Bangladeshi leather footwear exports have registered a steady growth of 9.22%, by earning £60.38m in first the month (July) of the current financial year (FY2019–20). This growth is down to increasing investment in the sector. For the same period during the last fiscal year (FY2018-19) the sector made £55.28m, according to data from the Export Promotion Bureau.
The current growth is a sign that Bangladeshi entrepreneurs are putting money into compliant factories in order to produce high-quality footwear.
Saiful Islam, president of the Leather Goods and Footwear Manufacturers' and Exporters' of Bangladesh (LFMEAB), said that the steady growth could be attributed to three factors: "First of all, factories producing footwear are environmentally compliant—they conform to environmental laws, regulations and standards".
“Second, we're getting the benefits of investment in this sector. This is reflecting the growth prospects in the long term. As a result, 20 new export-oriented footwear factories have come up and started operations in Bangladesh in FY2017–18,” he added.
"Finally, labour costs are increasing in China, prompting a shift to high-tech industries in that country. So, if investors decide to move to a cost-competitive manufacturing base, Bangladesh is the most lucrative option," he noted.
He also said Bangladesh has been exporting footwear to EU member countries, Japan and North America. When asked about the challenges, Saiful Islam said: “This sector is facing some challenges. They include reduction of the lead time to within 45 days, establishment of more compliant footwear factories, and long-term policy support.”
Bangladesh’s leather sector is the country’s second largest export earner with an income of nearly £1b. It also directly and indirectly employs roughly one million people, he added.
Saiful Islam noted that low labour costs, competitive pricing and the availability of raw materials could help Bangladesh take hold of a bigger share of the global market. “If long-term and sustainable policy support is implemented, it's possible to achieve a growth level of 15-20%,” he added.
According to the Bangladesh Tanners’ Association (BTA), 350 million sq ft of leather is produced annually in Bangladesh. Of this amount, 20–25 per cent goes to meet the domestic demand, while the rest is exported. The government considers “leather goods and footwear” as one of the main growth generators for the country to cross the middle-income threshold.
According to the LFMEAB, approximately 220 tanneries, 2,500 footwear-manufacturing units and 90 large firms are involved in producing leather goods and footwear, mainly for exports. Bangladesh main export destinations for their leather goods and footwear are the UAE, Argentina, Austria, Australia, Belgium, Canada, Switzerland, Chile, China, Germany, Denmark, Italy, Spain and Finland.
The country currently exports roughly £1b worth of leather goods and footwear annually.
