ANIMAL LEATHER TANNING & EXPORT BUSINESS PLAN

TABLE OF CONTENTS

1.1 Executive Summary

1.2 Business Name & Legal Identity

1.3 Business Location & Justification

1.4 Products & Product Range

1.5 Vision Statement

1.6 Mission Statement

1.7 Core Values

1.8 Business Objectives

1.9 Industry Overview: Leather Sector in Nigeria

1.10 Market Opportunity

1.11 Competitive Advantage

1.12 Processing Capacity (Initial)

1.13 Processing Technology

1.14 Regulatory & Export Compliance

1.15 Employment Generation

1.16 Social & Economic Impact

2.1 Overview of the Global Leather Market

2.2 Global Leather Market Segmentation

2.3 Global Importing Regions for Wet Blue & Finished

Leather

2.4 Nigerian Leather Export Performance

2.5 Kano State as Nigeria’s Leather Export Hub

2.6 Raw Material Supply Analysis

2.7 Pricing Analysis (Export Market)

2.8 Competitive Landscape in Nigeria

2.9 SWOT Analysis

2.10 Target Market Segmentation

2.11 Customer Profile (Export Buyers)

2.12 Marketing & Sales Strategy

2.13 Demand Forecast (5 Years)

2.14 Export Incentives & Support

3.1 Overview of Production Operations

3.2 Production Capacity & Throughput

3.3 Site Layout & Facility Design

3.4 Production Process Flow

3.5 Machinery & Equipment List (₦ Estimates)

3.6 Utilities & Infrastructure

3.7 Effluent Treatment & Environmental Compliance

3.8 Raw Material Procurement Strategy

3.9 Quality Control & Standards

3.10 Staffing & Manpower Requirements

3.11 Training & Capacity Building

3.12 Health, Safety & Risk Control

3.13 Production Timeline

3.14 Scalability & Expansion Plan

4.1 Financial Planning Assumptions

4.2 Capital Expenditure (CAPEX)

4.2.1 Land & Site Development

4.2.2 Buildings & Civil Works

4.2.3 Machinery & Equipment

4.2.4 Pre-Operational Costs

4.3 Working Capital Requirement

4.4 Total Project Cost

4.5 Operating Cost (Annual OPEX – Year 1)

4.6 Revenue Projections

4.7 Profit & Loss Summary

4.8 Cash Flow Highlights

4.9 Break-Even Analysis

4.10 Investment Returns

4.11 Funding Structure (Suggested)

4.12 Sensitivity Analysis

27.1 Raw Material Supply Risk

27.2 Environmental & Compliance Risk

27.3 Market & Export Risk

27.4 Operational & Power Risk

27.5 Financial & FX Risk

28.1 Environmental Sustainability

28.2 Social Impact

28.3 Governance Structure

29.1 Project Implementation Schedule

29.2 Key Milestones

30.1 Phase II (Year 3–4)

30.2 Phase III (Year 5+)

31.1 Key Performance Indicators

1.1 Executive Summary

The Animal Leather Tanning & Export Business seeks to establish a medium-scale modern tannery in Kano State, Nigeria, specializing in the processing of raw hides and skins into Wet Blue and Finished Leather for export to Europe, Asia, and the Middle East.

Nigeria is one of Africa’s largest producers of hides and skins due to:

• Large livestock population
• Strong cultural meat consumption
• Year-round slaughter activities

Despite this advantage, Nigeria exports mostly raw or semi-processed hides, losing significant value. This business addresses that gap by converting raw hides into export-grade leather, thereby:

• Earning foreign exchange
• Creating skilled employment
• Supporting Nigeria’s non-oil export diversification

1.2 Business Name & Legal Identity

Proposed Business Name:
Arewa Prime Leather Tanning & Export Limited

Legal Structure:
Private Limited Liability Company (Ltd.)

Registration:
Corporate Affairs Commission (CAC), Nigeria

1.3 Business Location & Justification

Proposed Location:
Challawa Industrial Estate, Kano State, Nigeria

Location Advantages

• Proximity to major abattoirs (Kano, Katsina, Jigawa)
• Existing tannery infrastructure
• Access to skilled labor
• Established export logistics routes
• Presence of regulatory agencies

1.4 Products & Product Range

Primary Products

• Wet Blue Cow Hides
• Wet Blue Goat & Sheep Skins

Secondary Products (Phase II)

• Crust Leather
• Finished Leather (shoe, upholstery, garment grade)

By-Products

• Tallow
• Trimmings (industrial use)

1.5 Vision Statement

To become a leading exporter of high-quality Nigerian leather, meeting global standards while promoting sustainable and ethical tanning practices.

1.6 Mission Statement

To process locally sourced hides and skins into premium leather using environmentally responsible tanning technologies, supplying global markets reliably and competitively.

