BUSINESSS PLAN

INDUSTRIAL OVERVIEW

Tanzania is second country to have large livestock population in Africa, behind

Ethiopia. Despite such livestock wealth Tanzania has, the contribution of
leather sector in national GDP is really smallest. More efforts in improving
leather value chain is very important to make the sector vibrant.

Traditional based animal husbandry practices, poor slaughtering facilities, old

technologies in both tanning and leather manufacturing industries are some of
constrains along value chain that limit the development of Tanzania leather
sector. Intervention by the Government and other leather stakeholders to
improve leather value chain should be enhanced.

Livestock keeping is a cultural lifestyle of many Tanzanian communities and it

is a major source of about 1.7 million household’s income (World Trade
Organization, 2012). Most livestock keepers are smallholder farmers.
Commercial ranching is practiced by state owned ranch and it accounts for
only 7% of all livestock. Large population of livestock supply milk, meat and
hides and Skins which have impact in nation economy. Since hides and skins
are raw materials for production of finished leather and leather products such
as shoes, gloves, garments, wallets and bags. Tanzania has a potential to invest
in leather industry that will eventually boost national economy and people’s
well-being. Unfortunately, the opportunity is underutilized due to existence of
some barriers. In Gross Domestic Product (GDP), Tanzanian’s leather sector
contributes only 2% (REPOA, 2015). The reason is less effort applied to the
sector to connect the potential values of leather in economic growth (Kalagho,
2014). While in Ethiopia, leather sector contribute 80% of the GDP (Ruhasha,
2014).

The history of Tanzania leather sector can be traced back from independent
era in 1960’s. Government invested in leather and footwear industries for
three main reasons: creation of employment opportunities; adding value to
the Tanzanian raw hides and skins; and developing products that could
substitute imported leather products (IBP, 2015). During Structural
Adjustment Program and liberalization in mid 1980s’, the sector was largely
affected by free trade across countries, poor management, lack of expertise
and capital (IBP, 2015). As the result government decided to privatize leather
industries with the aim of boosting contribution of leather sector in economic
growth. Nevertheless, privatization didn’t work since factories failed to
perform at their fullest capacity while others gone United Republic of
Tanzania her to be closed (Ministry of Industry and Trade, 2011).

Currently, the performance of leather processing industries is low and need to

be revived so as to match with the available raw materials wealth. Tanzania
leather sector has huge opportunity to expand and become a reliable supplier
of leather and leather products in the region and world at large. The leather
processing business is a profitable industry and it is open for any aspiring
entrepreneur to come in and establish his or her business and still compete
for the available market and make profits.

EXECUTIVE SUMMARY

Joreno Vegetable Leather Tanning Firm is the licensed leather processing and
manufacturing firm that will be located in a Mbeya city. It is easily accessible
so facilitate smooth movement of raw materials and finished products.

We are in the leather tanning and finishing firm to engage in tanning hides and
skins, currying hides and skins, finishing hides, skins and dyeing. We enter in
business to make profits and satisfy our customers.

We are aware that there are several leather tanning, finishing and
manufacturing firms scattered all around the United Republic of Tanzania
whose products can be found in streets and villages, which is why we spent
resources to conduct our feasibility studies and market survey so as to enable
us locate the business in an area that will support the growth of business and
for us to be able to offer much more than our competitors.
Joreno Vegetable Leather Tanning Firm is easy to locate and we have mapped
out plans to develop a wide distribution network for retailers and wholesalers
all around Mbeya city and nearby towns.

Beyond manufacturing quality and safe leather, our customer care is going to
be our priority. We know that our customers are reason why we are in
business which is why will work hard to make the satisfied when they
purchase our products.

Joreno Vegetable Leather Tanning Firm is a partnership that will be owned by

Joseph Paschal Lilo. Joseph Paschal Lilo is the certificate holder of Animal
Health and Production from Tengeru College and he hold a diploma in Animal
Production from Mpwapwa college. He has over 5 years’ experience working
in related leather activities. He will be working with a team of professionals to
build the business.

OUR PRODUCTS

Joreno Vegetable Leather Tanning Firm is going to run a standard leather

processing and manufacturing firm whose products will not only be sold in
Mbeya city but also through the United Republic of Tanzania. We are the
leather tanning, finishing and manufacturing firm to make profits and also to
give our customers value for their money. These are some of the products that
we will be offering:

 Wallets
 Belts
 footwear
 gloves
 bags
 Key holders

OUR VISION
Our vision is to establish quality leather processing and manufacturing firm
who products will be sold throughout the United Republic of Tanzania and
neighbouring countries.

