The government must formulate a master plan to revitalize the country’s leather sector with the present falling export trend and the coronavirus pandemic pushing the sector into danger.
The sector as one of the major sources of foreign exchange earnings, needs urgent care to bring it out of the hole of uncertainty to boost the economy during this ongoing crisis, experts said.
They said Bangladesh needs to produce high-end leather products, attract massive domestic investment, and enhance the capacity of private sector manufacturers to boost the sector.
Bangladesh has a share of only 0.5 percent in the world leather trade, they said, while suggesting a planned and coordinated intervention from the government for raising exports in the leather sector. It is high time for intervention, they added.
Export earnings from leather and leather goods decreased by 16.54 percent to $154.74 million in July-August of FY-2021 from $185.41 million in the same period of FY-2020.
Export earnings from leather-footwear went down by 11.89 percent to $105.23 million while other leather products decreased by 22.94 percent to stand at $34.02 million in the period.
In fiscal year 2019-20, leather and leather product exports declined by 21.79 percent to $797.6 million from $1.01 billion in FY19.
In the current FY 20-21, the target from this sector has been set at $1.09 billion. The government has set an export earning target of $5 billion by 2021, which is now impossible to attain, economists said.
It has taken 17 years for the government to set up a planned leather industry town on 200 acres of land at Hemayetpur in Savar, they mentioned.
The Central Effluent Treatment Plant (CETP) is not yet fully ready, they said adding that work on the dumping yard at the designated place for dumping solid waste has also not started.
Environment is being polluted in Hemayetpur as tannery has been shifted from Hazaribagh without full preparation of the leather industry town, they mentioned.
Large European-American buyers are not buying Bangladeshi leather because it is not environmentally friendly, they informed.
That is why the export of leather and leather products has been continuously declining since the 2016-17 fiscal year.
On the other hand, the price of sacrificial animals’ leather has been lower for four years.
Last time, the raw leather of the sacrificial animal was sold at a very low price.
Experts said the leather sector has been facing huge difficulties to compete in the global market in the last couple of years, now the crisis has been compounded further due to the corona epidemic, they opined.
Since shifting of the tannery industry from the city’s Hazaribagh area to Savar, the country’s leather sector has been facing serious difficulties especially for lack of a CETP and water treatment plant, pushing many tanneries into a risky zone, they said.
They added, many leather companies are failing to fulfil buyers’ demand, causing a constant fall in export earnings and driving the buyers away as well.
The harassment in the name of relocating industries from Hazaribagh without fixing the leather industrial village of Savar will never be helpful to make up the losses, they added.
Commerce Secretary Mohammad Zafar Uddin said, “Leather industry is the second largest export sector in the country. This sector has 3 lakh people working directly and 6 lakh people working indirectly.”
In 2021, the target for the export of leather goods is $5 billion.
He said, “We have also worked during the lockdown to complete the CETP of Savar leather industry fast.”
Bangladesh Tanners Association (BTA) President Shaheen Khan said the leather industry was plagued with numerous bottlenecks in 2017, and they could not make a recovery as yet.
“We are still facing various problems,” he said adding that the government should take immediate action to solve this problem to attract foreign buyers in order to woo more investment in the sector.
