Due to environmental pollution caused by hide processing, lack of product variety and the relocation of tanneries to the not-yet-functional Savar Tannery Complex, Bangladesh’s leather industry has been struggling to attract new investment.
Exports of leather and leather products slumped significantly in FY2018-19 (July–May) compared to the previous fiscal year. According to the Export Promotion Bureau (EPB), the sector has registered a negative growth rate of 5.53% by fetching £750.66m in FY2018-19 (July-May). This figure was £794.59m during the same period of FY2017-18.
Shaheen Ahmed, chairman of the Bangladesh Tanners’ Association (BTA), has said that renowned leather producers are moving towards producing artificial leather products to address the global demand as leather prices have soared in the world market since 2013.
“We are losing foreign and local investments due to continuous negative growth,” he added.
“China used to take raw hide from us to produce raw materials by carrying out further processing. But the US government has signalled the imposition of a 25 per cent tariff on a number of Chinese products (including leather products) entering the US market. Eventually, this decision has affected us badly and China halted taking raw hide from us,” he explained.
Only leather footwear registered a slight positive growth rate of 8.96%, resulting in earnings of £443.42m. This figure was £406.87m during the same period in FY2017-18.
When asked, Ahmed said import duties on chemicals used for protecting raw hide have increased, affecting the export of crust leather. Crust leather has experienced a negative growth of 6.42% in FY2018–19.