Export Promotion Bureau (EPB) data shows that the exports of leather and leather products fell significantly in the first nine months (July–March) of the current financial year 2017–18.
Leather exports following slightly negative growth rate of 8.04 per cent,
In the 2016–17 fiscal year export figure was USD 922.96 million but at same time this year export falls to USD 848.78 million.
Industry experts says : the reasons behind such negative growth to the increasing lead time caused by congestion in Chittagong port, the deficit of skilled workers and the lack of product diversification.
Bangladesh Tanners’ Association (BTA) chairman Shaheen Ahamed told that exports fell after leather factories moved to the Savar Tannery Complex, as the utility and infrastructure services there are not up to the mark. Besides, most of the factories there are not compliant and that is why foreign investors are not willing to invest in the Savar leather industrial park, he added.
Noting another reason, Ahamed said import duties on chemicals used to protect raw hide have increased, which influences the exports of crust leather. Crust leather has experienced a negative growth rate of 30.88 per cent in the current fiscal year (2017–18).
Ahamed, also the managing director of Kohinoor Tanneries Ltd, said: “Around 70,000 people used to work in the tanneries in Hazaribagh before we shifted all the factories to Savar. As a result, many people have lost their jobs. This has hit the exports of leather goods.”
He also noted that among the 150 factories, only 70 to 80 tanneries have begun operations at the Savar Leather Industrial Park. “The solid waste disposal system there is not functioning well. Moreover, roads go under water if there is even a little bit of rain,” he added.
Describing the opportunities before this sector, Ahamed said since raw materials are available, 350 million sq. ft of leather are produced annually in Bangladesh. Of this quantity, 20–25 per cent goes to meet domestic demand, while the rest is exported. There is a huge domestic demand for leather goods in Bangladesh, he noted.
Regarding future prospects, Ahamed further said: “Leather was declared the ‘Product of the Year’ last year. The industry is now coming out of the shadows and has become an important contributor to the country’s export basket. We need government policy support and infrastructure facilities to achieve the target of USD 5 billion by 2021.”