It is with a heavy heart that I am announcing, due to a number of circumstances that we regretfully have to close our factories in Ethiopia.
In 2009 I had a vision to show that premium products can be made in Sub-Saharan Africa. After traveling all over the continent, I found exciting potential specifically in Ethiopia and its leather products. Over the years we have learned and done a lot. In the beginning, we partnered with fantastic local shoe factories like OK Jamaica, Walia and Tikur Abbay, and with their help and support in 2012 we opened our own small factory in a place called Akaki Kality on the outskirts of Ethiopia’s capital, Addis Ababa.
Those first years were thrilling. We were trying to make unique footwear for our customers while creating life-long skills for our workers. In late 2013, we did what no shoe factory in the world had ever done and became Fair Trade Certified™. Since that initiative, because of your purchases, we have provided over $125,000 USD in additional premiums (above and beyond salaries) to our workers and their families in Ethiopia.
Our Addis factory grew from 15 workers to a peak of 120, where most of our workers were women. A few years ago, we opened up a smaller factory in Debre Marcos, which is about 300 miles north of Addis Ababa, with the goal of making shoes for people with a difficult disease called Podoconiosis. With this initiative in Debre Marcos, we supported over a thousand people affected by this disease. Between our partner factories and our own factory, we have been able to fairly and proudly produce over 200,000 shoes, bags, wallets and other accessories in Ethiopia.
While I am extremely proud of our successes, the honest reality is making it all happen has not been easy. As a Company, we have continued to lose money every year since we started, and over the last 3-4 years, we lost over $500,000 each year. To keep going even with all those loses over the years, I have personally put all my savings into Oliberté, I have mortgaged my home to use it as collateral to take on large debts, many times paying well above 20% interest, one time even 35%. Not easy. But I never gave up, though many times many people told me I should. But it was not just me that invested my money and time. Over the years, I have been very fortunate to have a number of people believe in me (these were Oliberté’s shareholders), who also risked (and now have lost) a substantial part of their wealth. Some invested $25,000, some invested upwards of $1M over the years and all invested a lot of time.
Late last year, the losses continued and sales were not growing fast enough again to support all our costs, especially to support our factory. I personally was out of money and could not put any more into the Company and my shareholders too were not able to support anymore.
As such, I began to scramble for what I could do. I did not want my dream to die, but I wanted to do everything I could to not close our factory in Ethiopia and tell our team there and here in North America, it was done.
I spent the last months talking to big and small companies to see if they would buy our factory and keep it going. But I could not find any suitable partners.
So…late last year, I made the difficult decision to inform our factory workers we had no choice but to close our two factories. We worked with them, and their union that we helped form, to ensure they were taken care of fairly. Since then, I’m happy to say many have already found new and exciting jobs within the shoe industry. Others have chosen to retire or find new paths to follow. Most importantly, all are now part of the legal work force, which for a number of factory workers was not something they ever could have imagined before working for Oliberté in Ethiopia.
There is so much more I could write. It has been a difficult time indeed. I’m sure many of you have questions, so I’ll be doing a ‘Ask Me Anything’ on Reddit next Tuesday at 2pm EST where I’ll be ready to answer all your questions. I’ll be sending an email out with a link and details on Tuesday morning, so please stay tuned.
While this is the end of Oliberté in Ethiopia, I’m still working on fulfilling our mission of promoting responsible manufacturing in the world and I hope to have some news for you by summer about the future of Oliberté.
Thank you to our staff here in North America, our shareholders and especially our factory workers for helping make our dream a reality for the last decade…and to you, our customers, for your continued support through the years and through this difficult time.
-Tal
