that of a typical wool
sheep because they have no need to protect their bodies from the cold.
Thin sheepskin and the skilled craftsmanship of Ethiopian tanners have enabled
the creation of amazingly thin, light, yet strong leather with dense fibers. It can bethinned down to 0.35 mm, enabling a delicate finish, flexibility in movement, andmore freedom to be used to create innovative products, previously unheard ofleather.
Another major characteristic of Highland Leather is its fine and soft texture. The
sheep bred in the Ethiopian highlands have increased hair pores, which number
up to 1860 per square centimeters. The number of hair pores results in fine andsuperior grain patterns, enabling the leather to be surprisingly as soft andcomfortable as a newborn's skin.
Life is simply colorful in Ethiopia. Highland Leather comes in 100+ unique colors
that are made from Ethiopians' unique sense of colors and their long-practiced
dyeing techniques. The wide variety of vivid and happy colors can drasticallychange the traditional image of leather into something totally new.

Creation of brand book
It is important that once a brand has been created, all stakeholders – brand administrator, productmanufacturers, companies engaged in product marketing – understand and share the values of the Ethiopian
Highland Leather brand so as to maintain and protect the brand. For this purpose, a tool for brandstakeholders (“brand book”) was created.
Introduction – what this book is for
As a tool for all stakeholders, the book highlights rules and objectives in the introduction tomaintain the Ethiopian Highland Leather brand as an important asset.
Our story
The brand concept and brand stories are to be explained for (internal) stakeholders, and our story
is to be reviewed and shared to gain a common understanding of promotional activities.

61

Our vision
The following brand visions are to be shared by all Egyptian Highland Leather stakeholders indealing with the brand.
1. We create a new standard.
2. We create with craftsmanship and pride.
3. We create a “New Ethiopia.”
Our logo
Logo guidelines set out points of attention and a set of rules as to how the Ethiopian Highland
Leather’s brand logo should be used. A policy is also explained that the brand logo should be displayed inpartnership with other companies.
Brand visual kit
Visual designs as below, which can be used in brand presentations and brand promotional
activities, are shared to ensure the common interpretation of the brand concept:
1. brand logo, 2. photo related to Egyptian Highland Leather, 3. design elements, and 4.promotional
tools (flyer, poster, tag, etc.).
How we manage our brand
The agreed-upon brand management structure is described. The organizational structure, role ofbrand management, and criteria for brand-name quality assurance are set out.

4.2.4

Registering a brand as a trademark
For the legal protection of the Ethiopian Highland Leather brand, the brand was registered as atrademark both in Japan and in Ethiopia. The Japanese experts emphasized that there are no similar
trademarks and which registration category/ target market is the most suitable for Egyptian Highland
Leather in the preliminary surveys.
(1)

Preliminary surveys, target countries
Before trademark registration, domestic (in Japan) and overseas surveys were conducted to verify

whether similar trademarks had already been registered. Specifically, a domestic survey and an overseas
summary survey were carried out on the leather material classification (Classification 18) as well as on theassumed classifications of the end products made of leather (Classifications 9, 14, 16, and 25).

62

Table 4-10 The candidate trademark for registration
Figure：Ｗord：

ETHIOPIAN HIGHLAND LEATHERInternational

09 －”leather mobile phone case,” etc. (similar classification:11B01, etc.）

Classification

14 －“leather key ring,” etc. （similar classification：13C02, etc.）

Number:16 －“leather stationaries,” etc.（similar classification：25B01, etc.）
18 －“leather, bag,” etc.（similar classification：21C01 and 34C01, etc.）
25 －“glove, clothes, shoe,” etc. (similar classification：17A01, 17A04, and 22A01, etc.）

Methods/

Japan

Performed a trademark search in “TM-SONAR” brand

Scopes ofdatabase

Survey・application to be filed before 26 January 2015
・date of international registration/ date of subsequent
designations before 24 November 2014
Overseas

Performed a trademark search in “SAEGIS” brand database・Trademark applications filed immediately prior to the survey
are not recorded in the data.
・Common law survey is not included.
・Surveyed regions: North America (five countries), Central
America (seven countries), South America (12 countries), theCaribbean (22 countries), Europe (56 countries), Middle East
(16 countries), Africa (34 countries), Asia (25 countries),
Oceania (seven countries)

As a result of the preliminary surveys, the Japanese experts found that, in Japan, there is no“conflicting” trademark as long as Classification 18 “leather material” (leather raw materials) is concerned,
so the registration of the brand should be possible. Yet, there are six “Highland” trademarks in the assumed
classifications of end products made of leather; thus, there is a possibility of trademark infringement. As
for overseas countries, there was a “Highland Leather” trademark in the United Kingdom (UK) that is now
expired. From the surveys, it can be said that there are a number of trademarks using “Highlands” inClassification 18 and in other related classifications. Thus, as in Japan, the Japanese experts cannot deny
the possibility that the registration of this brand may be considered an unauthorized use of a trademark.5
5 This survey was a screening survey with the goal of finding out the same trademark, and it does not guarantee that there is no“similar” trademark in existence. The comments on this survey do not reflect the views of local experts.

63

(2)

Discussions with the relevant stakeholders in Ethiopia
Based on the results of the preliminary surveys, details were discussed and confirmed, including:countries in which a trademark application should be filed; classifications to be specified in the application;
and who should be an applicant. Concerning the target countries for trademark registration, LIDI hoped to“register the brand as a trade mark in as many countries as possible.” It was agreed upon, however, that an
application should first of all be filed as soon as possible in those countries where the brand must be
registered as a trademark in any case and that an application should be filed in Ethiopia and Japan.
With regard to the question of classification in the registration process, it was suggested in April
2015 that Classification 18 (leather material) should be specified in the application only this time and thatthe two brand names should be joined up: i.e., “Ethiopian Highland Leather as a leather brand” and “thebrand of a local manufacturer.” Both EIC and LIDI wanted to specify as many classifications as possible inapplications for end products; discussions were to be concurrently held as to who should bear the cost of
applying for and registering a trademark.
As a result, it was agreed upon that the Japanese experts should apply for trademark registrationin Japan on behalf of the Government of Ethiopia and that only Classification 18 should be specified in theapplication. Regarding trademark registration in Ethiopia, according to the information provided by the
Embassy of Ethiopia in Japan, various rights owned by Ethiopia as a government are aggregated in, andmanaged by, the Ethiopian Intellectual Property Office (EIPO) within the Ethiopian Ministry of Scienceand Technology. In September 2015, when Japanese experts and other stakeholders visited EIPO, it was
indicated that a consultation committee should be set up to bring together stakeholders and to prepare fortrademark registration. Also, in September, EIPO indicated that it would be difficult to become an applicant
and suggested that LIDI be made an applicant instead to proceed with the preparation. Eventually,
discussions were held in Ethiopia among LIDI, EIPO, and ELIA. Then, it was agreed that ELIA should be
an applicant and be assisted by LIDI. At the end of September 2015, ELIA filed an application with EIPO,
specifying the abovementioned classifications, and the application was accepted.6(3)

Registration in Japan
Prior to the first presentation of the brand at the Japan Fashion Week - International Fashion Fair

(JFW-IFF), an application dated 10 July 2015 was filed and accepted in Japan. It will take about five months
for the patent office to examine the application and, should there be no irregularities, registration fees will
be paid to complete the process.
The trademark registration information is as follows. So that the Ethiopian government could
manage this trademark at the end of this CPA 2 study, the applicant was the Federal Democratic Republicof Ethiopia government.
Trademark registration number:
6

No. 5817743

ELIA bore the cost of filing an application in Ethiopia.

64Designated goods classification:

International Classification 18th Class(Clothes for companion animals, bags, vanity, umbrella, horseriding equipment, leather)

Trademark owners:

Federal Democratic Republic of Ethiopia

Application number:Filing date:2015-065853

Registration date:2016 January 8(4)2015 July 10

Registration in Ethiopia
EIPO is an office in charge of trademark registration and administrator, and the CPA brand wasapplied and registered as follows.
Trademark registration number:

No.113-15 / 12/2015

Designated goods classification:

International Classification 18th class(companion animals for bags class-bag cargo, vanity, umbrella, horseriding equipment, leather)

Trademark owners:

Federal Democratic Republic of Ethiopia

Filing date:

7 September 2015

Date:

7 September 2016

4.3

Development of promotional tools

4.3.1

Small booklet
In the creation of the Ethiopian Highland Leather brand, a small booklet was created as a brandpromotional tool that shows the value of this brand in a simple manner (printed 2500 sets).
TV conferences were organized with the Ethiopian side to discuss “a way to make Ethiopian
Highland Leather look attractive” and to agree on the copies, photos, and designs to be featured in thebooklet. The small booklets were distributed at the Ethiopian Business Seminar, held in Japan, in April
2015, at a product launch event for leather wholesalers, and on Ethiopian Airlines flights for passengers.
A brand guide brochure was created for distribution to Japanese buyers at JFW-IFF hosted by The
Senken Shinbun Company, Japan’s largest trade show for the fashion industry) organized in July 2015
(printed 5000 sets). Samples of leather materials were embedded in the last page to allow people to feel the
beautiful texture of Ethiopian sheepskin. This brand guide brochure will enable additional printing in
Ethiopia via a simplified bookbinding style without leather samples, and the data for printing have alreadybeen delivered to Ethiopia.
In addition to use at IFF and other venues of business discussions, the completed brand small
booklet and brand guide brochure have been distributed as marketing tools at shops selling the products,

65

and as sales floor promotion tools. This is because the shops selling Ethiopian Highland Leather are limited,
and the applications of these tools are also limited. Nevertheless, the Japanese experts received overall
positive comments from the partners that distributed the booklets, which include:-"These can be used for customer service, and will boost our ability to persuade customers" (retailindustry).
-"I have been using the pamphlet that was created by the project as I make my sales rounds. It has beenhighly popular, and I hope to continue using it in the future" (trading company).
These comments indicate that the booklets played a large role in promoting an understanding ofEthiopian Highland Leather.

4.3.2

Production of a poster
The poster was produced for display at IFF and other exhibitions and events, and at shops thathave concluded business deals. Unlike leaflets that explain the product characteristics in detail, eyecatching body copy was developed to communicate the brand concept and to have a powerful impact at a
glance. The poster was produced in Japanese and English (A: visual version, 1000 delivered; B:
Japanese/English versions, 500 each delivered). They are being used at places including IFF sites and theshops of companies that have concluded business deals. The new shops that sell the products are limited,
and the applications of the poster are also limited, but it is expected that the opportunities to use it will
expand with the further growth of product commercialization in the future.

4.4

Understanding situations of the leather industry in Japan

4.4.1

Summary of the product launching event
Before organizing promotional activities, there needs to be an avenue in Japan for Japanese leather

goods manufacturers to access sheepskin. The leather and leather goods industries in Japan are unique inthat wholesalers import leather materials from overseas and distribute these to manufacturers. Many ofleather goods manufacturers in Japan are small and medium-sized companies. Their needs are diversified
and yet their trading volume is small, so these small and medium sized companies do not trade directly withoverseas tanners: They go through wholesalers in Japan (see Figure 4-3). Very few transactions are being
done directly with their overseas counterparts. For the start of the promotional activities of Ethiopian
Highland Leather, the Japanese experts targeted leather distributors in Japan. Then, a series of promotional
activities began in Japan, with, first of all, a product launch event for leather and leather goods wholesale
suppliers.

66

Figure 4-3 Distribution system of leather products in the Japanese market
The Ethiopian Highland Leather product launch event was organized in Japan on 24 April 2015
with 15 people from eight leather wholesalers. One of the delegates from Ethiopia was the director of ELIA.
The product launch event started with a presentation to provide Japanese leather wholesalers withnecessary information on the Ethiopian Leather Industry as well as on the Ethiopian sheepskin. The
products of four Ethiopian tanners were being displayed at the venue and, after the presentation, theJapanese wholesalers were invited to have a close look at these products and to discuss business with thetwo delegate members. Comments received from those wholesalers who took part in the event are listed
below. Many of them were satisfied with the quality of leather but requested a change in lot size (see Table
4-11).
The Japanese experts obtained from the Japanese manufacturers that MOQ (Minimum Order
Quantity) required in the initial transaction is about 1,000 – 2,000 sq ft (square feet). The minimum sizeof the MOQ that the Ethiopian tanner usually requests is 5,000 sq ft, which is a huge gap between theJapanese and Ethiopian sides.

67

Table 4-11 Comments from wholesale dealers’ questionnaires
No.

Category

Issues identified

1

Quality• The quality of samples was well appreciated• But 2 wholesalers showed a concern on if quality products could
be stably/sustainably supplied, and wanted to know the details
on inspection/checking.

2

Cost

(No comments on price in the questionnaire.)

3

DeliveryLead-time• 2 wholesalers showed a concern on the lengthiness of thedelivery lead-time.

4

DeliveryLot size• 4 wholesalers showed a concern on the minimum order lot size.

5

Others• 1 wholesaler pointed that low color fastness* limits the usage ofleathers.
• 1 wholesaler pointed that the size of Ethiopian sheep leather
limits the usage of leathers.

* Fastness refers generally to robustness (resistance). In the leather sector, it means color fastness, showing
resistance of the material dyed, such as a dye, e.g., "degree of color staying in the material” or “the difficulty offall colors." In Japan, the test methods are stipulated by Japanese Industrial Standards (JIS). The results areshown in the numbers of five classes from first grade in semi-class increments (such as 2.5).

4.4.2

Visit to the glove manufacturing cluster in Shikoku
Sheepskin is a popular glove material, and there is strong demand for Ethiopian sheepskin among

glove manufacturers in Japan. Some Japanese companies are already trading with Ethiopian companies. In
April 2015, during the visit of Ethiopian representatives to Japan, they visited the glove manufacturing
cluster in Higashi-Kagawa in Kagawa Prefecture at the request of ELIA’s director and were accompaniedby the Japanese expert. They visited three glove manufacturers and one tannery. They brought samples ofleather materials and discussed with Japanese counterparts about the quality of Ethiopian sheep leather.
Overviews of these four companies in Shikoku are listed in Table 4-12, and the comments received fromthese companies in Shikoku regarding the quality of Ethiopian sheep leather are listed in Table 4-13.
Table 4-12 Overview of the companies visited
Companies
Company A(tannery)Mainproduct
Sport sheep
leather, cow
leather

Trade history with Ethiopia

Potential for trade

Started business 20 years ago. Currently
trading with Bahir Dar. Used to importpickled skins. Now import only finishedleather. Inform the counterpart of ourtanning and coloring requirements as wellas information to be treated as a trade
secret, such as the amount of the tanning
agent, duration of the soaking period, andwater temperature so that we can getwhat we want. In principle, import nondyed finished leather so that dyeing andre-shaving are done in our own factory to
improve the quality.

Raw leather materials arein high quality and should
continue to be traded.

68Company B

Dressing
glovesHave traded with Pittard. Overall,satisfied. Deal in only finished leather.

Satisfied with current
trade. Wish to continue
and expand trade in the
future should the quality
improve and the delivery
be made on time.

Company C

Sport gloves:
golf gloves,batting
gloves, etc.

Did trade with some in the past. As ofnow, have received some samples from
Pittard to make a decision about where or
not to do business with Pittard in the
future.

Willing to do business, as
the quality is high. Thatsaid, is concerned about
whether the same highstandard of product could
be guaranteed in the
future.

Company D

Sport gloves:
golf gloves,batting
gloves, etc.

Have done no direct business. Until 20
years ago, had bought a large volume ofpickled skins from Japanese tanneries.
Currently, the volume has decreased.

Is concerned about
fastness durability to use
the material for sport
gloves. Will use thematerial to make gloves at
our factory to see thedurability and condition of
the final product so as todecide whether or not to
do business with
Ethiopian counterparts.

Table 4-13 Main comments received from glove manufacturers

Raw skins-Thin, good strength, quality exceptionally high for production of gloves compared tohair sheep leather materials from other countries. Used to try those from Eritrea andUganda, but the quality was much inferior.
-What is ranked as Grade 4 in Ethiopia is ranked as Grade 1 in neighboring countries,and some are totally useless.
-The fact that the quality of law leather skin is high is known to everyone in thisindustry.

Tanning andfinishingtechniques-The quality of raw skin is high, but finishing techniques are poor. Use Indonesian law,leather skin finishing techniques are very adequate, although its quality is inferior tothat from Ethiopia.
-As for finished leather, the quality remains unstable due to the damages sustained
during the tanning process and the poor storage facilities. If finishing techniques are
inadequate, it is hard to consider using it.
-The quality is affected during the tanning and dyeing process, so tanning and dyeing
techniques are important.
-With regard to the Ethiopian sheep leather currently in our use, the quality of those inblack or in chocolate color is more or less satisfactory, but those in pale colors areinferior quality.
-With regard to Ethiopian sheep leather, the quality is substantially reduced during thefinishing process. It is therefore ideal for Japanese companies to set up a tanner and afactory in Ethiopia under their own tanning process quality control.
The results of leather strength testing indicate that the strength of Ethiopian sheep
leather is sufficient for fashion leather gloves. Yet, the loss of color is a concern. On theother hand, Ethiopian sheep leather is not suitable for golf gloves. Fastness anddurability are important.
-Have a feeling that products offered by local tanneries are technically inadequate.
Sport gloves are not lined, so a good texture is crucial. Not only the grain side but also
the suede side need to be processed properly; otherwise, it cannot be used.

69Delivery-Current local business partners may take up to seven to eight months to make thedelivery once an order is placed. On top of this, there are many other troubles, such as
products being kept at some place in route for a will call.
-Poor storage facilities undermine the quality. The farther the place of production, thegreater the number of troubles that occur during shipping: In this sense, trading with
Ethiopia, far away from Japan, is a high risk.
-To procure products directly from Ethiopia is highly risky due to the number of delivery
days and the due date compliance.

