Quality of hides of Bangladeshi livestock is high naturally. The scope for producing goods at low cost is available here. This prompted the international buyers to prefer the country. Export earning from leather sector is on the rise. But the sector cannot use its potential due to some barriers. Experts think the leather sector can follow the path of RMG in securing country’s leading position in global market. If the barriers can be removed, the good day will not be far away. Some local brands engaged in processing leather and related goods have hit international market apart from meeting domestic demand. Export volume is increasing every year. The country exported leather items worth $ 463 in the current FY while it was $ 444 in the previous year. Hides of cow, goat and buffalo of Bangladesh are thick, oily and bright naturally. Any goods made of the hide looks brighter and more beautiful. Quality of the processed leather here is very high. The people of the country have been using domestic animals for cultivation. Commercial farming of animals started to increase from ’90s. As such, the businessmen can procure hides throughout the whole year. The biggest season of collecting skin is the Eid-ul-Azha. Local tanneries buy nearly 220 million square feet leather annually. Five years ago, China used to export 55 percent of the total leather. But time has changed. Production cost in China, Thailand, Vietnam, Taiwan and Malaysia increased significantly. But the price of leather and related goods in Bangladesh is still low. The foreign entrepreneurs are now interested to invest in lather sector here. The wage for workers in Bangladesh is still lower than other countries. That is why many reputed and large companies like Adidas, Nike are coming in Bangladesh to source products at cheaper rates. They also expressed their interests to invest in factory infrastructure. Apart from this, US and other European Union nations are now active in reducing dependence on China for leather sector due to political ground. Bangladesh is the top favourite country to them for product sourcing. Bangladesh has been slowly advancing as an alternative market to China for the last two years. So the future of leather industry in Bangladesh seems very bright. The leather sector has every potential to lead the world market like the RMG sector. Apex Footwear Limited chairman Manjoor Elahi said the leather production is possible at lower rates in Bangladesh compared to any other countries of the world as there are plenty of raw materials here. Even the quality of raw materials is better here. Thus all are looking towards Bangladesh as the prices are higher in China and other countries. Bangladesh would be able to achieve highest position in the world leather market if the government provides necessary support to the industry. Though there is huge possibility of flouring country’s leather sector, it is not being possible to utilise the potential properly due to several factors. The developed world is very concerned about the compliance issues at the leather factories. Many America and European buyers will halt their import of leather items from Bangladesh if leather processing and leather items are not produced as per international compliance standards. After cancellation of GSP, such type of ban will be a major problem for the economy of the country. The High Court earlier had directed to shift tanneries form Hazaribagh following a case filed by Bangladesh Environmental Lawyers Association (BELA) seven years ago when there was no international ban. But it would not have been possible to build environmental-friendly factories after removing tanneries from polluted Hazaribagh due to lack of competency of the government and cooperation by the concerned businessmen. In the past, the government came forward to relocate factories, but the tannery owners demanded compensation for construction of new factories. The issue was pending for the last five years, though the tannery owners received compensation later in 2014. On the other hand, the traders have not shifted their tanneries though they pledged to do so. The tannery owners were asked to shift their factories to Savar by October last year, but they did not take minimum preparations for the relocation. Meanwhile, the tannery owners placed new demand to the finance, commerce and industrial ministries and Bangladesh Bank. They mentioned in their plea that they need at least one year or more time to build new factories and they will face financial crisis to go for production afresh after a snap of a longer period. In addition, they fear that they will lag behind in terms of competition in the international market. So they sought credit at lower interest to complete the relocation and commence production in new factories. The Leather goods & Footwear Manufacturers & Exporters Association of Bangladesh (LFMEAB) president Nasim Manzur said Bangladesh’s leather industry is advancing at a time when the developed world has taken tough stance regarding the compliance and environmental issues. Many renown companies from the Europe, America and other developed nations had already informed the leather exporters that they will not purchase leather and leather products from Bangladesh unless