OUR MISSION STATEMENT

Our mission is to establish a country class leather processing firm that in our
own capacity will constructively compete with leaders in leather industry.

OUR BUSINESS STRUCTURE

Joreno vegetable leather tanning Firm is established with aim of competing

with other leading leather processing and manufacturing businesses.That is
why we put in a place formal structures that will ensure our business growth.
We will make sure that we only hire people that are qualified, honest,
hardworking, customer centric and are ready to help us build a prosperous
business that will benefit all our stakeholders.

Positions:

 Chief Executive Officer

 Plant Manager
 Human Resource Manager
 Sales and Marketing Manager
 Machine/tool operators
 Accountants

Roles and Responsibility

Chief Executive Officer
 Increase management’s effectiveness by
recruiting,selecting,orienting,training,coaching,counseling,displini
ng managers; communicating values, strategies and objectives,
assigning accountabilities; planning, monitoring, evaluation,
appraising job results, developing incentives; creating a climate
for offering information and opinions.
 Responsible for fixing prices and signing business deals.
 Responsible for providing direction for the business.
  Creates,communicates,and implements the organization’s vision
and mission
 Evaluate the success of the organization.

Plant Manager

 Responsible for overseeing the smooth running of the leather

processing and manufacturing plant.
 Part of the team that determines the quality and quantity of
processed and manufactured leather products that are to be
produced.
 Responsible for training, evaluation and assessment of firm
workers.
 Ensure steady flow of law materials to the plant and easy flow
of finished products through retailers and wholesalers.
 Ensure that the plant meets the expected safety and health
standard at all times.

HUMAN RESOURCES MANAGER

 Responsible for overseeing the smooth running of human

resources and administrative tasks.
 Define job positions for recruitment and managing interview
process.
 Carries out induction of new team members.
 Responsible for training evaluation and assessment of
employees.
 Oversees the smooth running of daily office and firm activities.

MERCHANDIZE MANAGER

 Manages vendor relations, markets visits, and the ongoing

education and development of the organizations’ buying team.
 Responsible for the purchases of raw materials.
 Responsible for planning sales, monitoring inventory,
selecting the merchandize, writing and pricing orders to
venders.
  Ensures that the organization operates within stipulated
budget.

SALES AND MARKETING MANAGER

 Conduct external research and coordinate all the internal

sources of information to retain the firms’ best customers
and attract new ones.
 Identifies, priorities, and reaches out to new partners,
and business opportunities.
 Develops, executes and evaluates new plans for
expanding sales.
 Document all customer contacts and information’s
 Helps to increase sales and growth for the firm.

ACCOUNTANT

 Responsible for preparing financial reports, budgets

and financial statements for organization.
 Provides management with financial analysis,
development budgets and accounting reports.
 Responsible for financial forecasting and risks
analysis.
 Performs cash management, general ledger accounting
and financial reporting.
 Responsible for developing and managing financial
systems and policies.
 Responsible for administering payrolls
 Ensuring compliance with taxation legislation
 Handle all financial transactions for organization

CLIENT SERVICE EXECUTIVE

  Welcome guests and clients by greeting them in
person or on the telephone; answering or
directing inquiries.
 Ensures that all contacts with clients(e-mail,SMS
or phone)established.
 Through interaction with clients on the
phone,uses every opportunity to build client’s
interest in firm’s product and services
 Consistently stays abreast of any new
information on the firm’s products, promotional
campaigns etc to ensure accurate and helpful
information is supplied to clients.
 Receives parcels/ documents for the firm.
 Distributes mail in the organization
 Handles any other duties as assigned by the line
manager.

PRODUCTION WORKERS/MACHINE OPERATORS

 Responsible for handling services that

revolves around tanning hides and skins,
currying hides and skins, finishing hides and
skins, dyeing and finishing furs
 Operates machines used in the processing
leather and related products.
 Assists in packaging and loading tanned and
finished leather products into distribution
trucks

DISTRIBUTION TRUCK DRIVERS

 Assist in loading and unloading tanned and

finished leather
 Maintains a logbook of their driving
activities.
  Keep a record of vehicle inspections and
make sure the vehicle is equipped with safety
equipment.
 Transport of finished goods and raw
materials.
 Reports defects, accidents or violations.
 Complies with truck driving rules and
regulations.

SWOT ANALYSIS

Basing on market research conducted, we know that there are number of

tanning and finishing firms in UNITED REPUBLIC OF TANZANIA that is why
we are following due process of establishing a business so as to compete
winningly with them.

