Palestine: Second skin for the leather sector

In the city of Hebron, in the southern West Bank, leather craftmanship and footwear manufacturing are part of ancestral knowledge. Yet despite an excellent reputation, this know-how fell victim to shoe imports and trade restrictions imposed by Israel and almost disappeared.

To save local craftsmen and tackle unemployment, which reaches 27% across the territory, the Palestinian Ministry of National Economy initially considered protectionist measures, before opting for an innovative solution in Palestine: the cluster approach.

A cluster is a network of small businesses located in the same territory and belonging to the same economic sector. Grouping together means they can achieve economies of scale (joint purchasing of raw materials, for example) and access markets which these businesses would not have been able win over alone.

Five pilot clusters 

In 2012, the Ministry called on Agence Française de Développement (AFD), which has extensive expertise in this field, in order to develop five pilot clusters in Palestine: tourism and arts & crafts in Jerusalem, furniture in Salfit, marble in Bethlehem and North Hebron, date palm cultivation in Gaza and leather in Hebron. 

The objective: strengthen sectors and improve public-private partnerships. An initiative which is receiving EUR 5m of support from AFD, alongside the local Chambers of Commerce and Industry.

Stronger together

Following an awareness-raising campaign, the cluster came into being in 2013, with a group of 18 SMEs. These companies subsequently started sharing their knowledge of management and design during workshops open to all and holding joint stands during trade shows.

They thereby gradually discovered that pooling resources could give them visibility at a lower cost, facilitate their recruitment and allow them to benefit from technical, financial and administrative support at a lower cost. This was eye-opening for business leaders, who were not used to working together and sharing information, and a small revolution for the Palestinian capital of leather.

Over 100 actors have followed

Building on the wave of enthusiasm, the cluster subsequently expanded to over 100 actors in the production chain: tanners, suppliers of chemical products and accessories, designers, manufacturers of molds, soles and shoes, retailers... The initiative encourages collective cluster projects in order to promote the development and pooling of skills, organization and innovation. The objective is the same for everyone: become more competitive.

And this is how Hebron’s leather sector is slowly getting back on its feet. The benefits of the cluster are clearly visible: the products are of better quality, companies are more competitive on local and international markets, exports have picked up, and vocational training is more suited to the needs of the sector. New jobs have even been created. 

Hebron Shoe Shop, which was set up in June 2016, has turned into a real showcase for local production thanks to the cluster. It now distributes the creations of 15 manufacturers and has sold 20,000 pairs of shoes in a year

Partnership with the Polytechnic University

The members of the cluster have taken things a step further. They are behind the creation of a center dedicated exclusively to the development of the sector: the Leather & Footwear Products Development Center (LFPDC). The center has a design unit to design new models and prototypes, as well as a testing platform. Since last year, it has been offering one-year sandwich courses, in partnership with the Polytechnic University, to promote future entrepreneurs in the sector. 

The Hebron leather and shoe cluster is today considered as a success by the Palestinian Ministry of National Economy and AFD. Overall, the project clusters have achieved a good level of coordination between the various private and public actors. This should really boost the Palestinian private sector and allow it to sustainably develop its competitiveness so that it can face up to the external challenges.