Kenya has rolled out plans to build a $164 million leather industry park to transform the underdeveloped industry into a key economic contributor.

The EastAfrican has established that the government has spent about $5.7 million in preliminary works including feasibility studies, development of a master plan and conducting a strategic environmental impact assessment for the proposed park.

Last week, the government embarked on phase two of the project after putting out tenders seeking a contractor to build a common effluent treatment plant at an estimated cost of $9.6 million.

“The leather park is a priority project because we want to grow the industry and make it competitive,” said Dr Issack Noor, chief executive of the Kenya Leather Development Authority.

But even as the government pushes ahead with the project, industry players contend the park risks becoming a white elephant unless relevant laws are enacted to protect the industry and investors.

Already, a precedent has been set after the government invested $144,781 in six mini-tanneries in various parts of the country in 2012 that are now operating at below 15 per cent of their capacity.

Robert Njoka, Tanners Association of Kenya chairman, said the park will not attract investors unless laws are enacted to protect the industry from cheap imports and the government cracks down on smuggling of hides and skins.

Besides, the government must ensure the 80 per cent duty on exports of raw hides and skins is implemented to ensure the local industry has an adequate supply of raw materials.

This is critical considering that currently, the existing 14 tanneries in Kenya are operating at less than 40 per cent of their capacity due to lack of a reliable supply of raw materials and are often forced to import from neighbouring countries.

“Building a leather industrial park will be wasting money. Kenya cannot attract investors because the industry has not been secured by law,” Mr Njoka said.

He added that due to lack of a concrete law and policies for the leather industry, the park is being built under the setup of the Export Processing Zone Act even though 90 per cent of the products will be for the local and regional markets and only 10 per cent for the export market.

In building a leather industrial park, Kenya wants to unleash the potential of the industry, which has remained stunted due to pressure from imports that have largely wiped out the local market.

READ: Kenya looks to grow leather export sector with 500ha industrial park

More importantly, the country wants to use the park to tap into the regional market and also compete with Ethiopia, which has become a powerhouse in the leather industry in less than a decade.

Globally, the leather industry is estimated to be worth $100 billion and despite Africa owning a fifth of the global livestock population, the continent accounts for a paltry 4 per cent of world leather production and 3.3 per cent of value addition in leather.