Currently, many Japanese tanneries are located in Himeji City, Wakayama City, and Soka City, of
which only three tanneries deal with Ethiopian sheep leather. Labor cost and manufacturing overhead are
relatively high compared to those for imported products, which pushes up the price of domesticallymanufactured end products. The demand for golf gloves is affected by economic ups and downs and has
thus shrunk in recent years. All of these factors have reduced both their market share and the number oftanneries. Many leather goods manufacturers import finished leather directly from overseas tanners.
A total of 2.06 million pairs of leather dressing gloves and 6.7 million pairs of golf gloves areannually sold in the Japanese market, out of which 1.4 million pairs are made of natural leather. A large
volume of sheep leather was imported in Japan from Spain and Greece. Yet, as the number of meat sheep
has decreased, trading in sheep leather has gone down. Currently, Indonesia is the biggest exporter. Leather
gloves account for 30 to 40% of the total production of gloves; the majority of them are priced at more orless JPY 10,000. Unlike in the past, those at a premium price do not sell well.
Many of those companies in the glove manufacturing cluster in Higashi-Kagawa have set up
factories overseas and started production there. As a consequence, efforts to build talent pools in Japan havebeen hampered. Most artisans in Japan are in their 50s and 60s: Inspiring a new generation of talented
young artisans is necessary if the cluster is to maintain a consistent Kagawa brand identity.
Under these circumstances, in the opinion exchange with the glove manufacturing cluster, theJapanese experts heard many positive opinions regarding the increased awareness about Ethiopian sheep
leather, although the voice of concern about a conflict with Japan’s domestic leather industry was heard
through the efforts of the CPA.
From the above, the considerations for and cooperation with the Japanese leather sector are
summarized as follows.

4.4.3 Consideration of cooperation with the leather industry in Japan(1) Needs and expectations of the Japanese leather sector
1) Quality improvement of the leather
Before Ethiopia’s government limited the export of raw hides and skins, the trading scale withJapan was second only to that with Italy. Then, expectations for the potential of Ethiopian sheep leather
increased, and they are still high today. Therefore, if Ethiopian domestic tanneries’ technology is improved70and the concerns regarding fastness and strength are dispelled, it is highly possible that the import of the
final products will be increased via manufacturing bases in third countries.
2) Products
Due to the movement of Japanese companies to move their production bases overseas and toincrease labor wages in recent years in Asia, Ethiopian domestic manufacturers could have the opportunity
to start trading with Japanese companies if they could improve their technology.
3) Brand establishment
The interviewed tanners and glove manufacturers previously knew the comparative advantage ofEthiopian sheep leather’s unique quality. In particular, because their main battlefield is the domestic nichepremium market, they have high expectations that branding will provide high added value to the leather
material.
(2) Threat to Japanese leather sector
Japanese tanners have felt that the technological improvement of Ethiopia domestic tanneries is athreat to them. Similarly, glove manufacturers feel that the technical improvement of Ethiopia domestic
manufacturers is a threat.
1) Possibility of cooperation
The glove maker cluster in Kagawa Prefecture has begun efforts to brand "Kagawa gloves," andit is worthwhile to create double-name products with the brand tags of Kagawa gloves and Ethiopian
Highland Leather. However, the Kagawa glove is at a stage where a concept model can be developed totransmit a brand image toward the premium market. It is difficult to expect the order in bulk. In addition,
because a lot of special processing is required that cannot be manufactured in Ethiopia domestic tanneries,
such cooperation is difficult at the moment.
To give consideration to each of the threats that Japan tanneries and manufacturers have felt, it isimportant to deepen exchanges between producer organizations and to explore the road of cooperation.

4.5

Exhibition at JFW-IFF
Following the product launch event for leather wholesalers in April 2015, an exhibition at JFW-IFF hosted by The Senken Shinbun Company was arranged in July 2015. The purpose of the participation
was to inform customers of leather wholesalers, manufacturers, and retailers of the values of Ethiopian
sheepskin and thereby to stimulate their demand, as well as to invite partner companies from Ethiopia andto provide them with the opportunity to learn exhibition procedures and the advantages of product displays.

71

4.5.1

Select exhibiting companies
The six representatives of the partner companies were invited to Japan for the exhibition at IFF.

Prior to their visit in April 2015, a seminar was organized in Ethiopia to explain the objectives of IFF.
Following this seminar, 10 companies were selected in reference to the points of consideration listed below.
Table 4-14 Selection points of partner companies for JFW-IFF in Japan
Selection Point

Detailed Contents

Participation andcontribution to thephase 2 activities

Number of times to participate the CPA2 meetings and TV conference in the past.

Submission of
motivation
statement

The motivation to participate IFF is clearly written in a A4 paper and the paper is handed in time.

Submission of
new design/
sample for IFF

Along the advice given by the Japanese experts, production plan with drawings or improved samples
are submit in time. This is subject to only manufacturing companies among the partner ones.

Production ofsamples in time

The company should make the samples on the basis of the submitted production plan. The products
should be suitable for IFF, which mean high quality with uniqueness. The products should be sent intime. This is subject to only manufacturing companies among the partner ones.

Provision of sheep
leather

The company in tannery should provide high-quality sheep leather to partner manufacturing
companies. This is subject to only 4 tanneries among the partner companies.

Through this selection, the five persons listed below were finally invited to IFF. Also, an officer
in charge of LIDI was also invited from the Ethiopian government.
Partner companies and organizations:
1. Leather Exotica
2. Modern Zege
3. Pittards Products Manufacturing/ Ethiopia Tannery (one person to represent bothcompanies)
4. ELICO Awash Tannery/ ELICO Fontanina (one person to represent both companies)
5. Dire Tannery
6. LIDI

4.5.2

Basic concept for the exhibition
Branding in this study involved building a brand of leather materials. Yet to deliver the message

about its characteristics, e.g., “durability,” “lightness,” and “softness,” to buyers at the exhibition in a72

comprehensive manner, it was necessary to display those products by making full use of thesecharacteristics. These products are also to be in a set of 10 standard colors7 so as to express the new potential
for leather materials as described in the brand book as well as to make a strong impression on buyers. Allof the tanners took their share of responsibility for the 10 requested colors so that the each partnercompanies could make their products with exactly the same colors.

4.5.3

Assistance with product development
Following visits by the Japanese expert to respective companies, a production development

workshop was organized in April 2015. In this workshop, it was agreed with the participants that three
product images (“lightness,” “durability,” and “beauty”) should be pursued in developing products under
the CPA brand concept, which would highlight the characteristics of Ethiopian sheep leather. In other words,"light" and "strong" refer to making products using the sheep leather’s features. Meanwhile, "beautiful"refers to creating products that have complete matching between the materials and design.
Products manufactured by individual Ethiopian companies lack in originality, as do thecharacteristics of these companies. To express this originality, the participants considered which should begiven more attention: overwhelming artisan techniques, culturally inherited goods manufacturing or
innovative designs. Regarding decoration, although some companies use Ethiopia’s unique patterns andcolors, no company tried to achieve beauty in products by featuring the characteristics of sheep leather.
Sheep leather’s “softness and thinness” are linked with the difficulty with manufacture in the
product development process. A hard stiffener helps with maintaining the overall shape of the products, but
it compromises the softness of sheep leather and the texture of the material. To overcome these constrainsof sheep leather the following three techniques were suggested in the workshop that may help respective
companies to develop what could be a flagship product by making full use of the characteristics of sheep
leather.
Quilting
It is possible to have the tension to create a form by using this technique. In addition, it is possible tocreate larger products from small pieces of leather because seams become difficult to see.
Gathered
It is possible to create a form by using this technique. Even in bag making, it is possible to create theform for the same reason. The soft gather that this leather can produce is not seen in other leather.
MeshThinner-cut tape can be used without wasting leather. Furthermore, because it is possible to make aseam where tape is overlapping, this method can help to make products with whatever sizes andwhatever shapes are needed.
7

These 10 colors are: cinnabar, orange, yellow, yellow-green, aqua, turquoise, violet, hot pink, pearl white, and charcoal grey.

73Based on the discussion in the workshop, the Japanese expert suggested that each partner company
ameliorate existing products and decide to display improved products, including a shopping bag and snood(tubular scarf) (by Leather Exotica), flat shoes, and a scratch bag (by Modern Zege), glove and T-shirt (byPittards Products Manufacturing), and moccasin shoes and trainers (by ELICO Fontanina).

4.5.4

Display at the standThe stand was set up to match the brand image with white wall panels. Samples of the leather

materials that these tanners provided were displayed on the wall panels, whereas the products of respective
companies were laid out on the table in front. The brand video Creativity in Motion was run, with themonitor being placed to face the walkway, i.e., main touring route. To encourage visitors to stop by and to
take a look at these products, coffee was offered by Ethiopia’s TOMOCA Coffee Japan. Ms. Hiroko
Samejima, designer and producer of leather products in Ethiopia, kindly agreed to display the products ofandu amet (her own company) in the stand.

Figure 4-4 Ethiopian Highland Leather exhibition stand74

Figure 4-5 Ethiopian Highland Leather stand layouts

4.5.5

Exhibition summary
JFW-IFF was held from 22 to 24 July 2015 in the West Exhibition Hall at Tokyo Big Sight. A

total of 14,254 people visited during the exhibition period, and 440 companies displayed their products. In
our CPA2 stand, the partner companies were able to have IFF set business negotiations with three Japanesecompanies. (These three companies are major corporations with many stores across Japan.) In three days,
business talks and negotiations were done with some 150 companies in the stand. During the exhibition,
two partner companies received orders worth JPY 2.3 million in total from the Japanese companies.

Figure 4-6 Breakdown of visited companies in the exhibition stand, by sector
At the exhibition, the Japanese experts asked visitors what they would need and what they thinkshould be improved. Visitors were also to fill in the questionnaire. Nearly half of the respondents mentionedthat design improvement would be required, and many respondents expressed concern about the deadline
for delivery, the cost of shipping, and the product quality inspection system as possible impediments totrade (see Figure 4-7).
75

* multiple responses** the number of valid responses19, no responses 11* multiple responses** the number of valid responses 43, no responses 3

Figure 4-7 Visitor requirements and concerns
Comments received from visitors during business negotiations are shown in table 4-15.
Table 4-15 Comments from the visitors to JFW-IFF stand
Items
On ProductComments“An amazing material regarding touch and color.” (Manufacturer)“Very soft, suitable to product for babies.” (Retailer)“Well presented, but some adjustments will be necessary for practical use”.
(Department Store)“Stitching can be improved.” (Retailer)“Models for gloves and shoes should be adjusted for Japanese consumers.”(Wholesalers Retailer)“Some concerns on the inspection if you can keep the level of quality control even after
the current OEM contracts are over.” (Retailer)“Concerned about color fastness.” (Manufacturer, Wholesaler, Retailer)

On Price“Leather sheets are not expensive considering the unrivalled quality.” (Department
Store)“Shoes are surprisingly low-priced, considering the quality of the leather.” (Wholesaler,
Retailer)“Jackets and bags are expensive. If the FOB (Free on Board) price is around 200250USD, the retail price in Japan will be 2000-2500USD (10 times of the FOB price).”(Retailer)* Regarding bags, shoes, and other articles, the retail price will be 3-4 times the FOB
price.

On Place/
Distribution/
Sales
channel“Minimum lot size is large for the segmented Japanese market (for both leather sheet
and product). Especially for new items, we cannot take a big inventory risk.”(Wholesaler, Retailer)“It would be difficult without a wholesaler/agent who intermediates transactions in termsof communication, quality control, etc.” (Retailer)“If there is an established business scheme, it would be much easier to start thebusiness.” (Department Store)“What will be a tariff if we ask to deliver leather sheets to our Chinese factory, and thenimport products from China?” (Manufacturer)“Is it possible to prepare a product tag on how to care the product?” (Retailer)76

On
Promotion“We can do the double-name with the Highland Leather brand. Rather, we want a
product tag explaining the value of Ethiopian Highland Leather in order to justify thepremium.” (Retailer)* Also, there was a customer who requested the data from the poster to use in her/his
shop.
** There was a customer who agreed to use about doing the double-name tag with
Ethiopian Highland Leather.

For the CPA products, many visitors were surprised at the softness of the Ethiopian sheep leather.
The Japanese experts confirmed that the intention of the exhibitor side, promoting the material itself as a
new possibility of use, was conveyed enough to the visitors. On the other hand, the Japanese experts heard
many voices of concern about its color fastness and about the accuracy of the results of the testing done at
the Institute of Leather Research of Japan, with people claiming that only good data were chosen
intentionally to show. As for the final product, the visitors mentioned some issues in the pattern, sewing
level, and inspection system in the Japanese market. These comments are related to the production
technology capacity and production management system of Ethiopia companies, emphasizing how every
business should work energetically to improve their technology. Of course, it is also important to provide
more information on the fact that some companies have extensive experience with trading with the UnitedStates and Europe.
The price particularly discouraged visitors from attending the exhibition. While it was generally
tradable amount for leather material itself, visitors said the product’s final price was high. Because highquality leather material is already expensive in Ethiopia, it would be necessary to facilitate cooperation
between tanneries and manufacturers for high-quality leather distribution at a moderate price in Ethiopia.
For distribution, for both the leather material and the final product, the lot size for MOQ(minimum order size = minimum order quantity) became a problem. MOQ is usually small in the Japanesemarket. Suspecting the instability of the quality, the visitors were hardly comfortable with starting any
business before the MOQ issue was solved. The Ethiopian side needs to know this business environmentand set the MOQ low for the first time of trading at the beginning, for example.
For promotional methods, some visitors stopped to see the stand much more than the others did,and their impression was favorable overall. Many also requested the sales of promotional materials andgoods, which left us a new problem; how promotional materials and goods can be made available to thecustomer after successful promotion in the exhibition.

4.6

Workshop in Japan (July 2015)
During their stay in Japan, these five Ethiopian partner company representatives and a LIDI

officer in charge also attended sessions, field works, and exercises in preparation for an exhibition at IFF.
Their visit program schedule was as follows:77Session 1 Brand system (lecture on 17 July, field works on 17 and 22 July)
DENTSU lectured on the importance and components of the brand system and introduced Harris
Tweed (England) and the Imabari towel (Japan) as examples of local product branding. In the lecture, it
was emphasized that every organization should understand specific methods for building and managing abrand system and its issues. In particular, with regard to the Imabari towel, a visit to a flagship shop in
Minami Aoyama (Tokyo) was arranged. During an IFF period, the board chairman of the Shikoku Towel
Manufacturer Association was invited to give a lecture on the association’s branding activities and system.
In the session, it was recommended that the goods should be wrapped together with Highland Leather brandtags.
One of the delegates commented: “Our realistic option for Ethiopian leather sector at this moment
is OEM production as we have not had any business connection and trading experience abroad. However
the clients hardly allow us to put our own brand on OEM products. In such circumstances, it must be
considered an effective strategy for the Highland Leather Brand."Session 2 Understanding the market (lecture and field work on 18th July)
Two professional staff members in the leather section at Senken Shinbun Company lectured on
overall trends in the Japanese fashion industry; market trends for leather items, including bags, accessories,and shoes; and key points in the success of Highland Leather in the Japanese market. He also provided theimportant aspects for the Ethiopian participants about the characteristics/needs of the Japanese market aswell as about product development/ improvement. After the lecture, they gave individual advice on the
products of their respective companies.
Thereafter, the delegates visited retailer outlets, department stores, and specialized stores in Ginza
and Yurakucho (both are famous shopping districts in Tokyo) to do market research. At the end of thissession, the delegates came to understand the Japanese leather product market by saying, “It was found to
become 2 poled segments in the Japanese market, one is the middle and high price range and the low pricerange. We are surprised to be very high quality even at the low price range, such as UNIQLO. There is highconsumer demand for quality in the Japanese market.”
Session 3 Display technique (lecture・・field work on 20, 22 through 24 July)
The day before the opening of IFF, once furniture and fixtures were set up in the stand, an exercise
was organized for the delegates to learn how to design a product display in such a manner as to effectively
communicate the values of the brand. A retail display design expert lectured on the components and role ofvisual merchandising (VM) techniques (e.g., grouping, colorizing, etc.) before the delegates displayed theirproducts.
At the conclusion of the exhibition, comments were received from the delegates, including: “I amvery impressed by the effect of VM, which attracted a lot of customers to the stand displayed in the theory
of VM” and “After seeing the impact of VM, I hope my staff should lean it for our product display.”78

Through his or her real-life experiences, each delegate was able to learn the significance of setting display
themes as well as the importance of VM.
Session 4 Business negotiation skills (lecture on 17 July, field work on 17 and 22 July)
A lecture on business negotiation and skills was arranged for the delegates to understand theJapanese way of business. To value customers’ trust and loyalty to the brand, the delegates were enlightenedon business practices in the Japanese market so as to properly attend to customers visiting the stand. A
lecturer from IFI 8 explained the Japanese characteristics (timekeeping practices, consumers’ attitudes
toward the brand and their purchase intentions, etc.) and points to keep in mind during business negotiationsin Japan. Following the lecture, a tour was organized for the delegates to visit and inspect the outlets of
those companies with which business negotiations would be arranged at IFF. Then, the delegates preparedpresentation materials for the negotiation.
In the wrap-up session after the exhibition and business negotiations with the Japanese buyers,
comments were received from the delegates, including: “I was very surprised at the too-much detailed
points and demands from the Japanese buyers” and “I have learned that it is necessary to prepare the strategy
to and the survey of the clients before we meet them. ”

4.7

Support for trades with buyers

4.7.1

Measures to promote trades with buyers
Following the results of IFF, the Japanese expert team continued to help to promote trades between

the partner companies and buyers.
(1) Received 60 orders of shopping bag and snood
Shopping bags and snoods displayed at IFF were sold at its marketing events in November 2015
(in Tokyo, Osaka, and Hiroshima) by Company E, a consulting company that offers tips for color
coordination to corporate entities as well as to individuals. Sixty orders were placed. An Ethiopian company
needed to procure a small lot of leather materials, but it took a long time to negotiate with a tanner due tothe small-lot procurement. The delivered products received favorable comments; however, a staff member
in Company E pointed out the mistakes of cutting in some delivered products.

