produce between 8 and 9 million pairs of shoes, a figure that would double that reported in 2020 and generate revenues for companies of more than $120 million.
In the first weeks of the year, shoe sales in the Nicaraguan market showed dynamism, as more than one million pairs were sold due to the start of the school year, according to executives of the Nicaraguan Chamber of Leather and Footwear (Camcunic).
Imports of footwear and clothing fell 8% in the first half of the year compared to the same period in 2017, and production in the country contracted by around 30%.
According to representatives of the guilds of the Nicaraguan Chamber of Leather Shoes (CNCC), and the Nicaraguan Chamber of Leather and Footwear (Camcunic), in the first six months the local production of clothing and footwear has decreased by about 30%.
The footwear industry in 2015 manufactured a record 9 million pairs of shoes with revenues above $50 million.
The 1,300 leather workshops that operate in Nicaragua generated revenues of $50 million in 2015, reaching a production of 9 million pairs of shoes, according to figures from Alejandro Delgado, president of the Chamber of Leather and Footwear and Allied Businesses, published by Elnuevodiario.com.ni.
Reversing the trend of previous years, increased leather stocks have allowed the industry to project a 20% growth in annual production of shoes this year.
The growth in inventories comes in addition to an improvement in the quality of leather being received by shoe manufacturers, who say that this is mainly due to the fact that the leather they now mostly get comes from the processing plant belonging to the Mexican company SuKarne which started operating this year.
The amendment to the Law on Tax Coalition sent by the Executive to the Assembly repeals the exemption from VAT on domestic production of clothing and footwear.
If the reform is approved, SMEs in these sectors will be the most affected "... as it states that they must pay Value Added Tax (VAT) and also orders that they withhold income tax, through an unclear mechanism within the fixed quota system. "
The purchase agreement for 100,000 square feet of leather between Guatemalan and Nicaraguan companies reflects the growth in demand for this product in Guatemala.
The tannery La Fuente, located in Granada, Nicaragua, reported that it has finalized a contract with a Guatemalan company to provide 100,000 square feet of leather and added that they have asked to have a local distributor in order to access the product more directly.
North American entrepreneurs in the footwear sector have emphasized the advantages of the Nicaraguan industry as providers of high heel shoes for ladies.
Surpassing China, Vietnam, Cambodia, Indonesia and Bangladesh and ranking below average in cost of quality leather shoes ($ 3.30 per pair), manufacturing soles ($ 0.43) and the development of a pair women shoes ($ 8.17), Nicaragua has become highly attractive as a destination for industry manufacturers and a candidate for a strong manufacturer and exporter of women's shoes.
The lack of its main raw material is a recurring problem in the Nicaraguan footwear industry.
The National Chamber of Leather, Footwear and Allied Businesses in Nicaragua has requested a temporary ban on the export of leather, noting that most of the production of cattle hides in the country is being sold abroad.
Whether because of problems arising in imports of the main raw material for the manufacture of footwear, or because of local production of leather being exported abroad, this seems to be a never ending issue that periodically causes severe losses to the industry, due to the fact that it makes it impossible to keep production plants in operation.
The goal will be achieved through leather export restrictions applied by the Government,which will ensure there is material for local production.
This was explained by Alejandro Delgado, president of the National Chamber for Leather, Footwear and Allied Companies (Cancunic). About 1,200 SMEs expect to close 2013 with a production of 2 million pairs of shoes, about 200 thousand more than the number produced in 2012, which is growth of 11.11%.
In Nicaragua small and medium sized shoe factories now have availability of their main raw material, as a result of the enforcement of the law restricting leather exports.
With the implementation of the Law on the Promotion of The Leather Footwear and Similar Products Industries, Nicaraguan entrepreneurs are no longer suffering from a shortage of raw materials.
The export restrictions on leather enacted in Nicaragua have allowed for a 7% increase in the activities of shoe factories in 2012.
Laprensa.com.ni reports that the "export restraints on hides and skins, adopted by ministerial agreement on 9 November, is already yielding positive results for the national production of footwear, which will have increased by seven percent this year, five percent higher than 2011.
Domestic production of footwear grew from 1 million pairs of shoes 7 years ago,to 3.5 million in 2011, of which one million were exported abroad.
Alejandro Delgado, president of the National Chamber of Leather Footwear and Allies argues that better quality and better prices in relation to the imported product have led to large gains in the last decade.
The shortage of processed leather in Nicaragua is affecting shoe manufacturing workshops, who are currently importing from Mexico.
A failure of one of the leather processing providers has prevented the normal functioning of the footwear industry for almost the entire month of November, say leaders of the Chamber of Leather and Footwear.
An article in Laprensa.com.ni reports that, "This has stopped the manufacture of 150 thousand pairs of shoes, which were expected to be sold in December, when there is great demand due to school promotions, communions and other special seasonal celebrations. "
The industry sells annually about 3.5 million pairs of shoes for $ 36 million, of which 71% is sold in the domestic market.
Alejandro Delgado, president of National Leather and Footwear, explained that most exports head for Central America and that the average price of each pair is $ 12.
He added that the sector has little technology and in order to reverse the situation, the workshops require a more accessible credit.
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