1.7 Core Values

• Quality excellence
• Environmental responsibility
• Ethical sourcing
• Transparency
• Export competitiveness

1.8 Business Objectives

Short-Term (Year 1–2)

• Establish operational tannery
• Export Wet Blue leather consistently
• Secure long-term export buyers

Medium-Term (Year 3–4)

• Add crust and finished leather lines
• Expand export destinations

Long-Term (Year 5+)

• Backward integration into collection centers
• Forward integration into finished leather goods

1.9 Industry Overview: Leather Sector in Nigeria

Nigeria produces over:

• 20 million cattle hides annually
• Over 100 million goat and sheep skins

Kano State accounts for a significant share due to:

• Large abattoirs
• Long-established leather ecosystem

However:

• Many tanneries operate below capacity
• Export bans on raw hides encourage local processing
• Global demand for ethically sourced leather is rising

1.10 Market Opportunity

1.11 Competitive Advantage

• Proximity to raw materials
• Lower processing cost
• Skilled workforce
• Export incentives (NEPC, NEXIM)
• Strategic Kano location

1.12 Processing Capacity (Initial)

1.13 Processing Technology

Phase I

• Chrome tanning (Wet Blue)

Phase II

• Vegetable tanning & finishing (export grade)

1.14 Regulatory & Export Compliance

• CAC registration
• NEPC exporter certificate
• Nigerian Customs export documentation
• NESREA environmental approval
• Kano State Ministry of Environment clearance

1.15 Employment Generation

1.16 Social & Economic Impact

• Job creation
• FX earnings
• Reduced raw hide export
• Skills development
• Industrial revitalization of Kano

2.1 Overview of the Global Leather Market

The global leather industry remains a multi-billion-dollar value chain, driven by demand from:

• Footwear manufacturing
• Automotive upholstery
• Fashion and luxury goods
• Furniture and interior décor

Despite growing alternatives, natural leather remains irreplaceable in durability and luxury segments.

Global Demand Drivers

• Rising footwear consumption in Asia
• Growth of automotive interiors
• Preference for ethically sourced leather
• Increasing demand for traceable supply chains

2.2 Global Leather Market Segmentation

By Processing Stage

Nigeria’s comparative advantage currently lies in Wet Blue and Crust leather, with growing potential in finished leather.

2.3 Global Importing Regions for Wet Blue & Finished Leather

Key Import Markets

China alone absorbs over 35% of global Wet Blue imports, making it Nigeria’s primary export opportunity.

2.4 Nigerian Leather Export Performance

Nigeria is among Africa’s top leather producers but exports mostly semi-processed leather.

Key Export Characteristics

• Export volumes fluctuate due to policy instability
• Majority of exports are Wet Blue hides
• Export bans on raw hides encourage tanning

Export Destinations

• China (largest buyer)
• Italy
• Turkey
• Vietnam

2.5 Kano State as Nigeria’s Leather Export Hub

Kano State has been Nigeria’s leather capital for decades.

Key Advantages

• Concentration of abattoirs
• Established tannery clusters
• Leather Research Institute proximity
• Export logistics infrastructure

Industrial Zones

• Challawa Industrial Estate
• Sharada Industrial Area

2.6 Raw Material Supply Analysis

Livestock Availability (Northern Nigeria)

Raw Hide Sources

• Kano abattoirs
• Katsina & Jigawa slaughterhouses
• Niger Republic cross-border trade

Supply is year-round, with peak volumes during festive seasons.

2.7 Pricing Analysis (Export Market)

Average Export Prices (Wet Blue)

(Indicative – subject to grade & thickness)

Finished leather attracts premiums of 30–60%.

2.8 Competitive Landscape in Nigeria

Major Players

• Existing Kano tanneries (mostly under-utilized)
• Small-scale processing units
• Few vertically integrated exporters

Competitive Gaps

• Poor quality control
• Environmental non-compliance
• Limited finished leather production

Arewa Prime Leather will compete on:

• Consistent quality
• Environmental compliance
• Reliable export delivery

2.9 SWOT Analysis

2.10 Target Market Segmentation

Primary Target Markets

• Chinese tanneries & manufacturers
• Italian leather processors
• Turkish footwear manufacturers

Secondary Market

• Nigerian footwear and upholstery manufacturers

2.11 Customer Profile (Export Buyers)

2.12 Marketing & Sales Strategy

Export Marketing Channels

• Direct B2B contracts
• Trade fairs (Lineapelle, APLF Hong Kong)
• NEPC export missions
• Agents and brokers

Sales Strategy

• Competitive pricing
• Long-term supply contracts
• Consistent quality grades

2.13 Demand Forecast (5 Years)

2.14 Export Incentives & Support

• NEPC Export Expansion Grant (EEG)
• NEXIM export financing
• Afreximbank trade finance
• Duty waivers on machinery

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