8

Acronym standing for institute for the fashion industries79(2) Received orders of 600 pairs of flat shoes
An Ethiopian company received an order for 600 pairs of flat shoes from Company F, which
operates 50 outlet stores across Japan, selling ethnic goods. Initially, a delivery was to be made in midSeptember; nevertheless, due to the power cut at a factory in Ethiopia and the resulting disruption of the
production schedule, problems related to funds’ transfer from Japan, as well as air transportation delays toJapan, the ordered products were delivered in mid-October. After the delivery, the Japanese experts received
a report on the defects of the shoes from Company F, saying that the “left and right shoe had a different
design,” “some delivered shoes were filthy”, and “purchased shoes were broken soon after a customer
started to use.” In each case, the Ethiopian company re-delivered the replacement. Consequently, thecompany took an additional order of 600 shoes in April 2016.

Figure 4-8 Examples of defects of delivered items

3
Satisfied
Basically satisfied

20

Comments:-Leather material seems soft and I felt like
affectionate. Indeed, it was very soft and smoothto the touch. Color was beautiful too.
-Quality that I’ve never experienced.
-Recommended shoes were very comfortable.
-Kawaii, easy to use, foot comfort-I immediately decided to buy this shoes after I
tried to wear.

Figure 4-9 Satisfaction with the product80

2Have a positive
image

4

Have somewhat
positive image
No opinion

17

Comments:[Have a positive image]-I’ve never seen such soft and softly coloredleather in Japan.
-Very good quality.
-Fashionable logo and tag. It is like fair trade
product.
-The best quality sheep leather.
-I think it is good idea to create a product made of
local sheep skin by local people.
[No opinion]-This is the first time to buy EHL brand, so I don’tknow whether it is durable or not.

Figure 4-10 Image of Ethiopian Highland Leather brand

2

13

Changed a lot

8

Changed in apositive way
No change

Comments:-Ethiopia is a country manufacturing something
good products.
-I was surprised at these lovely products.
-Ethiopia became familiar to me.
-I haven’t thought of Ethiopia but I understood thecountry has amazing assets.
-I didn’t know about this kind of leather.
-I only knew Abebe Bikila, Olympic marathon
champion, before coming here.

Figure 4-11 Change in image after purchased Ethiopian products(3) Received orders of 750 pairs of gloves
An Ethiopian company received a small lot order for products in stock by Company G in October
2015. Company G provides product planning and selling to brands and retail stores in Japan. In November
2015, the person in charge at this company visited the Ethiopian company at the time of his business trip to
Italy. The Ethiopian company also received inquiries from two department stores about ladies’ gloves, but
no specific business deal was concluded. Glove is main product of the Ethiopian company; therefore, thecompany is used to dealing with inquiries quickly. Also, the leather price remains at a stable price level.
Although the Japanese company was not frustrated with the deal, 5% of the delivered products werereturned to the Ethiopian company due to the problems of the size and quality of the material.

81

(4) Moccasin shoes: consideration → declined to order
An Ethiopian company received a sample order of moccasin shoes from Company I and wasinterested in the moccasins displayed at the exhibition. The sample enjoyed a good reputation as being
comfortable shoes. However, the problem with the adhesion strength of the insoles became clear, andCompany I declined to order the shoes. In other cases, Ethiopian companies could not receive orders dueto their low-quality samples.
(5) Leather materials
Ethiopian companies received inquiries about the leather material, but only a few companies wereable to start trading with Japanese companies. There were obstacles; for example, Ethiopian tanners set the
MOQ, and they sell leather materials in a mixture of various grades from 1 to 5 in packages. Particularly,
apparel manufacturers and department stores express a strong desire to buy only the highest-quality leather
materials.

4.8

Promotional activities of CPA

4.8.1

Promotional activities in Japan
In the CPA Phase 2, the Japanese experts transmitted the information on the CPA’s activities tomedia in collaboration with the JICA public relations department, taking advantage of a great opportunity
to display at the exhibition and to visit Japan. As a result of the active public relations campaign, the CPA’s
efforts attracted paper media (Asahi Shimbun newspaper, Nikkei Sangyo Shimbun newspaper, etc.) andbroadcast media (BS-TBS, JWAVE, etc.), which contributed to gaining a wider recognition of European
Highland Leather in Japan.

4.8.2

Promotional activities in Ethiopia(1) United States–Africa business summit (“Doing Business in Ethiopia”)
In February 2016, in the “Doing Business in Ethiopia” session at the United States–Africa
Business Summit that convened in Addis Ababa, champion product approach initiatives were taken up as
an example of the export promotion measures being undertaken in Ethiopia. Ethiopian Highland Leather
products launched in Japan were displayed at the summit venue for visitors.
(2) Meeting with minister of foreign affairs of Ethiopia
In February 2016, a meeting was held with Dr. Tedros, Minister of Foreign Affairs, and champion
product approach initiatives were explained to the minister. The meeting was uploaded as a news event to
the website of the Ministry of Foreign Affairs of Ethiopia. The minister posted a tweet on his Twitter
account about the “Creativity in Motion” brand video.

82

4.9

Setting up a structure for brand maintenance and management

4.9.1

Workshop for brand operational management
A two-day “brand operational management workshop” was organized in Addis Ababa in

September 2015 for the partner companies and the pertinent organizations. The workshop was designed toencourage the partner companies and the pertinent organizations to launch brand management. Specifically,presentations and discussions were focused on the following three issues: “ways to control the quality,”“ways to launch a brand in the world,” and “actions for next steps.”
On Day 1, participants were invited to put down in their own words their ideas about the selection
standard of a tannery, quality control (testing), symbolic products, and symbolic promotion in respective
formats prepared by a Japanese expert before they had discussions in groups. In the discussion about quality
control, some comments were given such as: “This is not realistic and too strict is,” “This is too loose. The
brand of premium properties cannot be maintained,” “Cumbersome test up to this point is unbearable to theboth sides of test provider and receiver,” and” It cannot be a convincing quality assurance in this degree ofa test.”On Day 2, representatives of ELIA and partner companies gave a presentation on quality control
methods and media strategies for the representatives of EIC, LIDI, and JICA to encourage the privatecompanies to take the leadership of the brand management. In the presentation, presenters expressed theirintention to address the quality management and public relations campaign (see Table 4-16).

83

Table 4-16 Resolution for brand management – four items
Selection
Standard
For
Tannery

Quality
Control
Testing

Symbolic
Product

Symbolic
Promotion‘Input’ criteria

Ethiopian Highland Leather is produced in specified areas 3000m and above, such as Gojjam, Gonder, Tigray, Sellale, Jimma,
Wollega, etc.
・It is produced from unique species of sheep: “hair sheep,” not“wool sheep” or “blackhead,” to maintain a soft, fine grain, thin,
yet strong quality.

Process’ criteria

Ethiopian Highland Leather should be produced by tanneries in
Ethiopia with the capacity to process finished leather.
Ethiopian Highland Leather goes through physical and chemical
tests conducted by the Ethiopian government (LIDI) to guarantee
its softness and durability.
Its process is certified by ISO (International Organization forStandardization) 9001, which requires an operation system with adesignated level of skill and technology.
It is also certified by ISO 14001, which requires environmental
friendliness.

Output’ criteria

Ethiopian Highland Leather is high-quality leather whose grade
ranges from 1 to 5.

Name of the test

Certification test

Testing objective

Quality assurance of tanneries

Test method

・Physical test (strength, softness, safety, durability, etc.)
・Chemical test (banned chemicals, etc.)
・Process inspection

Sampling method

LIDI goes to tanneries for inspection

Whom (to betested)Tanneries (which finish the leather)Who (to test it)

LIDI

When (timing &frequency)

Once every year

Where (venue)

At tanneries

We will develop unique/symbolic products to express the uniqueness of Ethiopian
Highland Leather
Product Idea:
Glove with elegance, glove with sports function,
Jacket and skirt with sensible touch against skin,
Baby shoes not to ruin baby’s delicate skin,
Lady’s bag with no accessories but great materials with contemporary color design
We will deliver the brand message at trade shows, storefronts, events, posters,
magazines, or any types of media to establish this brand.
Advertisement Idea:
Trade show at Addis Ababa, Milan, Paris, Hong Kong, Shanghai, Tokyo, etc.
Posters at tanneries, leather goods shop, airports, touristic places, embassies,
government organizations, and customers around the world
Sponsoring event such as an international leather exhibition

84

The presentation featured not only what had been achieved so far, i.e., the “brand video” and“brand book,” but also the “brand vision.” By doing so, it was possible for both the audience (thegovernment) and the presenter (industry organizations) to see the brand’s potential. In particular, as a “brandvision,” the so-called “double-name tag” potential was submitted. In other words, the vision draws a picture
where the Ethiopian Highland Leather brand tag would be put on the product with the tag of an
American/European top brand, i.e., double-name tag. In the future, when the brand will have achieved asufficient level of recognition and status, American/European brands may compete against one another inan effort to promote Ethiopian Highland Leather as proof of a top-notch product. The participants fully
understood that efforts were required to maintain and manage the brand and to keep moving toward that
goal.

4.9.2

Clarification of the stakeholders’ roles
EIC, ELIA, LIDI, and EIPO discussed the question of what duties and responsibilities should bedischarged in the framework of Ethiopian Highland Leather brand management. The roles of ELIA, LIDI,
and EIPO were marshalled regarding (1) what each organization’s mission is; (2) what skills are necessary
to fulfill the mission; and (3) what the necessary capacity is. The heads of three organizations – LIDI, ELIA,and EIPO – agreed about the brand management structure on the next day of the workshop through meetings
to confirm the particular roles of each organization.
ELIA
As an industry association, its primary mission should be to lead a brand (=mission), but theassociation has only four people (=capacity). The association has difficulty with coming together as acollective (=skills) because it is a collective entity of private companies. Therefore, ELIA will take theinitiative with support from LIDI.
LIDI
Originally, as a research institution involved in the development of the leather industry, LIDI is ina position (=mission) to support brand management. However, LIDI’s objective is primarily to "research"
on quality and process (=skills), not covering human resource development, to lead brand activities(capacity). LIDI will assist ELIA, and LIDI should become a laboratory mainly in charge of quality
management.
EIPO
EIPO is a government office that manages intellectual property. It took the initiative to lead abrand (=mission) only for Ethiopia coffee. As an executive body to support legal proceedings, it has noknowledge and skill to work in quality control and promotion with leather. Also, EIPO cannot afford to put
any new responsible staff in this sector (=capacity).EIPO should focus exclusively on the execution of85

legal procedures for the brand. A process for trademark registration was designed in such a way that an
application for registration should be submitted by ELIA, whereas registration should be processed by EIPO.
As for a process for authorizing the use of the brand logo, it was agreed that LIDI should look into thequality control standard and that only those with a recommendation prepared by LIDI as a result of its
investigation should be authorized by EIPO.
EIC
EIC is going to be the sole organ to control and manage horizontal branding in Ethiopia not for
specific sectors but for all sectors. All branding management should be handled with each sector’s
stakeholders. EIC can support general Web content management on the branding and expansion of the CPA
to other sectors. EIC should not be involved in the Ethiopian Highland Leather brand itself and should
instead engage in Web content management as a “Creativity in Motion” brand manager.
The brand management operating structure agreed upon is shown in Figure 4-28.
Table 4-17 Ethiopian Highland Leather brand management structure
Organization
Ethiopian Investment
Commission (EIC)

Roles
manager in charge of overall
CPA activities

Main duty
Web content management

Ethiopian Leather
Industries
Association (ELIA)

brand ownerchair a regular meeting ofbrand stakeholders
with assistance from
LIDI
plan and carry out brandpromotion activities

Ethiopian Leather
Industry
Development
Institute (LIDI)

brand supporterset down the brand quality
standards, and checkassistance in planning andimplementation of brandpromotion activities

selection and recruitment of a brand manager
initial tasks (i.e., trademark registration, rules
on organization and operation)
trademark/logo design management, legal
matters
facilitate discussion at a meeting ofstakeholders
plan and carry out brand promotion activities
selection and recruitment of a quality control
manager
initial tasks (i.e., set down the inspection
methodology)
selection of accredited tanneries, inspection
implementation process management

Ethiopian Intellectual
Property Office(EIPO)

brand approver
register trademarks as well
as authorize such trademark
registrationin accordance with LIDI
recommendation
authorize new tanneries to
use the brand logo.

selection and recruitment of a person in chargeof trademark registration／licensing
undertake legal procedures in relation to
trademark and logo

86

4.10

Consideration of issues identified in the interim wrap
An interim wrap-up meeting was held in February 2016 with Ethiopian stakeholders. In themeeting, issues were identified during and after the exhibition in Japan as those that became apparent during
subsequent continuous business negotiations, and solutions to these issues were considered. They are shownin the flow of the leather industry value chain (see Figure 4-12).

87

Upper stream
Value Chain

Raw skin production
Stockbreeding

Downstream

Midstream
Slaughtering

Raw skingathering anddistribution

Foreign market（Whole seller,
maker ）

exportTanning

domestic

Foreign market（Whole seller,
retailer）

Domestic leather
manufacturers

Foreign market（Consumer）

Lack of productmanagement
Inappropriate
distribution andpreservation way

Inappropriate brandmanagement

Problems

Low supply of raw
skin
Inappropriate livestock
management

Parasite /skindiseaseA few high quality
leather in domestic
market & large MOQ

Low yield ratio（average quality is low）

Inappropriate
slaughtering way

Lack of productmanagement
Lack of technic ofworkers
Low quality products
and large MOQ

Lack of taning technic

Inappropriate branding
and marketing

Low unit price andsmall amountLow business skill

Break terms andconditions

Delay of delivery

Figure 4-12 Leather sector value chain in Ethiopia and the problems

88

Low brand value ininternational market

These issues were discussed in view of four points, i.e., branding, quality control,
minimum lot, and delivery date, with possible solutions among Japanese experts and theparticipants. They are summarized below.
Branding-related issues and solutions
Currently, the price of sheep leather produced in Ethiopia is 20%–30% higher than theunit price of those produced in Bangladesh, Indonesia, and China and exported to Japan. Given
the yield loss due to the sale of a package, it stands more or less on par with the ones producedin Spain or Italy concerning price. On the other hand, the market price for the final product isusually 300-400% of its cost price on FOB. Given the price on FOB indicated by Ethiopian
companies, and because a large amount of leather is used especially in fashion items, those items
command exceptionally high prices.
The gap between supply and demand became apparent, as what the Japanese side wants
is “supply of product with brand equity at a reasonable price,” whereas what is to be supplied by
the Ethiopian side is “a branded product with no brand equity at a relatively high price.”
In the face of these issues, short-term measures were provided, including:(1) development of new items by companies with more efficient use of leather;(2)-(4) brand promotion mainly by manufacturer organizations, competitive price, andcompetitive sales package.
Medium- to long-term measures:(5) collaboration with Japanese manufacturer organizations;(6) the need to tackle parasites and skin diseases in the upstream in the value chain under
the initiative of the MLF.
Table 4-18 Solutions to branding-related issues
Actions

Responsibility
Producers Govern
Company Association
ment

Short term

1

DEVELOP NEW ITEMS (cost-value-efficient item)

★

-

○
LIDI

2

PROMOTE THE BRAND to differentiate from low-priceproducts

○

★

3

COMPETITIVE PRICE of finished leather.

○

★

○

★

4

Middleand long
term

COMPETITIVE SALES PACKAGE.

5COLLABORATE WITH JAPANESE PRODUCERS ASSOCIATIONS(e.g. Invite them to Ethiopia under cooperation with MOFA.
Participate in Tokyo Leather Fair)

-

★

6

TACKLE PARASITES AND SKIN DISEASES and give technicalsupport for slaughter to make raw skin’s quality better.

-

-

89

○

MOFA
/ MOT

○

LIDI

○

LIDI

○

MOFA
/MOT

★

MOA

Quality control–related issues and solutions
The Japanese quality standard is more rigorous than those in the United States andEurope. In particular, a high level of fastness is required for leather products. In this latest
initiative, there have been cases in which the Ethiopian side fails to appreciate the robust quality
standard upheld in Japan and submits poor-quality samples, thus resulting in a breakdown ofbusiness negotiations. Even samples that did not line up with orders placed by Japan with respect
to color and/or size were delivered, reflecting the lack of an appropriate management structureon the Ethiopian side. These incidents involving the low quality of samples and/or mistakes inprocessing orders for a few samples ended up raising deeper concerns about the quality control
and product inspection procedures undertaken by Ethiopian companies. Low levels of productdesign attributable to Ethiopian companies’ low levels of exposure to overseas markets, and thelow quality of accessories available in Ethiopia were also considered problematic. The gap
between supply and demand became apparent: Japanese companies want “high quality andstability,” whereas the samples provided by Ethiopian companies prove to be “low quality.”
For these issues, short-term measures were shown:(1) understanding by companies of the level of quality required by Japanese market
participants;(2) mobilize manufacturer organizations to bring in new companies;(3) launch of a pre-delivery product inspection structure through government–industry–
private sector cooperation.
Medium- to long-term measures include:(4) improve the design and technique in the whole industry through industry-government
cooperation; and(5) encourage inward investment in Ethiopia by overseas businesses to improve thequality of accessories available within Ethiopia.
With regard to (4), it was noted that Ethiopian Competitiveness Facility (ECF) provides
funding for inviting engineers based on recommendations by the respective companies, and theneed to involve ECF was discussed.
As for (5), the need to involve Ministry of Foreign Affairs (MOFA) and EIC was also
discussed.

90

Table 4-19 Solutions to quality control–related issues
Actions

Responsibility
Producers Govern
Company Association
ment

Short term

UNDERSTAND JAPANESE QUALITY REQUIREMENETS(manufacturing, design, quality control) in real deals.

★

○

CERTIFY NEW COMPANIES in line with the quality assuranceof EHL brand.

-

★

3

DO PRE-DELIVERY INSPECTION (PDI).