Hereunder is the summary of the SWOT analysis that was conducted for
JORENO VEGETABLE LEATHER TANNING FIRM.

 Strength
Our major strength as a leather processing and manufacturing is the
vast experience of our team.
 Weakness
Our major weakness that we have is that we are new leather processing
and manufacturing firms and we lack enough fund to engage in business
that will produce goods desired throughout Mbeya city and nearby.
 Insufficient business management and knowledge of quality processes
limit enterprise development along the value chain
 Weak coordination of sector operators along the value chain leads to
fragmented development
 High cost of production linked to licensing procedures, logistics costs
and informal costs
 Tanzanian leather product manufacturers are small-scale operations
reliant on low-skilled technology. Their limited knowledge of the market
or fashion trends, along with their lack of technical expertise, restricts
their ability to adapt and take advantage of emerging trends in the leath-
 er market. Their capacity to expand can in part be attributed to the
fragmented nature of the sector and the absence of a sector incubator
that could work to reduce costs and stimulate innovation. Without such
an incubator, access to knowledge on best practices and access to
finance for fUnited Republic of Tanzaniaher growth are drastically
limited. An incubator would also act as a missing link between the
tanning and leather manufacturing industries in the country, which is
desperately needed considering no Tanzanian tanneries produce high-
fashion finished leather, fUnited Republic of Tanzaniaher limiting the
production capacity of the local manufacturing industry.
 Industrial clusters that bring together slaughterhouses, collectors,
tanneries and manufacturers of leather products allow for an enhanced
industry in terms of access to materials and skills, quality outputs, and
greater innovation. Unfortunately, in the United Republic of Tanzania
there is an absence of such clustering,
 OPPORTUNITIES
The opportunities available to leather processing and manufacturing are
huge because almost all Tanzanians make use of products that are made
from leather.

 CHALLENGES
The leather industry has been negatively affected by import
competition. Another challenge that we are likely is arrival of new
leather firms in the same location where ours is located.

MARKET ANALYSIS
Market Trends

The Tanzanian leather industry is characterized by its low level of

development and consequent low market penetration. Even domestically, the
local tannery and manufacturing market for leather footwear and other
leather goods in the United Republic of Tanzania continues to face serious
challenges both from cheap imports that continue to suffocate local
production, and the inability of local manufacturers to keep up with foreign
competition either quantitatively or qualitatively. Low skills among artisans in
design concepts, fashion trends, tools and marketing contribute to the limited
market development capacity of local manufacturers.
The tanning industry in the country produces mainly wet-blue leather,
with a small number of tanneries producing crust and finished leather,
and only around 40 micro, small and medium-sized enterprises and two
larger enterprises manufacturing leather products and footwear which
could be exported. The inability of the industry to address market
demand is due to its weak knowledge of market trends and buyer
requirements, which is in part due to the small-scale, fragmented nature
of the industry. The lack of market information, access to finance, and
access to new techniques and technology prevents improved production
and productivity of the sector. For example, although fashion very much
drives the industry, no Tanzanian tanneries produce high-fashion
finished leather because of a lack of the highly skilled workers and
technology that it requires.

The limited training offered or available to the smaller tanneries and leather
product manufacturers, who dominate the Tanzanian leather sector has
resulted in a general lack of knowledge about newer, more environmentally
friendly tanning processes. The international leather industry has increasingly
come under pressure to improve its practices and have a less costly effect on
the environment, in particular regarding the level of air, water and ground
pollution, as well as health costs for the workers involved. Therefore, while the
leather market is experiencing global growth, stricter environmental
standards are becoming more expected as the norm.
A major challenge is the use of chrome, which in the United Republic of
Tanzania – as in most of the rest of the world – continues to dominate
the tanning sector. Chrome is cost-effective but is also one of the most
toxic tanning methods. The lack of awareness of other methods, such as
wet-white ( using a mixture of synthetic and vegetable tannins ) or other
vegetable tanning, is compounded by the higher costs of these methods,
and exacerbated by the higher production costs of the Tanzanian leather
sector and the lack of access to sustainable financing.
 The JORENO VEGETABLE LEATHER TANNING FIRM will train Staffs on
new tanning techniques and technologies, including vegetable, wet-
white and improved chrome tanning. This will also allow the sector to
take advantage of access to emerging market trends. The re-use of waste
by the industry will also be encouraged. The Strategy will also support
the upgrading of tools and the modernization of tanning facilities to
adopt new technologies through better access to finance, using the LDF
as a guarantee mechanism for smaller tanneries.

