The first tannery in Bangladesh territory was set up at Narayanganj by RP Saha sometime in the 1940s. It was later shifted to Hazaribag area of Dhaka, which turned into a location that now accommodates a large number of tannery units. Leather Industry developed in Bangladesh on a large-scale basis from the 1970s. About 95% of leather and leather products of Bangladesh are marketed abroad, mostly in the form of crushed leather, finished leather, leather garments, and footwear. Most leather and leather goods go to Germany, Italy, France, Netherlands, Spain, Russia, Brazil, Japan, China, Singapore and Taiwan. Value addition in these exports averages 85% local and 15% foreign. More than 100 modern tannery units are now in operation in the industry. These are located mostly in the Hazaribagh area of Dhaka city. In 1998, the sector exported 178 million sq ft of leather and earned $160 million.
The country is endowed with luxurious vegetation encouraging a large livestock population. The quality of the raw hide and skin is relatively good, as barbed wire fencing that damage the skins of animals is not used in the natural farms and fields. Black goatskin of Kushtia is particularly noted for its fine grain structure and tensile strength. The tradition of humane care of domestic animals also contributes significantly to keeping the leather quality high.
About 40% of the supply of hide and skin comes from animals slaughtered during the annual Muslim festival of eid-ul azha. In addition to daily consumption of meat, festivals, Muslim weddings, and other celebrations yield a substantial supply of hide and skin. The tanning industry got a big boost following the government decision to promote more value addition in exports. The installed capacity for crust leather production increased. At present, it is double the domestic supply of raw hide and skin. Investments are also made in installing new finishing capacity. The trends encourage more tanneries to produce finished leather on a commercial basis.