★

★

4

IMPROVE DESIGN AND TECHNIC in the whole leather
industry. (e.g. collaboration with Ethiopian Competitiveness
Facility)-★

ATTRACT FOREIGN INVESTMENT to Ethiopia for technology
transfer in the field of material/accessory/design

-

1

2

Middle andlong term

5

Execution

○

LIDI

○

LIDI
LIDI

★

Guideline

○

★

LIDI

★

MOFA/
EIC

Minimum order quantity–related issues and solutions
Compared to the United States and European markets, Japanese markets impose rigorous
quality requirements. Due to Japan’s great market diversity, usually a product is ordered in small
volumes and needs to come in multiple colors and sizes. A total of 1000 sq ft of leather materials
coming in a few colors would be ordered. Regarding a final product, as few as 100 items per
product version may be ordered. On the contrary, the MOQ set by Ethiopian tanners is 3,0005,000 sq ft per color. In the distribution network within the Ethiopia, leather materials are known
for their high MOQ, and the chance of overstocking inventory is among the reasons for
manufacturers to set a high price. The gap between supply and demand becomes apparent:
Japanese companies want to “trade in smaller volumes,” whereas Ethiopian companies are unable
to accommodate the needs of their Japanese counterparts.
Short-term measures:(1)-(2)development of flagship products by companies (consolidate orders from multiple
companies into one and thereby reduce the chance of overstocking inventory)(3) tanners’ and manufacturers’ cooperation to reduce MOQ requirement, to be facilitatedby manufacturer organizations.
As with solutions to branding-related issues, (4) the need to tackle parasites and skindiseases in the upstream in the value chain under the initiative of the ministry of agriculture wasdiscussed as a medium- to long-term measure.

91

Table 4-20 Solutions to minimum order quantity–related issues
Actions

Responsibility
Producers Govern
Company Association
ment

Short term

Middle andlong term

1

DEVELOP BUSINESS TEMPLATES for smooth communication
with buyers.

-

★

-

2

FIND AND SUPPORT AN AGENT which can mediate between
both countries’ companies (e.g. as a subsidiary of ELIA).

○

★

-

3

STRENGTHEN A ROLE OF THE EMBASSY IN JAPAN (e.g.
Japanese market research, dealing support)

-

○

4

IMPLEMENT KAIZEN in partner companies to establish
smooth internal communication.

○

-

5

SIMPLIFY IMPORT/EXPORT PROCEDURES

-

○

★

MOFA

★
MOI
/LIDI

★

EIC(MOT)

Delivery date–related issues and solutions
The delivery date must be respected beyond Japanese markets, and swift actions are
required in response to orders or inquiries from customers. Ethiopian tanners and manufacturers
were behind schedule by one to two months to process orders for samples and missed the requireddelivery date. They disregard the fact that they are in the grip of frequent power cuts when theycome up with timetables, which may be one of the factors. There have been cases where inaccurate
or incomplete documentation to declare shipment to customs authorities results in a further delay
in delivery. It often happens that inquiries – especially those in the wake of troubles – would not
be processed promptly. These issues are not limited to Ethiopia: Many Japanese companies haveindicated that, given their previous experiences, they would not – or wish not to – be involved
directly in trade.
Against these issues, short-term measures were given as follows:(1) creation of business templates by manufacturer organizations;(2) efforts to be made by manufacturer organizations to find and support trading agents;(3) the need to increase the role of the Embassy of Japan in Ethiopia in making a market
survey and in facilitating trade.
Medium- to long-term measures include:(4) implementation of Kaizen by partner companies, to be facilitated by LIDI and MOI;
(5) the need to streamline import/export procedures across the government by EIC and MOT.

92

Table 4-21 Solution to delivery date–related issues
Actions

Responsibility
Producers Govern
Company Association
ment

Short term

1

DEVELOP AND PROMOTE A ‘SIGNATURE ITEM’

★

-

2

DIVERSE THE SIGNATURE ITEM VARIATION (color/size/motif
variation)

★

-

3

TANNERIES-MANUFACTURERS COOPERATION (mutual
inventory risk taking by long-term/consistent commitment)

-

★

4

REDUCE LOW GRADE SKINS by tackling parasites/skindiseases and giving technical support for slaughter

-

-

○
LIDI

-

Middle andlong term

93

★
MOA

Chapter 5

Activities in the Leather Sector– Actions after the Interim Wrap-Up(Feb. 2016 – Nov. 2016)

96

Activities in the Leather Sector – Actions after theInterim Wrap-Up (Feb. 2016 – Nov. 2016)
At the January 2016 interim wrap-up meeting, many issues were raised with regard to
this project as well as the immediate need to address these issues. After meetings with the
Ethiopian stakeholders, additional actions in response to the issues were summarized (see below).
Table 5-1 Activities after the interim wrap-up
Actions
Specific activities
Support for product development and quality improvement
Action 1: Understanding of the quality required by Japanese market
Action 2: Initiative to improve design and technology(1) Produce a product sample in Ethiopia
Action 3: New product development (2) Technical support based on business negotiations(3) Support for product development toward exhibition in Japan
Action 4: Development of flagship products
Action 5: Initiative for implementation of pre-delivery product inspection
Display at the Exhibition and Other Promotional Activities(1) Display of Products at the exhibition in Japan
Action 6: Brand Promotion(2) Brand promotional activities by ELIA
(3) Other promotional activities in Japan(4) Evaluation of effects of brand promotional activities in Japan

Action 7:

Creation of business templates

Action 8:

Increase in the role of the Embassy of Ethiopia in Japan and MOFA

Visit to Japan in April 2016
(1) Visit to Shikoku Towel Industrial Association
Action 9: Cooperation withJapanese industry association(2) Visit to Japan Glove Industrial Association(3) Visit to inspection company

Research on Structural Problems in the Ethiopian Leather Sector
Action 10: Strengthening of competitiveness by reducing order quantities
Action 11: Promotion of cooperation between tanners and manufacturers
Action 12: Initiative to deal with issues in the upstream of the value chains
Action 13: Improvement in the quality of leather materials and yield rate
Building of Brand System
Action 14: Operation of accreditation system
Efforts for Other Issues
Action 15: Activities to encourage inward investment in Ethiopia by foreign companies
Action 16: Introduction of Kaizen activities
Action 17: Streamlining of import/export procedures

97

These activities were carried out from February 2016 as follows.

5.1

Support for product development and quality improvement

5.1.1

Action 1: Understanding of the quality required by the Japanese market
Due to language barriers, cultural differences in business, and, above all, differences inperception of the quality of products, CPA partner companies often failed to understand therequests of buyers who had been exposed to CPA products from Ethiopia. As a result, there weremany cases in which no proper action was taken in response to inquiries from Japan and an
opportunity to enter a trade agreement was missed. In order to avoid such mishaps, Japaneseexperts provided assistance to the trading partner companies and escorted Japanese companies
during their stay in Ethiopia.
Following the product display at IFF in April 2016, several Japanese companies
requested that the Ethiopian companies produced samples. Japanese experts dealt with questions
from the respective companies and provided technical assistance in production of samples.
When focal persons from these companies visited Ethiopia, Japanese experts introduced
them to their respective partner companies. Every tanner had management staff to take care ofcustomers, yet in many of these tanners, the management had little product understanding, and it
had seemed that they more often than not are unable to furnish sufficient explanations tocustomers. When this happens, there would be differences between what Japanese side asked tothe management staff and the interpretation of the orders by production staff.
These cases indicate the need for a clear, sharp line defining to what extent a public actor(i.e., JICA) can take responsibility over the business trade among private actors.

5.1.2

Action 2: Initiative to improve design and technology
The question of whether or not the brand can be maintained in the future depends on thequestion of whether or not the partner companies are capable of acquiring technical capabilities
to maintain brand equity, which then depends on whether or not they could acquire the adequate
skills to meet the brand equity requirements. Currently, the partner companies’ skills of
production and design are trailing behind those in the developed brand, and support activities arenecessary to continuously improve designs and skills. The Japanese experts assisted the partnercompanies in product development and conducted a survey on LIDI capabilities with a focus on
putting a sustainable support system in place.
In order to ascertain capabilities of LIDI, interviews were conducted with designers fromthe Product Development Centre (PDC), staff from the Leather Technology Directorate, and staff
from the Consultancy Directorate, all of whom belong to LIDI.

98

Shoes PDC
Staffing:
The center has four designers, one pattern maker, one sample maker, and threeresearchers.
Responsibilities:
1. Upon receipt of a design from a customer company, a sample is made and the materials
required are identified. These projects incur costs, including: 350 ETB for making adesign from a sketch and 150 ETB for making a pattern from the design. Half of thecost is borne by LIDI. A design prepared by a PDC designer requires the same amount.
2. Download a design sample.
3. The design prepared in 2 above is displayed at the annual exhibition named All African
Leather Fair and is also placed in the magazine published by PDC three times a year,
inviting the respective companies to make use of it. A total of 350 companies use PDC
services.
Issues of concern:
There is a shortage of equipment and materials (shoe tree, accessories, etc.). There isa lack of opportunities for staff to visit overseas markets to see the latest trends,
understand the level of quality required, and polish their own designs and improve thequality of their products. During the survey period, the staff raised the question of how
they should make a new product with a new concept and a new design when they canrefer only to what is available online. Lack of skills to process the CAD data is also an
issue (although they do have a software called “shoe master”). Domestic-user
companies say that there is nothing new released designs/products and that they are
therefore not interested in it.
Bag & Garment PDC
Staffing:
The center has five designers, who all draw designs and patterns and make samples.
Responsibilities:
1． Make patterns and samples based on designs, provide these designs, patterns, andsamples to the respective companies, provide training to the respective companies
2． Samples made by these designers as products targeting overseas markets are displayedat All African Leather Fair. Yet, majority of companies make use of designs offered asones targeted at domestic markets. Each of these designers draws 30 designs per annum(more or less). Costs to be incurred from preparation of samples and patterns and fromconsultation services would be less than 900 ETB at a maximum.

99

Issues of concern:
Accessories compatible with the designs are not available. Efforts to draw designs areoften wasted since they are obligated to change designs due to a lack of accessories.
They wish to keep reflecting the Ethiopian culture in their designs. For this purpose,
they want have a chance to receive short- to medium-term design training, display theirwork at overseas exhibitions, and visit overseas exhibitions. To date, except for during
their stay in India for study, they have never visited any overseas exhibition.
Leather Technology Directorate
Staffing:
The directorate has 42 staff members: nine of them with master’s degrees and one witha doctorate degree. The company has the Product D&R Team, Education Team,
Industrial Consulting Team, Business Development Team, and Facility Management
Team. Responsibilities are distributed among these teams.
Responsibilities:
At the affiliated research and development lab, companies can conduct R&D activities
by paying the actual costs. At the rate of about twice per week, requests are received
from companies. No complaint has been filed to date; yet, according to the interviewees,
the staff lack skills and knowledge. In particular, substantial improvements are requiredin the area of production (e.g., chrome free, vegetable tanning, etc.). An Italian company
used the LIDI facility to develop products with the use of chemicals of its making. Basedon the outcome of its endeavor, this Italian company has been transferring its technology
and concurrently selling its chemicals to individual Ethiopian companies. In addition to
the research and development lab, the directorate has a testing lab, where up to 3,600
requests for product testing are annually received from companies.
Issues of concern:
The staff believe there is a need to increase the precision of test results by comparing
the result for every test item with that of overseas institutes. As for the methods formaintenance, trouble-shooting, and for equipment use, they feel training is required.
Consultancy Directorate
Staffing:
The directorate has seven staff members.
Responsibilities:
They work as consultants and provide consulting services to up to 25 mostly SME
companies. Start-up consultants undergo OJT with Indian experts for two to three months.

100Issues of concern:
Although these companies expect them to be highly equipped with the skills of IT
solutions, inventory control, garment design, glove design and production, they areaware that they lack such skills and knowledge. An interview with a company which
received consulting services from Consultancy Directorate: Two engineer-designers
were sent to a company for a year to provide training. The Japanese experts visited thiscompany and interviewed them about the quality of training provided. Although they
were highly satisfied with LIDI services, the company recognized the need for a welldeveloped design training program.
LIDI does not have separate staff in charge of design or production management support.
It seems that the bottom line is to “make what you design.” Division of labor is a concept appliedin companies, and organizations providing training to these companies may as well adopt thisconcept. If you are in charge of both design and production, you will most likely come up with adesign which can be easily translated into a product. Given that most of LIDI staff in charge oftechnical guidance are Indian experts, concerns were raised that these experts might have lacking
experience in designing for American and European markets. Flat pattern cutting is generally
applied in India and this method is thought unsuitable for leather jackets and similar items.
There being few if any opportunities to be exposed to overseas markets is also an issue.
For example, you can see online photos of a particular product yet you can learn what is goodabout this product or what makes this product distinguished from others only by seeing andtouching it. This is an issue which concerns not only LIDI staff but also Ethiopian designers andcraft workers across the board.

5.1.3

Action 3: New product development(1)

Creation of product samples in Ethiopia
The Japanese experts stayed in Ethiopia from June–July and August–-September 2016 for

two weeks per trip and provided technical assistance to create product samples based on a requestfrom each local company. Some Japanese companies requested the Ethiopian companies to makesamples and patterns for reference; however, staff of the local companies could not understand theconcepts of the Japanese side. In response to that, the Japanese experts explained the Japanesecompany’s intention. Also, the experts provided advisory services for the improvement of the first
product samples in terms of the sewing quality and consistency of patterns.
(2)Technical assistance based on business negotiations with the company
Following the first product display at IFF in April 2016, multiple business negotiations

have been ongoing between Ethiopian partner companies and Japanese buyers, and these101

negotiations will run until the end of CPA Phase 2 in March 2017. Many of these negotiations
have reached a round where sample preparation is being negotiated or post-sample-delivery
negotiations are under way. In the meantime, Japanese experts have gone between the two sides
by email and by phone to coordinate their schedule, have been to Ethiopia twice, and have also
provided technical guidance to Ethiopian companies undergoing business negotiations. Again, it
has become apparent that, while high levels of technical prowess are required by Japanese market
participants, levels of production management at Ethiopian companies are still low. Specificexamples are shown below.
1）） Company A
An order for shoe samples was placed by a retail company at IFF in 2016 on theassumption that an order for final products would follow. Company A employs four designers:
Two are mid-level employees who have been with the company for eight years, and the other two
are newer employees who joined the company four years ago. The two mid-level employees weretrained by a German expert for half of a year after they joined the company. One of the two newer
employees was sent to a factory in China for a year. Their supervisor (design department manager)
is on par in knowledge and experience with these four designers and does not have any skills toteach people working under him.
Following the product display at IFF, in order to finalize the product samples as per order,
Japanese experts visited the factory for three days, and they were unable to overcome technicalissues. Eight years is long enough to master the skills necessary to manufacture shoes, which does
not require expertise. Yet, a lack of human resources for providing technical guidance to peers
and a lack of access to high quality products have hampered the company’s progression to thenext level. EKI has introduced Kaizen to Company A, but this has not yet resulted in actual
improvement in product quality.
2）） Company B
Company B received an order from a Japanese company with which they had been inbusiness negotiations since 2015. At the latest exhibition, Company B received a request for
samples from two other Japanese companies. Although Chinese experts are involved in productdevelopment onsite, a new employee who joined the company only two years ago, fresh out ofschool, is in charge of line management and product control. There has been no professional
guidance and training on production and development. Eventually Company B managed toprepare samples with a quality level satisfactory to the Japanese companies; however, productfailure was found following the delivery and they need to take actions to remedy this.
As seen in these examples, problems facing individual Ethiopian companies stem from alack of human resources and limited opportunities to receive proper training. New employees

102traditionally can learn from senior employees with knowledge and experience to gain skills anddeepen their knowledge. However, even those companies which have been selected as partnercompanies do not have “senior” employees equipped with professional education and skills. Somecompanies employ foreign technical experts – yet a majority of those nonlocal experts are fromemerging nations and hardly understand the quality standards required on developed markets. It
seems that this is a prevailing issue across the Ethiopian apparel business.
(3)

Assistance in product development for exhibition in Japan
In preparation for the latest product display at IFF, attention was paid to the cultures of

the respective companies in assisting them in a wide range of areas from offering design templates
to the technical guidance necessary for putting final touches on samples. At the previous
exhibition, it became apparent that final products would be accepted highly in Japanese markets.
Therefore, new suggestions were made not only in respect of these companies’ primary products
but also about new products that could be developed by applying the skills these companies
already possessed. The goal of the display was to showcase a new and wide variety of products.
As a result, seven manufacturers completed 27 kinds of samples, as opposed to the previous
display of 10 types of samples by five manufacturers.

5.1.4

Action 4: Development of flagship products
In order to reduce excess inventory, it is recommended that several companies cooperate

to combines orders and to develop flagship products. For this purpose product development efforts
were undertaken between the respective companies and Japanese experts in preparation for IFF.
The respective companies gave consideration to the possible amount of hide available tothem and developed nearly 30 kinds of products. A few orders for samples were placed for someof these products. At the same time, Japanese companies mentioned that, from the viewpoint ofdifferentiating themselves from others, a product that anyone can handle would not be attractive.
The question is whether or not any of these “developed products” can establish themselves as“flagship products,” and it would take some time to see the market performance of these products
before a conclusion can be drawn.
Given Ethiopian companies’ sense of design, in order to demonstrate their technicalprowess to offer original equipment manufacturer (OEM) production services on a sustainable basis,a proposal should be made about getting orders from Japanese companies for samples on customer
specifications

103

5.1.5 Action 5: Initiative for implementation of pre-delivery productinspection
To maintain the brand equity, efforts need to be made to make the pre-shipment productinspection more rigorous and to decrease the percentage of defective products. With the aim toencourage implementation of the pre-delivery product inspection within the Ethiopia, discussions
were held between LIDI and Japanese experts.
During their stay in Ethiopia, Japanese experts had a series of discussions with LIDI staff
in charge of the matter. These discussions focused on two issues: what this “pre-delivery productinspection” should be and on what criteria a product inspection should be conducted in the casewhere no clear requirements are set by customers? It was difficult to make LIDI staff understandthe concept of “the level of quality required by market participants.”
In the Ethiopia, there is no company offering product inspection services to inspect final
products. European and American companies usually do not request a third-party productinspection, but such inspections have been a requirement in the past. On the other hand, when it
comes to leather materials, there are experts who professionally conduct product inspections.
Back when Japanese tanners still imported pickled leather and other types of leather materials,
they were involved in the product inspection of these materials. Still, they exercised quality
control prior to these materials being exported overseas. According to one of these productinspectors, a lack of a “unified” grading system among individual tanners is, in itself, a significant
problem. Previously, the Ethiopian Standard Institute randomly would pick a specimen andinspect it prior to export before issuing a certificate. No such procedures are currently undertaken.