MARKET DEVELOPMENT AND INVESTMENT OBJECTIVES

The Tanzanian leather industry has great potential, owing to the low
development of the industry and very low penetration in important markets.
Markets have been identified on the basis of market size, demand for products,
technology, development, and the sustainability of the end-product industry in
the near and long-term future. Present trade and cultural relationships have
also been taken into account. The data for the broad categories of HS 4104, HS
4105 and HS 4106 from the ITC Trade Map have been taken as an indication of
market potential in the target markets.
The domestic leather and leather products industries are always important, as
the initial requirements are not stringent and can take care of low selections
and products. It gives an opportunity to local tanners and product manu-
facturers as the scale, and hence the risk, is low. It also provides an
opportunity to develop the local industry to curb imports and develop the
local talent pool. However, the local capacities of tanners and product
manufacturers must also be challenged by the more stringent requirements of
foreign buyers. That experience is required for the sector to grow to a point
where it can compete in global markets and, eventually, attract the foreign
capital, technologies and expertise needed to move it up the value chain.
The distribution channels in the tanning industry are not complicated as
H&S are more or less sold as commodities. Importers / traders and
direct factory buyers are easy to approach through exhibitions, mutual
trade delegations and direct contacts through electronic channels. Direct
factory buyers and the largest importers / traders also represent the
pool of likeliest foreign investors.
 Study shows Tanzania has abundant opportunities in leather industry
.the leather industry includes manufacturing of shoes, belts, wallets,
handbags, briefcases,

There are still many untapped opportunities in the leather industry in

sense of its huge potential for boosting growth and development
through increased output, exports and by offering more job
opportunities.

Tanzania is endowed with large number of cattle and goats, but animal
by-products are underutilized for business purposes. Cattle hides,sheep
and goat skins are poorly handled and exploited due to the level of
processing technologies inclinding application of hazardous chemical
such as sodium sulphide and chromium that are toxic and cause
pollution of water bodies and are hazardous for all kinds of organisms.
The cost of chemicals to the environment led to closure of some
industries and is the main hindrance to production.
JORENO VEGETABLE LEATHER TANNING FIRM will use…………….in
processing leather products to safeguard environment.

OUR TARGET MARKET

Mbeya city and nearby towns have wide range of customers.We have
conducted our market research and we have ideas of what our target
market would be expecting from us,We are in business to sell leather
products to the following groups of people;

 Leather belts,shoes,bags,wallets,luggage manufacturers,

 Leather car seat manufacturers,
 Every other manufacturing firms that make use of tanned and finished
leather as raw materials.

OUR COMPETITIVE ADVANTAGE

A close study of the industry reveals that the market has much more intensely
competitive over the last decade. We have to be highly creative,customer
centric and proactive if we must survive in this industry.we are prepared to
compete favorable with other firms in Mbeya city,nearby towns and
throughout the UNITED REPUBLIC OF TANZANIA.

In view of that,JORENO VEGETABLE LEATHER TANNING FIRM processing and

manufacturing is launching a standard leather products that will be the
preferred choice for customers that make use of processed leather and leather
products in every where our products will be retailed.

SALES AND MARKETING STRATEGY

 SOURCE OF INCOME

JORENO VEGETABLE LEATHER TANNING FIRM is established with objective

of maximizing profits in the leather tanning and finishing firms in the UNITED
REPUBLIC OF TANZANIA and we are going to all the way to ensure that we do
all it takes to sell our products to a wide range of customers.

JORENO VEGETABLE LEATHER TANNING FIRM will generate income by

selling the following products;

 Xxxxxxx
 Xxxxxxxx

SALES FORECAST

One thing is certain it comes to leather processing and manufacturing

business,if your products are well packaged and branded and if your firm is
easily accessible,you will always attract customers cum sales that will
translate to increase in revenue generation for the business.

Below are the sales projection for JORENO VEGETABLE LEATHER TANNING
FIRM,
  First fiscal year………….
 Second fiscal year………..
 Third fiscal year……..

N.B This projection was done based on what is obtained in the market with
the assumption that there won’t be any major economic downfalls and there
will be no any major competitor who offer the same products as we do within
the same location. Please note that the projection may be lower or high.

JORENO VEGETABLE LEATHER TANNING FIRM will adopt the following sales
and marketing approach to sell our products;

 Introduce our brand to manufacturers that make use of leather

products,merchants,retailers and stakeholders in Mbeya and nearby
towns.
 Leverage on the internet to promote our product brands.
 Engage in direct marketing and sales.
 Encourage the use of word of mouth marketing(referrals)

Publicity and Advertising Strategy

Our publicity and advertising strategy is not solely for selling our
products but also effectively communicate our brand. Hereunder are the
platforms we intend leveraging on to promote and advertise JORENO
VEGETABLE LEATHER TANNING FIRM
 Place adverts on both print and electronic media platforms
 Sponsor relevant community projects
 Leverage on the internet and social media platforms to promote
our leather processing and manufacturing firm-brand.
 Distribute our fliers and handbills in target areas.

