Ramsay Signs $1.3m Deal for Italian Shoes

Factory must produce 60,000 pairs of Geox Respira for export

Following a 1.3 million dollar deal that was signed with Geox, an Italian shoe and apparel manufacturer, on July 16, 2010, Ramsay Shoe Factory is to start production this month for 60,000 pairs of shoes that are to be shipped from November 31.

The shoes to be produced are called Geox Respira and are designed to breathe by letting moisture out and keeping water from getting in. Once produced, the shoes will be sold in Geox outlets, carrying the label, “Made in Ethiopia by Ramsay.”

The company, which was established in 1990, has the capacity to produce 2,000 pairs a day.

“Due to the design specifications of the Geox Respira shoes, we will produce only 1,500 pairs,” Zelalem Habte, managing director of Ramsay, told Fortune.

After Geox reviewed 24 samples that were sent to it, it awarded the deal to Ramsay. The shoes will be manufactured from 25pc locally produced leather, thermoplastic rubber for the soles, and reinforcement material that are imported from abroad, according to the deal.

“The leather used is to be bought from Sheba, Batu, and Afdel Tanneries which Geox specifically selected,” Zelalem told Fortune.

The shoes, for which Ramsay will be paid 19 dollars a pair, take about 20 days to reach Italy and have to be delivered to Geox by January 31, 2011.

Geox, which was established in 1995 and has its headquarters in Rome, Italy, sold shoes worth 5.4 million dollars during the first half of 2010.

Recently, local shoe companies have increasingly been commissioned to produce products for foreign brands and ship the goods to the companies. Local companies have created links with United States (US) shoe companies via the Agribusiness and Trade Expansion Program (ATEP), an initiative of United States Agency for International Development (USAID).

The programme, which began in 2006 and is to last five years, linked seven local companies with three US companies in June 2010. One of the three US companies was Brown Shoe Company Inc, one of the biggest shoe retailers and wholesalers in the US, which recorded sales of 2.3 billion dollars in 2009.

Brown has reviewed three samples and a deal for 20,000 pairs of shoes is expected to be signed soon, according to Zelalem. Brown is expected to pay an average of 14.50 dollars per pair, depending on whether it orders ladies’ or men’s shoes or a combination of both.

“Although the recent devaluation of the Birr increased Ramsay’s profit margin of Ramsay, the recent global crisis has affected our market reach over the past couple of years,” Zelalem said. “The good thing is that when companies like Geox come to Ethiopia, others will soon follow in their footsteps.”

Ramsay was established with an initial capital of two million Birr which has since increased to 13 million Br. The company produces shoes for export on its 5,000sqm plot of land, located in the industrial zone next to Kadisco Square on the Ring Road in Addis Abeba.

By ADERAJEW ASFAW
FORTUNE STAFF WRITER

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