Shoe factory
with international standards

The global footwear market is growing – opportunities for new manufacturing countries

The global market for shoes is growing at an annual rate of per cent. Forecasts predict that buyers will purchase shoes worth a total of 609 billion US dollars in 2025. While demand from North America and Europe is largely constant, it is rising sharply in emerging markets. A shift in manufacturing countries is also under way: China is still the dominant manufacturing country but rising wage levels have led many manufacturers to relocate their production to other countries, for example in Eastern Europe. But manufacturers in these countries are also coming under strong cost pressure.

Tunisia has several competitive advantages: It is well connected to major sales markets via its harbors and has lower production costs than Western Europe. Transport to Europe is faster and cheaper than long-distance transport from Asia. These are important factors in the fashion industry with its rapidly changing trends. The country also has a young and well-educated population. However, unemployment remains high, and Tunisia faces the challenge of creating jobs in formal sectors of the economy with employees benefitting from the social security system. The shoe and clothing industry is labor-intensive and can play an important role in this process.

A modern production facility

Since 1991, the Tunisian company SOPROTIC has been making shoes for export in the greater Tunis area, primarily to Italy, France, and Spain. SOPROTIC started out as a supplier for European brands, but several customers have since then integrated the company in the development and design of the shoes, and the company has succeeded in moving into higher-value market segments. In 2019, it started selling shoes under its own brand Una Storia. This positive development prompted SOPROTIC to plan the construction of a new factory with modern equipment. It is intended to meet increasing demand and primarily supply premium customers. To achieve this, production in the new factory is to be certified in accordance with international quality, social and environmental standards. Four production lines will be set up on an area of 4,500 square meters. Here, shoe uppers will be sewn and complete shoes with soles will be produced. The entire production is destined for export.

265 full-time jobs for skilled and unskilled workers

The investment project will create jobs for both skilled and unskilled workers. 265 people are to be hired in the first year after completion of the three-year investment phase, around 160 of whom will be women. After one year, the new factory should be running at full capacity. All employees will be given full-time positions and earn more than the Tunisian minimum wage. They will have access to the statutory social benefits. Of the workers already employed by SOPROTIC, 238 will benefit from improved working conditions, in particular higher wages.

SOPROTIC plans to invest a total of 4.18 million euros. The Facility Investing for Employment grants a subsidy of 1.01 million euros (25 per cent). The Facility's funds will primarily be used to finance the purchase of modern shoe manufacturing machinery. In addition, it will be used to purchase some of the equipment for the new factory, such as an air conditioning system, compressors, and a warehouse.

The Facility Investing for Employment (IFE) of KfW Development Bank is part of the Special Initiative "Decent Work for a Just Transition" of the German Federal Ministry for Economic Cooperation and Development (BMZ). With its support, the Facility wants to remove barriers that prevent the creation of new and better jobs in the private sector in the African partner countries.