Bangladesh leather sector flounders

6 March 2019

Exports of leather and leather products by Bangladesh have fallen significantly during this financial year in the July–January period compared to the same period in the previous fiscal year.

Tannery owners are blaming a lack of product variety and slackness when it comes to vigilance on the part of the tannery estate for hurting the growth prospects of the sector. They also said the environment has been badly affected at Savar as a result.

According to the Export Promotion Bureau (EPB), the sector registered a negative growth rate of 11.71%, resulting in earnings of $626.42 million in the current financial year 2018–19 (July–January). This figure was $709.51 million during the same period of 2017–18.

Chairman of the Bangladesh Tanners’ Association (BTA), Shaheen Ahmed, said that in 2013 leather prices went up in the world market, and since then, renowned leather manufacturers worldwide started producing artificial leather products to address global demand.

“Because of continuous negative growth for a long period of time, we are losing foreign and local investment,” he added.

Secondly, he said, “China used to take raw hide from us to produce raw material by carrying out further processing. The US Government has signalled an imposition of 25% tariff on a number of Chinese products (including leather) entering the US market. Eventually, this affected us badly and China stopped taking raw hide from us.”

Ahmed also said 155 factories have been shifted to Savar. Of these, 125 factories are running and 25 tanneries have fully started their operations but are processing only crust leather.

He explained that this sector is not getting the advantage of the Central Effluent Treatment Plant (CETP) and is struggling hard to achieve global standards in terms of compliance. 

Only leather footwear registered a slight positive growth rate of 7.35%, resulting in earnings of $384.30 million. This figure was $357.98 million during the same period in 2017–18.

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