Soft loans to relocate tanneries in Bangladesh

27 January 2014

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Dhaka Tribune

Tannery owners in Bangladesh have urged the government for long-term loans with less than 5% interest rates to fast-track relocating tanneries from Hazaribagh to Savar. Tanners will have to invest around Tk 7,500 crore (about £580 million) to relocate factories, establish new plants and start commercial production.

"We need soft loans to relocate the tanneries as leather is a capital-intensive industry," said M. Abu Taher, chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters' Association. If not, he added, many will have to shut down.

Tannery owners also asked the government to relax land usage rules, which currently say that at least 33% of total land area is left to set up a factory. As a result, the proportion of free space per plot is too small since leather factories need more space for heavy machinery.

Awami League lawmaker Sheikh Fazle Noor Taposh asked of the government to include the Savar Tannery Estate as a time-bound litmus project in order to get momentum for relocation since the country's leather industry has enormous potential and can serve as a safety net against any downswings from the garment industry.

The industries ministry has already allocated more than 205 plots on 200 acres to 155 tannery owners through the Bangladesh Small and Cottage Industries Corporation (BSCIC), a wing of the ministry. The government's plan as it stands is to complete relocation by 2016.


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