5.2

Display at the exhibition and other promotional activities

5.2.1

Action 6: Brand promotion(1)

Display at the exhibition in Japan

1) Selection of partner companies
New products were developed for the purposes of displaying them at an exhibition in
Japan (the IFF in April 2016) as well as meeting requirements for improvement to be submitted
by Japanese buyers during subsequent trades. In the selection process, the companies which
attended a design workshop with Japanese experts (at Harmony Hotel in Addis Ababa) as part ofthis survey were asked to develop and submit new product samples within a set deadline. Theirproduct quality, production capacity, and their visions for their futures as companies were
evaluated. As a result, the companies listed below were selected as IFF participating partnercompanies and were approved by LIDI and ELIA.

104

1) Pittards Products Manufacturing (gloves, garment, bags/fancy goods)
2) Modern Zege (shoes, bags/fancy goods)
3) Kinaff Leather (garments, bags/fancy goods)
4) Ayni’s Design (bags/fancy goods)
5) ELICO Awash Tannery/Fontanina Shoe (leather materials, shoes)7) Sheba Leather (shoes)8) AB Leather (bags)9) Hafde Tannery (leather materials)
10) Bahirdar Tannery (leather materials)
2) Product display at IFF
JFW–IFF in April 2016 was held from April 26–28, 2016, in the West Exhibition Hall at
the Tokyo Big Site. During the exhibition, more than 10,000 people in total visited the stands set
up by approximately 430 exhibitor companies. Here the Ethiopian Highland Leather brand had an
opportunity to have “individual” business negotiations with five Japanese companies. Moreover,the brand had business negotiations with approximately 190 companies in its stand. An “individual
business negotiation” is a service offered by the IFF organizer, which allows companies selected(based on paperwork they would file in advance) to have business negotiations with buyers in a
separate room for 30 minutes.
At the exhibition, the Ethiopian visitors and Japanese experts set up the stand by taking in
the design concept applied at previous display (e.g. the wall should be a white tone, there should
be bright colors) to remind visitors that this display was a follow-up to the previous one and to
gain wider recognition for the brand. In addition, a leather model airplane was displayed as an
iconic item 9 to portray the “lightness” and the “thinness” of Ethiopian Highland Leather products.
The promotion video “Creativity in Motion” was played. Ethiopian coffee was served toencourage visitors to stay in the stand.

9

An object which serves in an easily comprehensible manner to define the character of a proposal
or an argument to be put forward.

105

Figure 5-1 IFF Ethiopian Highland Leather stand in 2016
Due to a limited number of stand staff members and a time-consuming questionnaire forvisitors, the Japanese experts chose to conduct an online questionnaire survey. In the breakdownof those companies involved in business negotiations, manufacturer accounts for the largest share(39%) followed by retail businesses, and distributors at 27% and 16%, respectively. In the
breakdown of total visitors to the exhibition, manufacturers, retail businesses, and distributors
made up 18.8%, 32.8%, and 13.9% of the total, respectively. It is apparent that the Ethiopian
Highland Leather stand attracted attention particularly among manufacturers.
In the previous survey, nearly half of the respondents referred to the product design as
an issue for improvement. In this survey, 27.6% of the respondents showed concern with thedesign, but the proportion of those referring to the design as an area for improvement decreased
to nearly 25%. On the other hand, those respondents expressing concerns about the quality ofmaterials increased to nearly 25%.

Figure 5-2 Breakdown of the types of business which negotiated with
Ethiopian companies and comments on improvement points

106These changes in tendency should be the outcome of design assistance offered in thelead-up to the exhibition and may also be attributable to the fact that a larger number of buyers
actually picked up the products to see whether they would like to trade in them in the future.
Japanese staff attended to the visitors in the stand this year, as had been arranged in July 2015
(for the first display at IFF), and they remarked that individual visitors had stayed in the standlonger and that it had been possible to organize a business negotiation based on specificconditions.
The followings are comments received in the questionnaire survey as well as duringbusiness negotiations in the stand.

• It was good to prepare the swatch of leather material• Small article made in Ethiopia fully would be competitive inJapanese market.
• I like to use this leather because of the softness not likeleather• Jacket which can be fold small, hair accessories such ashead band, dressy articles can be appropriate.
• I want to know which companies’ chemicals are used.
• A lot of companies looking for new material. This leather
can attract such buyers.
• This leather very light thus it would be good for garment.
• The glove’s pattern is not for Japanese.
Thus, it is difficult to sell the gloves in Japan.
Product• I am wondering the fastness.

• I am wondering stability of quality.
• If there was a cooperative buying system, it is useful
for Japanese buyers because they can buy small
quantity.
• We will participate in Tokyo Leather Fair andshowcase Ethiopian sheep leathers in our stand.
• Is there any staff who can speak Japanese in
Ethiopian company• It is better to showcase package design image also.

Place• It is expensive.
• It is good strategy to sell high price and small
quantity such as dozens to one hundred rather thanto sell cheap price and bulk such as thousands.
• Retail price of jacket will be 200 thousand yen if it
was produced in Japan. It is impossible to sell inJapan.
• Sheep leather can attract many buyers because
price of cow hide has a jump in world globally.
• Some items’ price are very cheap thus it is better to
fix expected retail price. Due to the cheap prices,
one product would have two prices.

Price• The theme of stand is very clear.
• The lively atmosphere more than otherstands could increase number of visitors
who dropped in the stand.
• It is easy to drop because the stand ismore beautiful than others.
• It is better to set mirror.
The showcased items are not adequate for AW season.
There was no focal person so I could not get details.
A buyer that I knew recommended me to visit the stand withsaying “it was very lively!”.
I have visited the stand in the previous IFF.
It is good international cooperation because it was tangible.

Promo
-tion

•
•
•
•
•

Figure 5-3 Comments from the visitors during the business meetings
A definite conclusion can be drawn that visitors fully appreciated the intention of
exhibitors to continuously launch new lines of products made of leather materials. At the sametime, many still voiced their concerns about the product inspection system. It is therefore
important for the respective companies to continuously work on technical improvements and tobuild on their previous experiences in trading with overseas companies.
Regarding pricing, many considered final products – especially the garments – FOB requite expensive. At the same time, some believed that products offered by vertically integrated

107

companies from tanner and manufacturer were inexpensive in price. As a new issue of concern,price discrimination has emerged. This time the Ethiopian side set their price only in a FOB origin
and did not set a sales price (sticker price). Some regarded it as a cause of concern for being
charged different prices for the same product in the same market when trading with multiple
Japanese companies is launched. Given these comments, it is necessary to make efforts to furnish
further information to visitors.
In the area of distribution, thanks to the efforts made by Ethiopian companies to lower
the minimum order quantity requirements for both leather materials and final products, few
expressed concern. Many asked for information about the joint purchase structure to respond to
the needs of small retail businesses who may not be able to meet the minimum order quantity
requirement and would like to be referred to agents so as to avoid direct trading.
(2)

Brand promotional activities by ELIA
At some overseas exhibitions where member companies display their products, theEthiopian Highland Leather promotion program has been launched, using free-standing banners
and posters. Also, the suggestion was made that Ethiopian Highland Leather promotion activities
be launched at the All African Leather Fair (AALF) organized by ELIA. However, due to a lackof funds, AALF has not been held since 2015. At the board meeting in November 2016, a plan for
Ethiopian Highland Leather promotion activities at the below-listed exhibitions and Ethiopian
Highland Leather promotional magazine ads is expected to be put forward for approval. ELIA
intends to submit proposals to MOI and respective donors in the future with a view to securing abudget to cover its activities.
Exhibitions: Asia Pacific Leather Fair (Hong Kong, China), Magic Show (Las Vegas, US), All
China Leather Exhibition (Shanghai, China), Lineapelle Leather Fair (Milano, Italy)
Magazine Ads: Leather International Journal (published in London, UK), International Leather
Maker (published in London, UK), Indian Leather Journal (published in New Delhi, India)(3)

Brand promotional activities in JapanThe following activities have been carried out in Japan as part of the continuous

promotion of the Ethiopian Highland Leather brand.
1)

Additional production of promotion tools (posters in Japanese/English & free-standing
banner)Posters and free-standing banners were produced as new promotion tools. Banners were

produced in Ethiopia and are also used by ELIA and partner companies for their displays atoverseas exhibitions.

108

Figure 5-4 Free-standing banner and hot stamping
2)

Use of trial hot stamping
A branding iron to be pressed on products manufactured by partner companies using

Ethiopian Highland Leather has been launched on a trial basis. Products to be launched in theautumn/winter 2016 will bear the iron mark. It was difficult to have a branding iron in a size thatcan be pressed against small leather goods manufactured in Ethiopia. An order was placed with aJapanese company and the final product was delivered to ELIA.
3））

Involvement of influencers in promotional activities
An arrangement was made to involve influencers (influential persons) – mainly “reader

models” who are active bloggers and social networking service (SNS) users – in promotional
activities targeting fashion-conscious women. Consideration was given to age group/target
audience group, style of writing (whether they put a photos of whole view of product), andblog/SNS follower numbers in a comprehensive manner. From this the five influencers listed
below were selected. The outcome of this arrangement is as follows:[Blog Posts]
PV (number of visits)
UU (number of unique users)
Reaction (persons)[SNS posts]
Total number of SNS posts
Reaction (persons)16,457
14,956
Positive by 358; FB share by 72; 7 comments; number ofreaders 13,298
12 Twitter posts; 8 Instagram posts; 2 Facebook posts
Twitter: 20,394 followers: good by 73 persons, retweet by 1
personInstagram: 49,360 followers: good by 2,626 persons; 85
comments
Facebook: good by 20 persons; 3 comments

109

4)

Publicity in the Japanese media
In concurrence with the product display at IFF 2016, a press release was issued, causing

wide and positive reactions, as shown below. Many media outlets put a positive spin on thesepromotional activities.
Ehime Shimbun
Newspaper(circulation 290,000)
Senken Shimbun
Newspaper(circulation 200,000)“Learn Strategy to the Sheep Leather Branding” (April 22, 2016)

NHK World TV“Learning from Japan’s Brand Strategy” (May 13, 2016)(4)“High Quality International Companies Participate” (April 26,
2016)“Visitor’s Voice” (April 27, 2016)

Evaluation of the effects of brand promotion activities in Japan
In order to evaluate the receptivity to and the future potential of the Ethiopian Highland

Leather brand following test marketing in Japanese markets, a consumer survey was carried out.
For details of the survey design, please refer to Chapter 3.5. Initially, product images andinformation that these products were manufactured in Ethiopia were disclosed to consumers to
see their receptivity thereto. Then various tools of promotion (brand leaflets and posters)
portraying Ethiopian Highland Leather brand concept, selling points, and its worldview wereshown to consumers together with those product images, so as to ascertain their receptivity thereto.
This is the method applied to evaluate the branding approach as well as Ethiopian Highland
Leather branding.
1) Change in attitude toward Ethiopian leather products after contact with the Ethiopian
Highland Leather brand
The image of Ethiopian leather products showed improvement in the majority of items
after contact with the Ethiopian Highland Leather brand. Items related to the level of quality suchas “high quality” and “image of being carefully produced” showed particularly large increases of
20–40 points among ordinary consumers. (The increase was 40 points or more among consumers
with an interest in fashion.)
The comments in the open comment space also confirmed high brand receptivity, such as:-“Ethiopia has a long history, and I thought that the leather goods made by people withsuch skills and creativity must be of high quality” (woman aged 20s).
-“I became interested in a variety of products created based on sensibilities different
from those in in Japan” (woman aged 30s).

110

The scores related to the desire to buy Ethiopian leather products improved for all products
after the presentation of the Ethiopian Highland Leather brand materials. The largest increases inscores among ordinary consumers were for shoes (sneakers) for the men and handbags for the
women. Among the consumers interested in fashion, the largest increases were for shoes(sneakers) and the reversible canvas tote bags for the men and handbags for the women.
2) Favorable image of produced materials (brand leaflets, poster)
A large percentage rated the poster and leaflets as making a “strong impression” and of“good sense,” and the impression from all of the materials was consistent. Score results wereparticularly high among consumers interested in fashion.
Contact with the Ethiopian Highland Leather brand not only improved the scores forleather products but also improved the evaluations of other Ethiopian products and Ethiopia’s
image. This confirmed the potential of an approach to improving the country’s image by
establishing flagship brands.
The fact that there was a definite change in attitude toward Ethiopian products following
contact with the brand shows the high potential for the brand concept and worldview in thepremium market. Receptivity was particularly high among consumers with high fashion sense,
and it is believed that the design of a brand which will be accepted by the target market was
successful. In addition, the potential of an approach to improving the Ethiopia country image andthe perception of “Made in Ethiopia” by improving the image of the leather sector was also
confirmed.
However, since product commercialization is limited and the number of shops selling the
products is small, brand recognition is insufficient. To expand the number of selling shops in the
future, in the same way as the Creativity in Motion brand, the key issues will be continual brandmanagement and the construction of a strategy for capturing recognition on the Ethiopian
stakeholders.

111

In the same way as "Made in Ethiopia", the scores improved for the majority of "Ethiopian leather products" items.
Items related to the level of quality such as "High quality" and "Image of being carefully produced" showed a particularly large increase of 20 – 40 points
among ordinary consumers. (The increase was 40 points or more among consumers with an interest in fashion.)
Q5: What kind of impression or image do you have of leather products produced in Ethiopia?
*If you have no impression or image, select No. 22 "No particular impression or image".
Q18: What kind of impression or image do you have of Ethiopian Highland Leather after viewing the video, website, poster, and leaflets?
Ordinary consumers before video
Consumers interested in fashion before video

70％

Ordinary consumers after video
Consumers interested in fashion after video

60％
50％
40％
30％
20％
10％

Make strong impression

Technically skilled

Ample color variations

Unique characteristics

Sense of tradition

Dependable

Cool

Selling well

PopularFamiliar

Other

No particular
impression or image

I do not know what
Ethiopia is

2.5

2.5

4.6

5.0

1.3

1.7

6.3

10.0

0.0

2.5

0.4

0.4

0.8

0.8

0.0

0.8

7.5

0.0

64.6

2.9

After

(240)

44.6

29.6

20.4

19.6

19.6

20.8

20.4

16.3

13.8

15.0

17.5

5.8

8.3

4.2

3.8

4.2

2.5

1.3

1.7

0.8

1.3

24.6 *

-

38.3

22.5

17.9

17.1

17.1

16.3

15.4

15.0

12.1

8.8

7.5

5.8

5.8

3.8

3.3

3.3

1.7

1.3

0.8

-6.7

1.3

-40.0 *

Before

(60)

10.0

10.0

1.7

5.0

6.7

5.0

11.7

3.3

6.7

21.7

13.3

0.0

1.7

3.3

0.0

5.0

5.0

0.0

1.7

6.7

1.7

53.3 *

After

(60)

55.0

53.3

31.7

21.7

25.0

41.7

35.0

36.7

23.3

26.7

30.0

15.0

11.7

5.0

0.0

11.7

3.3

1.7

3.3

5.0

3.3

10.0 *

-

45.0

43.3

30.0

16.7

18.3

36.7

23.3

33.3

16.7

5.0

16.7

15.0

10.0

1.7

0.0

6.7

-1.7

1.7

1.7

-1.7

1.7

-43.3 *

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

Difference

Difference

Figure 5-5 Changes in impression of Ethiopian leather products

112

High quality

Buying is a kind ofvolunteer activity

High level of dedication

2.5

Frequently subject ofmedia or conversation

Fashionable

7.1

Have flowers

Good sense

6.3

n=

The products suit mytastesLook soft(240)

Image of being carefully
produced

Ordinary
consumers

BeforeConsumers
interested in
fashion0％23

Q7 & 8) Do you want to buy these leather products made in Ethiopia?
Q20 & 21) (After watching the video and seeing posters and leaflet) Do you want to buy these Ethiopian leather products?
Shoes Sneakers

Tote bagSlip-on shoes

Pen case

JacketShopping Bag

Answered by women

Answered by men
Figure 5–6 Changes in mind for purchase of Ethiopian leather products113

Q 16) Please check the appropriate item about your impression for the poster after you saw it.
Q 17) Please check the appropriate item about your impression for the leaflet after you read it.

Figure 5–7 Evaluation for poster and leaflets

114

Q 23) Please check the appropriate item that is the closest to your opinion on Ethiopia (country itself) and products made in Ethiopia.
Q 24) Why did you become interested in Ethiopian products? Please answer your reasons concretely.

Ordinary consumersn=① Accurate②

Consumers interested in fashion③ Mostly④(％)

Somewhat inaccurate Inaccurate
accurate

I have a more positive
image of Ethiopia.

(240)

25.0

I feel a connection to
Ethiopia.

(240)

17.5

47.5

29.2

I became interested in otherproducts made in Ethiopia.

(240) 15.0

44.2

33.3

51.3

①+②

n=

① Accurate②③ Mostly④(％)

Somewhat inaccurate Inaccurate
accurate

①+②

76.3

I have a more positive
image of Ethiopia.

(60)

38.3

5.8

65.0

I feel a connection to
Ethiopia.

(60)

35.0

43.3

18.3 3.3 78.3

7.5

59.2

I became interested in otherproducts made in Ethiopia.

