Ethiopian architect-turned-manufacturer produces leather bags for export market

Semhal Guesh, CEO of Kabana Leather

We speak to Semhal Guesh, CEO of Kabana Leather, an Ethiopian company that produces a variety of handmade leather products.

1. How did you come up with the idea to start Kabana Leather?

The concept was born while I was making hand bracelets from leather waste while at university. After two or three failed attempts at running other businesses, I established Kabana in 2017.

Initially, it was just a hobby. I am an architect by profession and love designing. My passion for design led me to make leather bags. My hobby became a business when I employed someone and saw the impact it made on their life. I quit my job at an architectural firm to run Kabana full-time.

We produce products under our own brand Kabana and also have a contract manufacturing division which makes items for international labels. We used to be 100% focused on the export market until Covid-19 hit and it tested us economically. Afterwards, our target market partially shifted towards the local market. Our customers are people and corporates who source ethically produced goods.

2. Give us an overview of your product range.

We have tote bags, gym bags, wallets and work bags.

We are currently also producing PPE products, such as face masks and scrubs, with support from the Mastercard Foundation, but this is temporary.

3. Where do you source your raw materials?

Close to 92% of our raw materials are locally sourced; these include leather from sheep and goats, textiles and canvas. The remaining 8% of raw materials are imported from Egypt, the US and Taiwan, including zippers, buckles and accessory hardware. We source leather directly from the factories and produce it according to our colour and texture specifications. We choose these factories based on our requirements regarding their sustainability, environmental footprint and zero child labour practices.

Leather used for the production of bags and wallets.

4. Describe your product development process.

For our Kabana brand, we try to have launches twice a year. Design starts with a mood board with colours, material concepts and design. Usually, I work with my team to develop patterns and designs. We make samples and get feedback on these. We then manufacture our selection for the launches.

On the outsourced manufacturing side, we obtain designs from buyers who want products made in Ethiopia. We make samples using their designs with potential alternatives. The approval process usually takes several iterations and discussions; once they approve a sample, we go ahead and manufacture based on purchase orders.

5. Where do you sell your products?

Currently, the bulk of our sales are to the US and we send small consignments to Europe but that has not expanded as much as we’d like. We also sell small quantities to Rwanda and South Africa.

Employees at the Kabana Leather production facility.

6. Who are your main competitors?

On the contract manufacturing side, we compete with manufacturers in India and Mexico for the US market. In terms of our own label, we compete with other local brands that export to the same markets.

7. Identify the factors that led to your success.

We focus on training and investing in our team, so we have close to zero staff turnover. Women make up more than 80% of the team. We focus on consistency and the quality of our products, which has driven the brand forward. We do not concentrate on seasonal or fashionable products, but rather on functional bags made locally and sold globally.

8. What has been the most successful form of marketing?

Our marketing is largely word of mouth from satisfied clients who recommend Kabana to others. We have not spent a lot on marketing. We have also found some level of success at trade fairs.

A Kabana Leather bag.

9. What are the biggest challenges to be successful in your industry?

Our biggest challenge is sourcing quality leather and accessories that match the bags.

The business environment is tough on startups and entrepreneurs like me. We struggle to access finance which limits our working capital and makes it hard to move from a small to a medium enterprise or expand operations.

10. Tell us about one of the toughest situations you’ve found yourself in as a business owner.

Covid-19 was a trial for me, my team and the Kabana brand. We had major setbacks and almost closed shop; we struggled like the majority of businesses across the world. This year has been the toughest because our clients cancelled orders and, once business resumed, all cancelled orders were shipped with major discounts. I was forced to let a few of my temporary employees go and repurpose the factory to produce masks and personal protective equipment, something we have never done before since we are a leather company. Thankfully, with the support of the Mastercard Foundation, it helped us recover, and save our employees’ jobs.

Kabana Leather CEO contact information

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