Our pricing strategy

OUR prices will conform to what is obtainable in the industry,we will ensure
that within the first 6 to 12 months our products are sold a little bit below the
average price of various leather products in UNITED REPUBLIC OF
TANZANIA.We have decided that our strategies will help us run on low profits
for periods of 6 months;it is a way of encouraging people to buy our products.

 Payment Option

The payment policy adopted by JORENO VEGETABLE LEATHER TANNING

FIRM is all inclusive because we are aware that different customers prefer
different payment options as it suits them but at the same time,we will ensure
that we abide by the financial rules and regulations of UNITED REPUBLIC OF
TANZANIA.

Hereunder are the payment options that JORENO VEGETABLE LEATHER

TANNING FIRM will make available to her clients.

 Payment via bank transfer

 Payment with cash
 Payment via Point Of Sales machine
 Payment via online bank transfer
 Payment via check
 Payment via mobile money transfer
 Payment via bank draft.

We have decided to enable our customers make payment for purchase of our
leather products without stress on their part.Our bank account numbers will
be made available on our promotional materials.

 Startup Expenditure

Starting a standard leather processing and manufacturing firm is a capital-

intensive business.The capital will be spent on leasing or acquiring a facility
and also purchasing leather cutting,polishing and tanning equipment,raw
materials,paying employees and utility bills.

These are are key areas where we will spend our startup capital.

 Total fee for registering the business in UNITED REPUBLIC OF

TANZANIA Tsh……
 Legal expenses for obtaining licences and permits Tsh……
  Marketing promotion expenses for the grand opening of JORENO
VEGETABLE LEATHER TANNING FIRM Tsh….
 Payment for rent Tsh…..
 Payment for construction of processing plant Tsh….
 Payment for stationeries Ths……
 Operational cost for the first 3 months(salaries of employees,payments
of bills et al) Tsh….
 The cost of start up inventory (supply of raw leather,polishing and
tanning chemicals and dyes et al)
 The cost of purchase of furniture,computers,printers,telephone
 The cost of lauching a website Tsh…..
 Miscellaneous Tsh……..

Total Payments Tsh……..

Generating Startup Capital for JORENO VEGETABLE LEATHER TANNING

FIRM.The firm is a family business that is owned and financed by ………….
And……….They do not intend to welcome any external business partner.

These are the areas we intend generating our startup capital;

 Generate part of the startup capital from personal savings and sell
of stocks
 Loans from family members and friends
 Loans from banks

N.B We have been able to generate about Tsh……

SUSTAINABILTY AND EXPASION STRATEGY

The future of our business depends on the number of loyal customers

that they have,capacity and competence of our employees,their
investment strategy and business structure.we know if all these factors
are missing from a business,then it won’t be too long before the business
closes up.

One of our most important goals of starting JORENO VEGETABLE

LEATHER TANNING FIRM is to build a business that will survive by using
its own cashflow without the need for injecting finance from external
sources once the business is officially running.

We know that one of the ways of gaining approval and winning

customers over is retail our leather products a little bit cheaper than
what is offered in the market and we are prepared to survive on lower
profit margin for a while.

JORENO VEGETABLE LEATHER TANNING FIRM we will make sure that the
right foundation,structures and processes are put in place to ensure that
our staff welfare are well taken care.We know that if that is put in place,
we will be able to successfully hire and retain the best workers.They will
be more committed to help us build the business our dreams.

Check lists/milestone

na required completed
1 Business name
2 Business registration
3 Opening of bank accounts
4 POS
5 Opening mobile money account
6 Application and obtaining Tax Payer’s ID number
(TIN)
7 Application for business licence and permit
8 Leasing of facility and construction of processing
plant
9 Conduct feasibility study
10 Generating capital from family and friends
11 Application for loan from bank
12 Writing of business plan
13 Drafting of contract documents and other
relevant legal documents
Design of company ‘s logo
Printing of promotional materials
Recruitment of employees
Purchase of materials for
cutting,tanning,dying,polishing and
manufacturing leather
products,computer,furniture,shelves,stationaries
Creating website,instagram,facebook accounts
for firm
Creating awareness for the business both online
and around the community
Establishing business relationship with vendors-
wholesalers and retailers.