(60)

31.7

46.7

18.3 3.3 78.3

17.9 5.8

Figure 5-8 Changes in impression of Ethiopia’s brands

115

51.7

8.3
1.7

90.0

5.2.2

Action 7: Creation of business templates
At the time of the product display at IFF 2015, it was noticed that the exhibitors were

often unable to provide sufficient information to visitors on a minimum quantity, a delivery date,and FOB amongst other things. At the same time, Japanese buyers visiting stands were notsufficiently proficient in English to collect information and this became an obstacle tocommunication. The Japanese experts, thus, decided to prepare for a template for the productdisplay at IFF 2016.
First of all, the Japanese experts created the list of displayed products with a space toattach a photo of a sample and sections to fill out information on FOB, delivery date, andminimum order quantity, etc. Once companies filled out this template, the information wascollated into an Ethiopian Highland Leather catalogue, which was then used as a referencematerial during the IFF. Print-out copies or PDF copies were distributed to those visitors asking
for a copy of the catalogue.
Another template was created, on which information on business cards exchanged duringbusiness negotiations as well as information about business negotiations should be fill in. Basedon those details filled in on this template, once the exhibition was over, follow up actions weretaken to keep every visitor updated.

5.2.3

Action 8: Increase of the role of the Embassy of Ethiopia in Japan and MOFA
Every Embassy of Ethiopia plays a large role in terms of collecting information in target

markets and sending information about Ethiopian companies. To date, the Embassy of Japan in
Ethiopia has organized various seminars, has extended invitations to Ethiopian companies toJapan, and has also responded to inquiries from Japanese companies. Yet, the Embassy of Ethiopia
in Tokyo has less knowledge of the leather industry than agriculture, which it tends to focus on;
this is why their involvement has never been secured.
The Embassy of Japan in Ethiopia proposed they send a letter to potential customers forthe product display of the IFF 2016. The Ethiopian ambassador sent invitation letters to thosecompanies which had business negotiations at the product display of the IFF 2015. The invitation
letter indicated that the embassy is willing to set up business negotiations at the venue of the IFF
2016 in response to requests from the companies. Indeed, business negotiations were held withseveral companies. Also, following the product display at the IFF 2015, the Embassy of Ethiopia
in Japan received inquiries from some companies. The Embassy staff are dealing with these
inquiries in collaboration with the Japanese experts.
Meetings have been held with Ms. Hirut, business diplomacy directorate director, on anumber of occasions, thereby proactive involvement of Ethiopian Ministry of Foreign Affairs in

116

CPA activities has been secured. Through Ms. Hirut’s intermediary, the Japanese experts
presented a proposal on the introduction of Ethiopian Highland Leather brand products as inflight duty-free items to Ethiopian Airlines. The proposal is still under consideration in regard towhether wallets, clutch bags, women’s shoes, stationary, and scarves suggested by partnercompanies should be included in their in-flight duty-free shopping.

5.3

Visit to Japan in April 2016

5.3.1

Action 9: Cooperation with Japanese industry associations
Regarding future promotional activities in Japanese markets, collaboration with leather

goods manufacturer organizations would be indispensable if only to minimize concerns ofJapanese companies over competition. Cooperation in respect to market needs and technicalcollaboration should also be possible. Lessons can be learned from cooperation with manufacturerorganizations – not only in the leather sector – which have put great effort in branding local
industries, including brand management-related issues. The representatives from Ethiopian
partner companies ELIA and LIDI took an opportunity (when they were invited to Japan in
preparation for the product display at IFF 2016) to pay a visit to Shikoku Towel Industrial
Association in Imabari City in Ehime Prefecture and to the Japan Glove Industrial Association in
Higashi-Kagawa city in Kagawa Prefecture.
(1) Visit to Shikoku Towel Industrial Association
Shikoku Towel Industrial Association is a manufacturer group in charge of the
management of the Imabari Towel brand. Ten years ago when the association launched a branding
project, the majority of member companies were operating under supply OEM agreements withindustrial giants, and over 90% of them were in deficit. The output in 2014 was more or lesscomparable to what it used to be in the early days of the project. Yet, 114 out of 116 member
companies are now in surplus. With stronger brand equity, the brand value has increased, pushingup the price by 20 to 30% even under the same OEM arrangement and raising profit margins. The
association let its members use the Imabari Towel logo at JPY 5 per copy and sells 70 million
brand tags per annum across the association. Revenues from sale of tags are earmarked for
expenses for the Imabari Towel brand operation/management as well as for putting up displays atdomestic and overseas exhibitions.
(2) Visit to Japan Glove Industrial Association
A lecture was given on the Japanese glove market at the Japan Glove Industrial
Association, and the representatives had an interview with a representative of a company basedin Higashi-Kagawa city. The visit to the city gave them an opportunity to understand that the117tanning technique highly appreciated by Japanese companies is focused on texture andmoisturized feeling. They were also informed of a drop in glove sales in Japanese markets due tothe declining birth rate, global warming, and economic downturns. Although 70% of gloves
manufactured in Japan are made of artificial leather, sheep leather produced in Ethiopia wasappraised as a material with a high standing and thus has high potential for products.
(3) Visit to an inspection company
To better understand the level of quality required by Japanese market participants, during
IFF 2016, LIDI staff and leaders from the respective companies visited a product inspection
company in Chiba Prefecture. That product inspection company carries out inspections on a whole
range of apparel. As is often the case, products once inspected overseas would undergo a productinspection in Japan at the request of clients. The company advised the visitors that the percentage
of defective products should be kept at 1% if they would wish to trade with Japanese companies
on a continuous basis.
The company conducted a general, as well as standard, product inspection on thosesamples the respective companies brought, and gave some advice. In respect of fastness andsewing, all the samples met the criteria. However, many of these samples were ranked as GradeB due to a trace of pen marking (marking on the material for cutting), stray leather cement/glue,and scars. (Grade A means the product “passed” the product inspection, whereas Grade B means
the material failed to set the inspection criteria). The company in Chiba noted that the maximum
admissible range of shades among materials with the same color, the maximum admissible sizeof inherent stains, etc. would need to be agreed with clients beforehand during negotiations, but
the abrasion seen on the surface of these samples was simply out of the question.
Following this visit, it is expected that the Ethiopian side would have to also visit Japanfor a better understanding of the level of quality required by Japanese market participants.

5.4

Research on structural problems in the Ethiopian leather sector

5.4.1

Action 10: Strengthening of competitiveness by reducing order quantities
Japanese companies need to meet the need of today’s Japanese consumers by offering awide variation of products manufactured in small volume and thus want a small-volume trade. On
the contrary, Ethiopian tanners will face increases in tanned skin unit prices unless they process
skin at constant volume in drums.
Before the interim wrap-up meeting convened last year, an ELIA director meeting washeld in December 2015. At the meeting, LIDI and ELIA representatives discussed the fact thatlarge minimum lot sizes determined by tanners hampered trade with overseas companies. At thesame time, in domestic trade, opportunities are extremely limited for small- and medium-sized118

Ethiopian manufacturers without affiliated tanners to access high-grade small-lot sheep leather.
The Japanese experts requested ELIA to select companies to take part in the product display at
IFF 2016 from the viewpoint of whether or not tanners should be able to provide Ethiopian
manufacturers with high-grade small-lot leather, and this proposal was accepted. Therefore, it
became possible for Ethiopian manufacturers to set a minimum order quantity based on the
demand of Japanese buyers. Although it was not put into writing as a guideline, the Ethiopianside has come to acknowledge the need of undertaking initiatives to ensure this type ofcooperation in Ethiopia.
A Japanese agent company, Sun Rich Consultant, was founded up in January 2016. The
company has already launched a campaign in Japan to market Ethiopian Highland Leather
products. Mr. Arai, a company representative, used to stay in Ethiopia as a JICA volunteer and in
the capacity of a development consultant. Building on his previous experience and havingassessed its market potential, he started to trade in sheep leather in Japanese markets. He joined
forces with Ethiopian companies to promote the product display at IFF 2016. Currently, throughthis company several Japanese companies are studying the feasibility of trading with Ethiopian
companies. On the other hand, there are some numbers of Ethiopian companies that do not liketo have the mediation of these agents and prefer direct trading with Japanese clients.

5.4.2

Action 11: Promotion of cooperation between tanners and manufacturers
To take actions to accommodate the minimum order quantity required by Japanese market

participants, minimum order quantities allowed between tanners and manufacturers within the
Ethiopia need to be lowered. For this purpose, a proposal was made to raise awareness for theneed to lower minimum order quantities across the industry in overseas and domestic transactions
under ELIA’s initiative. In the selection of companies invited to IFF, those tanners who sell leather
in small quantity to manufacturers within Ethiopia were picked.
At the IFF the product display in April 2016, the respective companies suggested tovisitors during negotiations that a small volume order could be accepted. For example, Pittards
Products Manufacturing developed a jacket and would accept a minimum order quantity of one
piece. Sheba Leather would accept a minimum order quantity of 120 pairs per model for its
sneakers, while Hafde Tannery would agree to take a minimum quantity of 500 sq. ft. per orderfor its leather materials. These quantities were not imposed on them by Japanese experts;
Ethiopian companies voluntarily came up with these quantities. This may be a sign of theirmindset change, as they may have started thinking that entering a trade first – no matter how
small it may be in quantity – could be important.

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5.4.3

Action 12: Initiatives to deal with upstream issues in the value chain
One of the main reasons for Ethiopian tanners to package-sell a mixture of grade 1 to 5

hides is that the quality of raw hide and skin is inferior. Market demand of grades 1 to 3 hides ishigh, yet its share in total production accounts for no more than 15%. This is why a package saleis a way to prevent overstocking the grade 4 and 5 hides. Only raw materials without scars andskin disease, properly treated and stored when and after the animal is slaughtered, can be turned
into high-grade sheep leather. This is why it was agreed between ELIA and Ministry of Livestock
and Fisheries (MOLF) at the interim wrap-up meeting to identify issues in the upstream in thevalue chain and consider solutions thereto, as shown below.
Following the reshuffle of government ministries, MOLF was set up as a spin-off fromthe division in MOA in charge of the livestock and fishing industries. Before the “independence”
of this division from MOA, to lower the rates of skin diseases and parasites in livestock veterinary
products had been distributed to farmers across the country and a program had been implemented
to educate and train agriculture instructors. There has been no visible positive outcome obtainedand data has not been shared as opposed to what was initially envisaged. On the other hand, ELIA
has yet to conduct a questionnaire survey among its member companies.
The Japanese experts conducted a hearing survey at the time of their field visit during
the additional period; this was an interview survey among staff at the ELIA office, individual
tanners, and person/s in charge at MOLF. As a result, in the upstream of the value chain fromfarmers to tanners the issues shown in the diagram below as well as actions being undertaken in
Ethiopia emerged.

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Table 5-2 Issues in the upstream in the value chain and measures

5.4.4

Action 13: Improvement in the quality of leather materials and yield rate
Improving the quality of raw hide and skin in the upstream in the Ethiopian leather

industry is of importance (as discussed in 5.4.3). Initiatives aimed at increasing the yield ofleather materials also need to be undertaken in collaboration with not only ELIA, LIDI, and therespective companies but also with MOLF.

5.5

Building of a brand system

5.5.1

Action 14: Operation of accreditation system
ELIA needs to increase the number of companies that support the brand concept so thatit could put in place a sustainable structure for brand maintenance and management. For the121purpose of putting an accreditation system in place, preparations for the operation of theaccreditation system were made in collaboration with ELIA, EIPO, and LIDI.
Companies that want to use the Ethiopian Highland Leather brand apply to the ELIA andhave their samples tested by the Institute of LIDI. If the company and the product reach the quality
standards of the brand, the certificate is issued from the ELIA. Based on the discussion on
inspection methods, factory inspection procedures has been proposed by LIDI (see Figure 5-9).
Companies that have obtained the certification then deliver samples to LIDI every year.
Table 5-3 Proposed procedure for certification of tanners
STEP.
Step 1.
Step 2.

Step 3.

Step 4.
Step 5.
Step 6.

Step 7.

Activity
Communicate the inspection plan totanneries selected as per ELIA criteria
Take representative samples as per
sampling criteria of processed sheep
skins
Prepare price notification as per preset price index and confirm payment

Timespan
3 daysConduct test as per international andin- house test methods
Prepare test report along with standard
requirements
Notify test result to respective
tanneries, brand managers of LIDI,
EIPO, and ELIA
Follow up any corrective action if
discrepancy is noted

5 days pertannery
1 day pertannery
1 day
per 2– 5tanneries
1 monthper tannery

1 day per 2–3
tanneries
3 daysExpected output remark
Confirmation of
inspection plan
Samples withidentification code
Payment receipt from
LIDI Finance, Purchase,
and Resource
Management Directorate
Checked and approved
worksheet
Checked and approved
test report
Confirmation of receipt

Start from step 1 andfollow each step

N.B. Annual onsite inspection/sampling will be conducted upon negotiation withrespective tanneries in accordance with the nature of production and order availability.
Individual tanners wishing to use the Ethiopian Highland Leather brand are expected toapply for approval from ELIA. That said, ELIA does not currently have anyone in charge ofEthiopian Highland Leather brand management and is yet to produce an application form template.
Moreover, ELIA has not issued an official notice to a respective company; although there havebeen a few inquiries from companies, there has so far been no case where the aforementioned
factory inspections were carried out. Discussions were held between EIPO and Japanese experts
over the question of how EIPO should be involved in the accreditation system. A response was
eventually received, saying that ELIA is an applicant in respect of trademarks within Ethiopia
and that EIPO should not be involved in granting accreditation to ELIA group companies.
As the above discussion attests, a failure to get the accreditation system going is mainly
attributable to ELIA’s staff and budget shortage as well as lack of knowledge of operational
procedures. Assistance from LIDI and MOI is expected.

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5.6

Efforts for other issues

5.6.1 Action 15: Activities to encourage inward investment in Ethiopia byforeign companies
The manufacturers in Ethiopia always refer to low-quality accessories as an issue. The
needs of the Ethiopian company may not be a motivation for foreign manufacturers to move inand sell high-quality accessories in Ethiopia. In order to resolve this particular issue, Ethiopian
government needs to take the initiative to encourage overseas manufacturers to come to Ethiopia
with the goal of substantially boosting domestic demand. Although measures aimed at promoting
activities to encourage inward investment in Ethiopia by overseas companies were put together
and submitted to the attention of MOFA and EIC, no specific CPA activities have yet beenlaunched in response thereto.

5.6.2

Action 16: Introduction of kaizen activities
The introduction of kaizen activities is believed to be an effective way to improve thequality of products among the relevant partner companies. LIDI is supporting introducing kaizen
activities to companies belonging to the leather industry in collaboration with Ethiopian Kaizen
Institute. To facilitate the introduction of kaizen in the partner companies, meetings with LIDI’s
officers in charge of the CPA were held. The Japanese delegation visited a shoe manufacturer that
introduced kaizen activities supported by LIDI with a view to understand to what extent LIDI is
involved in their in-house activities. The visit revealed that the Ethiopian Kaizen Institute was
implementing these activities without the LIDI consultant’s involvement.

5.6.3

Action 17: Streamlining of import/export procedures
It is reported that an Ethiopian company that tried to procure materials from overseas

suppliers could not finish sample production by the deadline designated by a Japanese company
because of the time-consuming custom procedure in Ethiopia. Also, some Japanese companies
say the procedures for trading goods from/to Ethiopia is too complicated. As it stands, theEthiopian side has not been showed significant action in reaction to the CPA activities regardlessof the discussions with EIC and MOT. Therefore these relevant authorities should be involved andagreed to a consistent and clear procedure to be established.

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Chapter 6

Activities in the Leather Sector– Further Strengthening of the Brand System(Nov. 2016 – Feb. 2017)125

Activities in the Leather Sector – Further Strengtheningof the Brand System (Nov. 2016 – Feb. 2017)
To review the past activities with a view toward completing CPA Phase 2, a workshop forstarting up the Ethiopian Highland Leather brand system and a study tour in Japan were conducted
for the Ethiopian counterparts to gain a better understanding of branding in December 2016. During
the workshop, the brand certification and product inspection systems were discussed to maintain thequality of products. In response to the workshop’s results, two Japanese experts were sent to Ethiopia
in February 2017. The detailed activities are described below.

6.1

Implementation of the visit to Japan

6.1.1

Introduction on the visit
Ethiopian counterparts were invited to Japan designed to establish the Ethiopian Highland

Leather brand management system, launch the management as well as facilitate improvements in the
sheep leather materials and products. The delegation from Ethiopia comprised governmental officials(four from LIDI and the Ministry of Industry) and counterparts from the private sector (ELIA’spresident and four from private companies). The second secretary in charge of business and economic
affairs within the Ethiopian Embassy in Japan accompanied the delegation during part of the visit.

6.1.2

Study tour

(1) Visit to Imabari Towel-related parties
The delegation visited Imabari Towel-related parties in Imabari City, Ehime Prefecture, tolearn about the role of the local government and industry groups in promoting a local brand as well as
how private companies use the local brand. The destinations of the delegation included Shikoku Towel
Industrial Association, towel manufacturers, the municipality of Imabari City, the Textile Technology
Center, and other public/private parties.
1) Commerce and Industry Promotion Division, Industry Department, Imabari City
The delegation listened intently about the local government’s support for industry, such as
through subsidies. Imabari City aims to vitalize the local brand Imabari Towel, which is expected tomake a large contribution to the city’s tax revenue through the benefit increase for local companies.
The municipality recognizes its important role in providing beneficial information to the local industry
and in coordinating subsidies.

