The MoU says the new factories, one for shoe-making and another for tanneries, will be built on 25 acres at an industrial area within Karanga Prison and are set for completion in 16 months.
The signing ceremony was witnessed by the Prison Services Commissioner General, Phaustine Kasike, the Public Service Social Security Fund (PSSSF) Director General Eliud Sanga and the Tanzania Industrial Research Development Organization (TIRDO) Director General Prof Mkumbukwa Mtambo.
Speaking at the signing event, the Factory Manager, Masoud Omary said that once operational, the factories will produce items worth euro 29.9 million annually, noting that the new factories will create 3,000 direct jobs and 4,000 indirect ones.
The project will be implemented in two phases, where the first phase involves the renovation of the shoe - making factory through Prison Corporation Soles at Karanga area, adding new machines to produce 400 from 150 pairs of shoes per day.
The second phase will involve constructing new factories, starting with a footwear factory with a capacity for 4000 pairs of shoes per day, equivalent to 1.2m pairs annually.
The other factory will be targeting the production of soles from 800,000 up to 1.2m soles annually, along with manufacturing leather articles such as bags, jackets, sofa and seat covers plus pistol cases, all reaching the grand total of 184,000 items annually.
The construction of tanneries with a capacity of processing 13,000,000 square meter of raw hides and skins per annum, where 60 percent of the produce will be directed at the factory, and 40 delivered to other markets.
The manager named the two companies signing the agreement as Toscana Machine Calzature (TMC) and ItalProgetti from Italy, saying construction will be completed in 16 months.
“It is our hope that the project will provide a reliable market for hides and skins from livestock keepers and add value to their products,” he said.
Omary said the project will increase the production of crust leather finished leather, shoes leather articles and soles, noting that it will add more revenues to the Moshi Urban municipal council, through payroll levy, corporate tax, value added tax (VAT), withholding tax as well as property and land rent tax.
Speaking at the event, Commissioner General Kasike expressed gratitude to be part of the project parties, noting that it was an opportunity for the Prisons Department to give vocational skills to prisoners as the factory will be built within prison premises.
“It our hope that our contribution will be part of the country’s industrialisation process advocated by the fifth phase government,” he said.
He took time to express commitment to department’s role duty of constructing the factories as per the agreement.
In his remarks, PSSSF Director General Eliud Sanga said the market for skins and hides was increasingly rapidly and therefore increasing incomes as well.
The DG said the Italian companies will supply machines and provide technical expertise while the prison services will construct the infrastructure.
TMC Sales Manager Daniele Ferradini promised to provide all technical support and know how, assuring the audience that the company has wonderful vision for Tanzania with the best technology and organisational methods.