the factories meet the compliance and environmental requirements. Many foreign buyers are not making any new deals in Bangladesh. They are going to the Indian market. The tanners said they are also interested to shift tanneries to the designated industrial zone in Savar. The government has paid compensation of Tk 250 crore for building factories. But the tanners said they need more fund to commerce production in new factories. “If long-term loan at lower interest is granted for the tannery owners, they will be able to overcome this crisis,” Nasim Manzur opined. Golam Moazzem, Additional Research Director of the Centre for Policy Dialogue (CPD), said, “Marginal farmers are rearing cows and buffaloes for cultivation. The government is encouraging farmers for using modern-technology in farming. As a result, many farmers are now reluctant to in rearing cattle for cultivation. So there is a possibility of a crisis of raw leather in the near future.” Meanwhile, most of the tanneries are following old system for preserving leather which reduces quality of leather. As a result, leather traders are getting lower price. On the other hand, most of the leather factories in the country lag behind in beautification of goods. So the leather traders are failing to supply leather goods as per the design requirements of the buyers, he said. More than 90 percent workers of leather processing and leather goods manufacturing factories don’t have proper training. So, most of the factories cannot fulfill their target, he added. A research conducted by National Productivity Organisation, under the Industry Ministry, revealed that in average, production in the leather factories has reduced by 40 to 45 percent. The study found that use of old machinery has caused a rise in the production cost at many leather units. The report of the study said the leather sector requires more manpower, adding there are 300 leather factories in the country and this sector has a huge market worth Tk 25,00 crore. Mirza Azizul Islam, economist and former adviser of caretaker government, told this correspondent, “Most of the factories in leather sector are under the ‘Original Equipment Management (OEM)’ category. Those factories have no capacity to fulfill international terms and conditions. Those factories should reach Original Development Management category. Bangladesh Apex Footwear Limited by fulfilling all conditions remains under the ODM category. Not only in the domestic market, Apex gained international recognition.” Many leather factories in the country are using different varieties of chemical which poses health threat to the workers. For this, the developed countries has been emphasizing on labour right issues. They said factories should be black listed if the owners fail to ensure safe and hazard-free working condition. Underdeveloped infrastructure and fuel crisis has also been puting negative impact on leather factories, the traders claimed. Referring to the high interest rate of bank loan, Kazi Jamil Islam, managing director of Express Leather Products Limited said, “The neighboring India is giving low interest bank loan to the leather sector entrepreneurs. India also formulated a policy to promote the leather sector. But leather sector in Bangladesh faces crisis for lack of government’s support.” Mostafizur Rahman, Executive Director of Centre for Policy Dialogue (CPD) told this correspondent, “If any restriction is imposed on the leather sector, it will face problems to fulfill conditions. So the government should be alert in due time.” The government is constructing a central effluent treatment plant in 200 acres of land at Savar industrial estate under the supervision of the industries ministry. Mostafizur Rahman also said, “About 156 tannery factories were built at Hazaribagh in the capital on 50 acres of land. Those factories don’t have proper work atmosphere. Businessmen will be able to run their business if at least two modules of effluent plant start operating. As a result, there will be no possibility of restriction on leather sector from the international buyers. Government may increase its supervision on the sector,” he advised. The tannery owners received compensation this year after a long five years’ wait. The leather traders have been demanding low- interest loans in order to balance their capability in financing, but the government is yet to take the demand in consideration. Bangladesh Tannery Association President Sahin Ahmed said low-interest loans are needed along with compensation to flourish the leather sector. “It is high time to be aware so that there will be no scarcity of raw materials in leather sector in near future,” Researcher Golam Moazzem said. He said the entrepreneurs should be encouraged for dairy firm business. He also suggested granting low-interest loans to promote dairy firm ventures. Golam Moazzem also said the government should come forward by setting up small shops in upazila level in order to facilitate smooth marketing of products from dairy firms. The tanners felt that duty-free facility for import of modern technology is also vital for boosting the leather sector. They also sought bond facilities for the tannery owners.
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