1272) Textile Technology Centre, Ehime Institute of Industrial Technology
The delegation learned about the efforts of a public technical institute to promote industry.
The Textile Technology Centre provides information through seminars and technical training for local
human resource development. Also, the center plays a leading role in creating high-value-added
products with material manufacturers and universities, supporting human resources capacity building
for product planning and promotion, and introducing appropriate industrial designers to the local
industry through business matching.
3) Shikoku Towel Industrial Association
The delegation visited the Shikoku Towel Industrial Association again after its last visit in
April 2016. They learned about the role of industry groups, more precisely, Imabari Towel gained
recognition as a high-quality and high-value-added product by branding, and such efforts influenced
not only the individual company but also the entire local towel industry. This time, the association
explained practical information about brand management, including the application system of a brandcertification, screening, database management, and material control of tags, and packaging. Sales ofmaterials is a significant funding source for the promotion of Imabari Towel and for operational
management. Moreover, the delegation observed a demonstration of a water-absorbability test called
the “precipitation method,” which is a necessary step to certify Imabari Towel, and they learned about
how the local brand is managed through the required processes.
4) Masaoka Towel Co., Ltd.
The delegation toured the production process and quality-control process before shipment.
During the quality-control process, the delegation learned that the manufacturer removes defective
items even with a small scratch, which is a necessary step to maintain the brand’s value. The
manufacturer believes that such high-level production and branding efforts can deliver a clearer
message about the high-quality products to the customers.
(2) Visit to leather-related institutions in JapanThe delegation visited a leather-related research institution to improve the quality of thetechnical assistance by LIDI. Additionally, the delegation toured a tanner and an inspection company
in Japan to understand how the leather sector and the apparel industry in Japan maintain their qualitycontrol systems and technical strength as well as how to use such systems and power to improve thequality of leather materials and products in Ethiopia.
1) Tokyo Metropolitan Leather Technology Centre
The delegation toured the main facility, including the exhibition hall, tanning equipment, andconstant temperature and humidity testing room, and witnessed a live demonstration at the electronic128

microscope room. To understand the level of a leather material test by LIDI, the test results for thesame material analyzed by both LIDI and the Tokyo Metropolitan Leather Technology Centre werecompared. There was no large difference in the test results.
2) Ito Sangyo Co., Ltd. (Tanner)
The delegation toured a factory after the owner gave a brief explanation about his company.
The owner emphasized that Ethiopian sheep leather has high demand for use in sports gloves, while
Greek and Spanish lamb leather tends to be used for dress gloves and clothing in the Japanese market
because of its natural characteristics, with fewer scuffs and scratches compared to Ethiopian sheep
leather. Also, he pointed out that the leather samples brought from Ethiopia are thick and that thosesamples smell, are unevenly colored, and have scuffs and scratches.
3) Kato Knit Press (Inspection Company)
The delegation toured a company’s inspection process. The owner of the enterprise explained
the importance of third-party inspection for ensuring safety from the customers’ perspective as wellas its effects on improving brand value. The owner also mentioned that feelings of trust can be seen
worldwide for the Japanese-style inspection system and high-quality inspection services. For instance,
European companies tend to start production in a developing country after a Japanese company has
established an inspection system at the local level.

6.2

Brand workshop in Japan

6.2.1

Summary of brand workshop
In December 2016, a brand workshop was held in Tokyo for nine delegates from Ethiopia. In

light of the lessons learned from the study tours in Imabari City and the suburbs of Tokyo, thedelegation exchanged views on the direction of their branding strategy and examined the brandmanagement structure.

6.2.2

Results of brand workshop(1) Branding strategy
The delegation actively discussed the direction of the branding strategy, with the brand vision,
target markets, and market competitors in mind. First of all, regarding the future vision, there weresome comments about Ethiopian Highland Leather’s aims, including “premium high-quality products
appealing to the customer, which can be differentiated from cheap leather products”; “organic, less129

chrome and eco-friendly products”; “Ethiopian sheep leather balances its natural uniquecharacteristics with high quality”; and “the only one product that is produced by traditional
craftsmanship and modern technology.”
Next, the following types of target markets were mentioned: (1) premium and mature
markets in which customers require high levels of quality (e.g., Japan, Germany, Switzerland,
Northern Europe), (2) markets with a large population, large purchasing power, with access to theglobal market (e.g., the United States), (3) emerging countries’ markets (e.g., Russia and China),and (4) international business and trading hubs (e.g., Hong Kong, Asian gateways). It wasclarified that the Ethiopian Highland Leather brand aims to build a brand by seeking high quality.
On the other hand, the following countries were mentioned as competitors in the market: (1)China (China procures raw materials from Ethiopia and produces leather items within the country. At
the same time, there are concerns about violation of Ethiopian Highland Leather’s intellectual
property rights. Also, cheap leather products made in China are competitive in price. ); (2) India (India
also procures raw materials from Ethiopia and produces leather items within the country. Cheap leather
products made of Indian leather collected and produced within the country have pricecompetitiveness.), (3) Pakistan and Bangladesh (As raw skin exporters, both countries are rival
competitors in the global market.), and (4) Italy (Italy has gained considerable market share in luxury
leather products and produces leather goods made of Ethiopian raw skins.).
(2) Brand management structure
In terms of quality assurance and brand delivery, the following topics were discussed to build
an effective brand management structure.
Quality Assurance
On the day after the visit to the inspection company, the participants shared the recognition
that the Ethiopian side needs to establish a structure for quality improvement and assurance. In theworkshop, the participants agreed to explore a new direction for the Ethiopian side by introducing acertification system for tanners and a customer-conscious inspection system for Ethiopian Highland
Leather’s products.
Brand Delivery
In the discussion on brand delivery, the delegation exchanged views about (1) budgetingsystems (how to secure a sufficient budget for brand management) and (2) personnel distribution/staff
assignment. Regarding the budgeting system, there are three types of funding sources: membership (asystem that collects membership fees from the member companies and/or application fees for granting
a certification), Royalties (a system that collects royalties from each country; for instance, royalties
are calculated based on a number of used brand tag), and subsidy. It was agreed that the delegation

130

would promote improvements in systems for collecting application fees for certifications and royalties
to obtain a brand tag.
As for personnel positioning for brand management, three of the following posts wereassigned to ELIA’s director-general and two staff members from LIDI.
- Brand manager: Supervises the activities of brand management- Quality assurance manager: In charge of quality control- Brand delivery manager: In charge of promotional activities
The quality assurance manager and brand delivery manager are supervised by the brand manager, who
collaborates closely with ELIA’s president and board of directors.

Figure 6-1 Agreed brand management structure

6.3
Research on LIDI’s testing and analytical capacities for the quality of
Ethiopian leather materials
6.3.1

Overview of the mission to Ethiopia
At the workshop in December 2016, the delegation discussed that LIDI would build an

accreditation system for quality assurance and launch an inspection into further activities for
Ethiopian Highland Leather’s branding. To assist with the introduction of the systems in terms ofprofessional knowledge on leather-related skills, Japanese experts were sent to Ethiopia with thesupport of the Tokyo Metropolitan Leather Technology Centre and the Leather Industrial Technology
Support Centre of the Hyogo Prefectural Industrial Technology Centre. The experts pointed out adifficulty in introducing uniformed accreditation and inspection systems for branding. Thus, it was131

decided to have a survey on LIDI to understand its present capacities to conduct a test/inspection for
CPA leathers.

6.3.2

Test results of the quality of leather materials and products(1) Raw material collection points and warehouses in Addis Ababa
In order to check the situation regarding the raw skins, Japanese leather technical experts
visited the Addis Ababa Abattoirs Enterprise and raw skin collection points and warehouses in the city.
The Addis Ababa Abattoirs Enterprise is a slaughterhouse run by Addis Ababa City that sells raw
skins to tanners. Regarding the sheep leather originating from the highland of Ethiopia, the experts
commented that the raw skins were inexpensive and competitive compared with those of othercountries, and the quality of the raw skins was very high because the fat layer was thinner than thoseof other types of raw skin.
Addis Ababa is located in the highland and has low temperature and humidity. Therefore,
Addis Ababa Abattoirs Enterprise, which delivers raw skins to tanners who have won bids after the
daily slaughter, does not preserve the raw skins with salt. Meanwhile, the raw skin buyers in the city
who collect the sheep raw skin, which was slaughtered at home, preserve the skins with salt in thewarehouse. When the experts visited, the raw skins hardly had a putrid smell. The experts did not
point out any problems with preserving the skins.
(2) Tanneries
The experts visited three tanners in Addis Ababa (ELICO Awash Tannery, Dire Tannery, andAddis Ababa Tannery). They gathered information and heard about the production process, the leather
material to be produced, basic information such as production capacity and number of employees, thechemicals to be used, etc. The tanners purchased basic chemicals from China, South Korea and India
and tanning agents from major leather chemical manufacturers in Europe. Because technicians fromthe chemical manufacturers visit regularly, information on the use of chemicals is sufficiently available.
On the other hand, there was a problem with work efficiency because the number of employees in thefactories was larger than in other countries' tanneries. The experts evaluated not only the sheep leather
but also the goat suede as having superior quality.
(3) Shoe and glove factories
The experts visited three factories that produce shoes and gloves (Fontanina Shoe Factory,
Peacock Shoe Factory, and Pittards Products Manufacturing). The experts pointed out that although
the leather material is of high quality, the price of the product has dropped because the sewing anddesigning techniques are low, and cheap imported items are used, such as for soles and zippers. In the
manufacturing process for shoes, manufacturing methods used for high-end shoes were not being used,
and methods used for low-price products were mainstream. As a countermeasure, the experts proposed132

establishing a tanner that produces hard and durable bottom leather, making full use of thecharacteristics of Ethiopian cows.
From their research results, the experts suggested that characteristics such as the strengthand smoothness claimed by the Ethiopian Highland Leather brand appeared not only in sheep
leather but also in cow hide leather and goat suede, and that Ethiopian Highland Leather should
develop products to utilize their respective properties. Also, the experts suggested that it is desirable
to compare Ethiopian leathers with leather from other countries by using analytical methods to
explain their characteristics.

6.3.3

LIDI’s testing and analytical capacities
LIDI's Testing and Research Directorate conducts tests such as leather physical property

tests, chemical analysis, shoe tests, and water analysis. The lab implements from 3,600 to 4,000 tests
per year. Tanners and manufacturers who cannot analyze their products themselves ask the LIDI for
testing and analysis. The Ethiopian Government provides subsidies for tanners and manufacturers to
be able to request tests by paying a portion of the test fees. The experts visited the facility several
times and conducted facility tours, observed demonstrations of tests and examinations by staff of the
LIDI, exchanged opinions, and instructed the staff at the site.
(1) Facility tour
During the facility tour, the experts noticed that the LIDI was receiving plentiful aid frominternational organizations and that it had enough equipment, in comparison with Japanese research
institutions. On the other hand, it was revealed that the LIDI did not have sufficient human resources
with the knowledge and experience to operate and maintain the equipment. Some of the equipment
had no staff members who knew how to use it.
Because the operating procedures of equipment differ by manufacturer, it is necessary toreceive guidance from manufacturers’ technical staff when the equipment are implemented and also
to order maintenance to them. The experts mentioned that LIDI should use equipment provided bymanufacturers from which it is easy to request technical staff.
(2) Test demonstration by LIDI’s staff
Many problems were pointed out during the test demonstration, such as in the sampling
method, the location of the test by test type (e.g., cool and dark place), hazardous chemical
management, and regular maintenance and adjustment of equipment, in attaining and acquiring thetest results.
Temperature and humidity control is required to conduct physical testing. It is also required
to use uniform conditions within the laboratory except for during exceptional circumstances. However,133the temperature and humidity controller was started up just before the test was conducted at LIDI. The
sample for a physical test is prepared with a punching die. However, LIDI’s punching dies are notmaintained well; therefore, the sample shape looked misshapen. Judgements for the color fastness
durability test are usually made by visual observation inside of the equipment. Therefore, thisequipment should be positioned in a dark room to avoid light. However, in LIDI, the equipment wasplaced in a room influenced by sunlight and fluorescent light. Accurate test results are impossible
in such conditions. LIDI also uses a room affected by sunlight as chemical storage. Although thechemicals are sorted alphabetically on the shelf, there were some chemicals that should be stored
in a dark and cool place as well as dangerous chemicals that should be kept in a lock-fast locker
on the same shelf.
Many such problems were caused by the lack of basic knowledge. Although some of thestaff at LIDI had experience with studying leather technology, no staff members were familiar
with practical testing and analysis procedures. It is important to send staff members to universities
that can teach such testing and analysis procedures to improve LIDI’s capacity. However, there
might not be any universities in Ethiopia with enough testing and analysis equipment; therefore,
it seems necessary to send staff members to universities in foreign countries.
(3) Exchanges of views and on-the-job-training by technical experts
During the demonstration by LIDI’s staff, the experts explained that it is necessary to receive
guidance from the equipment manufacturers on the operation and maintenance of individual pieces ofequipment. In addition, the experts made some comments and suggestions for settle some problems
and supplement basic knowledge of LIDI’s staff. Such comments and suggestions by the experts wereshared during the final meeting of the mission among Ethiopian and Japanese stakeholders.

134Chapter 7

Summary of the Achievement andRecommendations

Summary of the Achievement and Recommendations
7.1

Remaining issues and recommendations
The CPA project has achieved many positive results, which indicates that the CPA has had

tremendous effects. On the other hand, some problems emerged during the activities focusing on theleather industry and the cross-sectoral activities. These issues are summarized along the lines of value
chain flows (See Figure 7-1). CPA Phase 1 was concentrated on the downstream of the value chains,such as branding promotion. During the involvement in the leather sector triggered by the display at
the IFF, CPA Phase 2 involved identifying the issues in the upper- and mid-streams of the value chains,
including quality improvement of materials and products as well as corporate capacity development.
These issues were shared with the Ethiopian side. Chapter 7 concludes the CPA2 project with theremaining issues and recommendations.

137

Figure 7-1 Summary of the Issues Involving Value Chains1387.1.1 Remaining issues and recommendations on the downstream of the value
chainsDownstream of the value chains, ELIA’s sustainable brand management structure is not quiteadvanced enough yet. ELIA should secure the necessary human resources for its management, cultivatethem to make them capable of management, and establish the structure for generating funds through thebrand management.

Figure 7-2 Issues on the downstream of value chains
Issue 1 Undeveloped Ethiopian Highland Leather Brand Management/Promotion Systems
Among producers’ organizations in Ethiopia, ELIA has a relatively established organizational
structure, with about 65 member companies and 4 dedicated secretaries (a secretary general, a person in
charge of a share company, a person in charge of the AALF, and an accountant). The main promotional
activities carried out by ELIA so far include product displays at overseas exhibitions and the organizationof the AALF in Addis Ababa. For the AALF, 4,000,000ETB (approx. USD 159,000) had been allocatedin its budget every year, yet the event defied the huge cash injection by remaining quiet and did not139

functioned as a venue for business meetings and networking, which is why MOI and other donors
suspended their financial support. The AALF has not been organized since 2015. Thus, a turnaround
effort must be made to improve ELIA’s capabilities to fund and organize exhibitions to support therespective companies’ PR activities.
ELIA has been expected to play the role of brand manager of the Ethiopian Highland Leather.
In order to maintain the brand, it is imperative to establish a brand management system and strategy
within ELIA to encourage more companies to make use of the brand, so that revenues can be increased
to cover budgetary needs. For this purpose, inner branding of the secretary general and ELIA staff,
recruitment of professional staff, and education for the secretary staff on marketing and brandmanagement will be necessary.
Recommendation 1-1 for strengthening ELIA’s organization as the brand management body
To recruit and foster the fulltime staff to strengthen the management/promotion capabilities of ELIAIn CPA Phase 2, under the strong leadership of ELIA’s president, the work was initiated to set
up Ethiopian Highland Leather’s brand management structure, with ELIA being at its center. In order for
ELIA to become a fully-fledged Ethiopian Highland Leather brand manager on its own, it needs to secure
human resources and build its brand management capacities. With regard to Ethiopian Highland Leather’s
PR campaigns, ELIA should plan and run these campaigns on its own, become exposed to overseas
exhibitions, and accumulate knowledge (such as utilizing business templates and know-how ofpromotional tool preparation) as an organization. Also, at the beginning of the brand operation, theactivity may be stalled due to a shortage of funds, so support from the government for overseas
exhibitions is also expected. Aggressive brand application by ELIA’s member companies is also
important. The following are the expected roles and contributions of each stakeholder, divided into thegovernment, the industry, and the companies.
Government:

Support promotional activities, including overseas exhibitions.

Industry:

Employ dedicated staff; plan and implement various promotional activities (develop
promotional tools such as business templates and VM).

Companies:

Make use of the brand for their own products

Recommendation 1-2 for strengthening the support mechanism of LIDI
To establish a certification system within LIDI for Ethiopian Highland Leather companies and improve
LIDI’s testing capabilities

It would be effective to establish a brand certification system to widely disseminate the Ethiopian
Highland Leather brand and prove the products’ quality as well as the companies’ technical capabilities.
LIDI clarified the certification process during CPA Phase 2; however, it has not been practiced until now
because LIDI has not established a substantial structure. It is necessary to organize a substantial structure140

within LIDI for practicing this brand certification system. In addition, it will also be useful to facilitate
collaboration between LIDI and foreign research institutes, e.g., by conducting inter-lab comparisons oftest results to improve LIDI’s testing and analyzing capabilities.
Government:

Strengthen LIDI’s structure for the brand certification system and improve LIDI’s
testing and analyzing capabilities.

Industry:

Encourage ELIA member companies to apply the brand certification.

Companies:

Apply for the brand certificate.

Recommendation 1-3 for strengthening relationship among relevant ministries/institutes
To involve relevant organizations such as Ethiopian diplomatic missions to build acollaborative framework with the Ministry of Foreign Affairs and Ministry of Trade
It is of critical importance to collaborate with Ethiopian diplomatic missions stationed in various
nations in order to undertake export promotion PR campaigns overseas. Ethiopian embassies providing
information and explanations of import/export procedures would increase trust in Ethiopian companies.
In addition, the necessity of involving the MOT, which is responsible for export promotion, was debatedrepeatedly in CPA Phase 2. Collaboration with the Ministry of Foreign Affairs and the Ministry of Tradeis important for expanding promotion opportunities for future champion products and for expanding
activities to other sectors in order to implement cross-industry export promotion measures.
Government:

Involve Ethiopian diplomatic missions stationed overseas in branding promotional
activities. The MOT should offer opportunities to promote the Ethiopian Highland
Leather brand. Plan and implement cross-sector CPA.

Industry:

Ask Ethiopian diplomatic missions stationed overseas for their cooperation when a
PR campaign is to be organized overseas.

Recommendation 1-4 for monetization of Ethiopian Highland Leather brandTo establish a basic system of finance resources by registering membership companies
It is necessary to make a system with which ELIA can earn income through branding activities.
For example, Imabari Towel in Japan – a successful case of regional brand development – obtains financial
resources for brand management by selling brand tags to member companies and operating shops. It is
important to learn from such precedents. In addition, ELIA should promote more companies to be involved
in Ethiopian Highland Leather branding activities.
Industry:

Implement monetizing activities for the brand, e.g., by selling brand tags, andpromote the involvement of more companies in branding activities.

141

Issue 2 Lack of awareness of legal knowledge related to brands and differences inbusiness cultures and business habits
During the course of trading with Ethiopian companies, customers became stressed due tobelated responses to orders and inquiries as well as failures in ordering accurately. An estimate asked forby the client was inaccurate, with necessary information missing. Several emails needed to be exchanged
to deal with a very simple matter. There are cases where Japanese companies, although willing to entera trade on a provisional basis, gave up before concluding a contract. Incorrect information about
remittance procedures, failure to keep delivery dates, and mistakes in quantities or colors of samples
were among the troubles that took place even after a trade was entered. The low recognition of theimportance of handling the brand logo and the copyright of the designs is also a future issue.
Recommendation 2 for strengthening support for business promotion and smoothing distribution
To set up a counseling window, hold business seminars, and train personnel through related
ministries (MOT, EIC, LIDI, etc.) for foreign trade and business

It would be effective to set up a counseling window and hold business seminars by related
ministries/institutes to supplement the insufficient knowledge among companies in Ethiopia oninternational business and enhance the recognition of intellectual property management to manage thebrand properly. The One Stop Shop Services already implemented by EIC to provide information toforeign companies would be a good example to simulate for such counselling services.
Government:

Set up a counselling window and hold business seminars (information collection on
overseas markets, promote the window and the seminars among domestic companies, etc.).

Industry:

Share the information and problems of Ethiopian leather industry with the government

7.1.2 Remaining issues and recommendations on the midstream of the value
chainsNot only product development but also quality improvement and reduction of minimum order
quantities are required in the midstream of the value chains. LIDI’s support for companies during the
production process to penetrate overseas markets is also an important challenge.

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Figure 7-3 Issues on the midstream of the value chains
Issue 3 Companies' low product development capacity and low product quality
The respective Ethiopian companies lack the basic skills to develop products and to flesh out
their production management structure. Nowadays, following participation in overseas exhibitions andwith assistance from not only JICA but also other donors and the government of Ethiopia, many
manufacturers in developed nations have expressed their interest in Ethiopian leather industry companies.
Yet, due to the inferior levels of basic product development and production management, there have beencases where products were found to be defective and/or Ethiopian companies failed to meet a deadline.
Efficiency improvement of production and reduction of the mistake rate by kaizen activities
currently undertaken in Ethiopia have contributed greatly quality to improvements in companies’
production activities. However, in order to improve techniques such as cutting, sewing, and making
shoes, technicians with enough skills for making apparel and leather products are needed.
Recommendation 3-1 for strengthening the technical capacity of companies
To dispatch the experts for technical assistance to partner companies (tanneries and leather products
manufacturers) and implement overseas training

During CPA Phase 2, it was observed that Ethiopian leather engineers do not have enoughunderstanding about the requirements of the Japanese market. The government should employ or utilize
leather engineers who know the market well to support private companies.
Technical assistance from LIDI is fundamental. The capacity is still low for providing
information on overseas markets, guidance on design and technology, and advice on corporate143management, for example, as required by Ethiopian companies that are going to expand into overseas
markets. The Product Development Center (PDC) in LIDI is the department in charge of design support
to the companies; however, the staff has not been able to grasp the trends in overseas markets. The main
reason is that they have had almost no opportunities to gain experience with and learn from visiting thetarget market. On the other hand, designers and production line managers working in Ethiopian
companies also have few opportunities to directly see the products sold in Europe, the US, and Japan.
In order for Ethiopian companies to develop products for developed country markets, it isnecessary for each company to nurture and/or hire staff who know the target market’s trends well. The
government and public institutions need to invite engineers from overseas to provide support fortechnology and knowledge improvement.
In addition, it is desirable for the staff and engineers who are making the products in factories
to also have the opportunity to participate in overseas exhibitions. Many of them have felt that theirproducts do not meet the quality level applied in developed countries, but they have not known exactly
where the difference lies.
Government:

Dispatch experts to Ethiopian companies who know the quality levels applied indeveloped countries.

Industry:

Plan and implement overseas training programs; send companies’ representatives tointernational exhibitions.

Company:

Send staff overseas; employ foreign and/or diaspora engineers.

Recommendation 3-2 for strengthening LIDI’s capacity for supporting companies
To provide OJT and overseas training for LIDI staff

It is important to develop LIDI’s capacity for improving the technical strength of domestic
companies because LIDI is responsible for technical assistance to private companies in the leather sector.
It will be effective to involve LIDI staff in the technical assistance activities presented in Recommendation
3-1 and then improve the staff’s ability to support companies. LIDI staff should also be involved in the
preparation of and product development for displays at overseas exhibitions planned by ELIA and/or thegovernment, so that they would work with dispatched experts to develop products.
Government:

Implement an OJT program for LIDI’s staff when LIDI dispatches foreign engineers
to Ethiopian companies; involve LIDI’s staff in preparing overseas exhibitions.

Companies:

Participate in OJT programs; share achievements and issues with LIDI.

Issue 4 Insufficient capacity of middle-level management professionals
The top-level managers in the respective companies may be extremely capable, but many ofthese companies often lack the frontline staff to take charge of production. Even if business negotiations

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conclude successfully, trouble occurs during the production phase, which results in a large recall, or an
order may not be placed on a continuous basis due to a failure to send samples that meet customers’
specifications. This is partly attributed to a lack of middle-level managers, such as a plant manager, adirector in charge of production section, or a director in charge of processing contracts and orders.
Recommendation 4 for strengthening middle-level management in the company
To Train (including OJT programs) middle-level management professionals for operational
management and quality control and set target for management items within the companies
It is necessary to clarify the problems and management items within the companies and work toaccomplish the management items. The government and public institute are expected to support training,
including OJT programs for middle-level management professionals.
Government:

Implement training, including OJT programs, for middle-level management professionals.

Industry:

Implement training, including OJT programs, for middle-level management professionals.

Company:

Clarify the problems among intermediate management personnel; set targets for
management items.

Issue 5 Difficulty in procuring quality accessories in Ethiopia
Among the leather products produced in Ethiopia, shoes are promising items because they canbe made with a small amount of leather materials and the production costs are not affected by the price ofexpensive sheep leather. They can also benefit from preferential tax treatment for least developed countries.
However, many kind of accessories are necessary for shoe production, such as soles, core material, andshoelaces. In Ethiopia, manufacturers must import such accessories because there are few high-quality
accessories, even though there are some accessory manufacturers in Ethiopia. In the case of imports,
companies are required to buy a certain amount of accessories; hence, the bulk of the business with final
buyers tends to be large, creating a challenge for the business in dealing with buyers.
Recommendation 5 for improvement of domestic accessory quality
To organize a joint purchasing group by ELIA

ELIA operates a share company to purchase chemicals for leather processing. Utilizing this sharecompany for purchasing accessories would be the solution to the problem. It is possible for the sharecompany to lease the inventory risk by conducting a needs survey with manufacturers. The company canstart by buying accessories that are easy to sell and manage.
Industry:

Implement a needs survey for manufacturers; expand the items managed by ELIA’s
share company.

Companies:

Utilize ELIA’s share company to buy accessories.

1457.1.3 Remaining issues and recommendations on the upstream of the value
chainsOn the upstream of the value chains, CPA Phase 2 involved conducting research to understandthe obstacles. Improving the quality of raw materials in the upstream of the value chains seems necessary
to improve the quality of Ethiopian sheep leather and add value to it. Improvements in raw materials will
not only lead to quality improvements of leather materials and products but also increase the distributionof leather materials and products as well as settle the problems involving the minimum order quantity forleather materials and products, which sometimes becomes the barrier for business with Japanese buyers.

Figure 7-4 Issues in the upstream of value chains
Issue 6 Unstable supply of high-quality raw skin in the upstream value chain
Alongside the product quality improvement, ensuring a stable supply of high-quality rawhide
is another important issue to overcome in order to improve the Ethiopian Highland Leather brand’s added
value. Japan and other developed countries demand high-quality leather, which makes up no more than
10%–20% of the whole range of tanned leather. 40%–60% of raw skin supplied to tanners can be used
only for shoe lining. Raw skin with wool does not reveal much about its true quality even when its flesh
side is inspected. On the other hand, because salt is used repeatedly for raw skin preservation, raw skinoften ends up being contaminated with bacteria and becoming rotten. Compared with the price of sheep
meat, the price of raw skin is very low. Due to the few economic incentives, it is difficult to request that
farmers breed sheep in appropriate ways (e.g., by utilizing anti-parasitic drugs or reducing excessive
whipping) for improving the quality of the raw skin.
The quality control problem for raw skin in the upstream deteriorates the yield of tanneries andforces them to sell leather material in a package comprising different grades (a mixture of grades is sold146

in a package, and buyers cannot purchase only the particular grade(s)/s they want). Ethiopian domestic
leather manufacturers are also forced to purchase low-quality leather materials that they did not originallyneed. As a result, stock risk is added to the product price, in which decreases their price competitiveness.
Recommendation 6-1 for conducting detailed research
To verify the effectiveness of sustainable modern breeding methods, and disseminate the modern
breeding methods to tanners/large-scale farmers
The issue of minimum order quantity mentioned in the downstream and the middle stream arelargely attributable to the limited circulation of high-quality raw skin. During CPA Phase 2, the Japaneseexperts heard that Pittards had launched a trial farm with modern breeding methods in around 2010. In
the trial firm, the sheep grew up larger, with a weight nearly twice the usual, and the proportion of highquality leather (grades 1–3) jumped to 60–70%; however, the trial firm was suspended afterwards due toissues involving land lease rights. This information is limited, and the actual effects are uncertain. Suchmodernized methods of breeding sheep would be the solution to the problems in the upstream of value
chains. It is necessary to conduct more detailed research on this approach.
Government:

Implement research to grasp problems and consider solutions in the upstream value
chain; share the results and issues of the breeding methods trial.

Recommendation 6-2 for improvement of raw skin quality
To prepare the breeding environment to improve the quality of raw skins in cooperation, with MOLF
The MOLF must consider its agricultural policy to improve breeding environments, including
obligations regarding the usage of anti-parasitic drugs for livestock. The incentives to follow this policy
should be understood by farmers, who should implement the policy. In consideration of the current market
structure, in which raw skins are very cheap, it is important to indicate to the farmers the harmful effectof parasites on the fattening rate and growth speed of livestock.
Government:

7.1.4

Consider policy for preparing good breeding environments for livestock.

Issues in the practices of cross-sectoral CPA
With regards to cross-sectoral CPA implementation, the overall export promotion agency in

Ethiopia should take the initiative.

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Figure 7-5 Issues in the practices of cross-sectoral CPA
Issue 7 Autonomous operation of the “Creativity in Motion” brandRegarding the branding of Creativity in Motion, through the CPA Phase 2 activities, the relevant
ministries and agencies have understood the usefulness of CPA and are interested in further developmentof the CPA as an option for industrial development and export promotion. In addition, by creating a brandvideo together with Japanese creators, the brand and vision were shared, and collaboration between therelevant government ministries and agencies – as well as public–private partnerships – was also advanced.
The Ethiopia side should promote cross-sectoral brand management and PR activities, such as bypublishing brand videos; however, this is still not self-propelled. In addition, efforts to continuously
maintain and manage brands, such as human resource development, involvement of stakeholders, andinstitutional improvements, have not been initiated. The operational issues of brand videos and websites
in cross-sectoral CPA activities are as follows:
Table 7-1 Issues to overcome in order to attain self-propelled branding
Items
Issues onbrand video
operation

Issues• As it took a long time to accept the brand video by the EIC, it wasdelayed to involve relevant ministries and organizations for the video
usage.
•PR release was scheduled to take place in Ethiopia at the time ofcompletion of the video, but did not happen. As waiting for the releasein Ethiopia, the release in Japan was late. This affected the intended
impact of launching the CPA 2 with the video.

• Leader of the EIC, which had been promoting the production of the video,
suddenly resigned from the EIC. Then, his successor was not appointed
on time in EIC. It caused the delay of appointing a video administrator for
its effective use.
Issue onweb site
operation• Instagrammers for communication environment and other industries(other than leather) have not been determined for the HP of CPA2.
Therefore the HP was not updated as often as it was intended at first.

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The fact that the MOCT and other ministries have undertaken branding initiatives and createdpromotion videos to send out messages on an individual basis should be appreciated in terms offacilitating understanding the importance and implementation of branding and a PR campaign. In termsof leveraging “Creativity in Motion” to build a cross-sectoral brand, the government is expected todeepen collaboration with these movements and deepen cross-sectoral brand management efforts toensure that messages are correctly delivered to the target (consumers and buyers).
Recommendation 7-1 for utilization of “Creativity in Motion” promotional tools
To start “Creativity in Motion” promotional activities
The cross-sectoral PR campaign in CPA Phase 2 focused on setting tools in place. Various
options were discussed with regard to promotional activities and the use of tools, but it was left to the
Ethiopian side to put these options into practice. In the future, the government and stakeholders need tothoroughly examine PR campaign methods to identify the person(s) in charge, secure budgets, and comeup with a feasible action plan.
As seen in the Ethiopian Highland Leather case, achieving a small but real result leads to thesharing of success stories, thereby allowing the Ethiopian side to take initiative. Should the Ethiopianside fail to build on these success stories and show initiative, it would be difficult to set up an autonomous
structure to carry out cross-sectoral PR campaigns. With sharing outcomes in the Ethiopian Highland
Leather, it is certainly important to put the plan into practice.
Government:

Centralize the brand management structure and clarify the role of this structure;
convene regular ICCPA meetings.

Recommendation 7-2 for cooperation with relevant ministries
To share the brand concept between different ministries and agencies to create uniformity intheir promotional activities under the “Creativity in Motion” branding
The MOCT tourism brand “Land of Origin”10 and the creation of a promotional video by the
MOT are a few examples of various Ethiopian ministries and agencies sending messaging to overseas
markets and investors. The “Creativity in Motion” branding is focused on industrial-sector branding(manufacturing branding). By bringing “Creativity in Motion” into alignment with PR campaigns
undertaken by relevant ministries and agencies, the brand will communicate stronger messages.
Government:

Set up a system to share the brand concept and reference materials produced between
different ministries and agencies.

Industry:

Collaborate with the government, make proposals to the government in a proactive

10

http://www.moct.gov.et/index.php/en/home-2-en/10-msg-cat/156-ethiopia-announced-new-tourism-brand(browsed on 26th March 2016)149

manner, and discuss with the government.
Recommendation 7-3 for sharing success stories
To organize seminars to introduce the case of Ethiopian Highland Leather while utilizing theactivities as a success story (by the MOT, MOFA, and EIPO)
For Ethiopian stakeholders that have had few opportunities to be exposed to successful brandstrategy cases, Ethiopian Highland Leather is one of a handful of domestic cases that not only motivatesthem but also serves as a reference for target setting and developing methods in the future.
Government:

Have the MOT, MOFA, and EIC organize seminars, during which stakeholders in theleather sector introduce the Ethiopian Highland Leather case.

Industry:

7.2

Introduce the Ethiopian Highland Leather case.

Conclusion
Cooperation among industry, government and the private sector in the implementation of the

CPA and of discussions toward solving issues and specific activities brought about great success during
CPA Phase 2. As part of the efforts to promote the export of sheep leather products to Japan, the successful
experiences that Ethiopian companies achieved in trading with Japanese companies served as considerable
driving forces for stakeholders understanding the CPA’s purpose and for promoting participation in the
CPA.
There are mainly three possible reasons why the CPA generated a significant outcome. First, atarget sector was determined logically based on market research. With the Japanese market as a target
market, Ethiopian stakeholders and Japanese experts selected sheep leather as a high-potential target
product, in light of the results of a feasibility study, to enter the market and a level of industry developmentin Ethiopia. As a result, a new brand – Ethiopian Highland Leather, made of Ethiopian sheep leather –was inaugurated, and then it developed products closer to the vehicles of the brand message.
Second, strong motivation by partner companies to participate in CPA activities led to the successof CPA Phase 2. The partner companies selected in the CPA Phase 2 continued to practice the CPA withpatience to proceed successfully in their dealings with Japanese companies, while overcoming several
failures in trading due to having less understanding about Japanese business customs. Such highmotivation can be generated by the successful experiences accumulated through face-to-facecommunication with Japanese buyers in the process of “Make what we can sell.”Third, a close cooperation and coordination with relevant current agencies and ministries was
fostered. In the project aimed at branding Ethiopian sheep leather, which is politically and culturally
important, the outcome of the activity was appealing not only for individual companies but also for the150

outcome of the whole industry. As a result, it became possible to show the significance of CPA activities
to relevant organizations, ministries, and agencies, and to foster their initiatives.
Currently, the cooperation and understanding of the government, industry, and private sector in
Ethiopia has been obtained to continue with the CPA activities in Ethiopia. As for the sheep leather
products, export transactions with Japanese buyers have proceeded. It would be a pleasure if the futureissues and recommendations based on the activities and outcomes from this phase are helpful for the next
phase of activities.

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Appendix

Appendix 1: Brand video (Story board)

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Appendix 2: Brand book

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Appendix 3: Mini leaflet

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Appendix 4: Brand leaflet

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Appendix 5: Poster

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Appendix 6: Certificate of trademark registration

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Appendix 7: Media exposure in Japan

2015.7.16

Senken Shinbun“’Ethiopian Highland Leather’ branded by JICA’s support. 9

companies participate in JFW-IFF July Expo”

2015.8.20

Asahi Shinbun “Ms. Meron Seid – Expands to International Market with High-

Quality Ethiopian Sheep Leather Bag”
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2015.9.11

Yomiuri Chukosei Shinbun “Ethiopia: Soft and High-Quality Sheep Leather”

1772016.4.22

Ehime Shinbun “Learn the Strategy of Sheep Leather Branding”

2016.4.26

Senken Shinbun”High-quality international companies participate”

2016.4.27

Senken Shinbun“Visitor’s Voice”

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