Present scenario of leather industry in Bangladesh

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Offline Mrittika Shil

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Present scenario of leather industry in Bangladesh
« on: March 30, 2017, 11:39:56 AM »
Present Scenario:

At present, there are about 220 tannery units in Bangladesh and they use locally available raw hides and skins. Of them 114 are large and medium units (by local standards) and are registered with the Directorate of Industries. Others are mostly of small and cottage type and are not on the register of the government. About 150 tannery units are located at Hazaribag of Dhaka in only 50 acres of land popularly known as tannery estate. According to the records of the Bangladesh Tanners Association, about 3,000 workers are employed in the tanning industry. Besides, there are about 100 qualified technologists including foreign nationals who are working in different tanneries. Total capital invested in the tannery industry is estimated at Tk 2.5 billion, of which government/bank finance is about Tk. 1.2 billion. About 1,500 persons are involved in the process of collecting raw hides and skins and making them available at tannery units. About 100 organizations import chemicals for use in tannery industry. Bangladesh produces approximately 100-150 million sq feet of raw hides and skins, about 85% of which is exported in crust and finished form. The rest is used for producing leather goods to cater to the domestic market

The relocation of tanneries in Hazaribagh to the leather industrial park in Savar on the outskirts of the capital is likely to be completed by this year. The relocation work is going on in full swing and 20 factories have already completed construction of their new premises. The progress is slow due to shortage of fund. It will cost about Tk6,000 crore to relocate the factories and to start production in the new establishment. The Ministry of Industries decided to relocate the tannery factories from their current location in the capital’s Hazaribagh area amid pressure from the rights group, environmental activists and buyers concerned with its hazardous effects on the public health and environment. It allocated plots to 155 tannery owners through Bangladesh Small and Cottage Industry Corporation (BSCIC) at the leather industrial park, established on a 200-acre land in Savar. The government is processing the allotment plots to the rest of the tanneries in Hazaribagh that did not get a place in Savar.

Present market condition of leather market of Bangladesh:

Exports of leather and leather goods crossed $1 billion for the second year in fiscal 2014-15, according to data from the Export Promotion Bureau. In 2014-15, Bangladesh exported leather and leather goods worth $1.13 billion, compared with $1.12 billion in the previous fiscal year, making it the second highest contributor to national exports after garment.

The sector has been performing well, as higher export values have helped the sector earn over $1 billion for two years in a row. Despite earnings growth, the country missed the export target of $1.4 billion by 19.09 percent in 2014-15. Bangladesh aims to export $1.21 billion of leather and leather goods in 2015-16, which is 7.28 percent higher from last fiscal year. Italy, the UK, Belgium, Spain, France, Germany, Poland, the US and Canada are the big markets for the sector. In recent years, the exporters have been doing well in Japan, India, Nepal and Australian markets. Of the new destinations, Japan is very promising for us, as our export is increasing significantly in the market because of a duty-free advantage. The government should negotiate with Japan as the possibility of a free trade deal to be signed by different countries with the Asian economic giant may encourage it to cancel the duty benefit.

Products      Export Target for 2014-15    Strategic Target for (Jul-Fe  2015-2016)    Export Performance (Jul-Feb 2015-2016)
All products   33,200.00                             29,943.08                                                                        28,144.38
Leather                 625.00                                     258.09                                                                          187.13
Leather Product   325.00                                   169.57                                                                               241.55
Leather Footwear   447.28                              354.87                                                                                          324.03
LEATHER SECTOR   1,397.28                      782.53                                                                                                752.71

Bangladesh now exports only 0.5 percent of the global leather and leather goods market worth $215 billion, according to industry insiders. According to experts, the sector may achieve the target by the end of the current fiscal year, although it missed the target in the last two years.

The government of Bangladesh provides a support to the leather industry through various steps, including monitoring the export market, evaluating the performance of the sector by a permanent parliamentary committee, and liberal bank credit. Leather goods producers in Bangladesh tend to be associated only with manufacturing and exporting. They do not have much control over downstream operations. However, the success of a number of Bangladeshi firms in attracting such brand names as Puma, Pivolinos and Hugo Boss to source from this country proves that there is ample scope for the industry’s upward mobility

Offline azizur.bba

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Re: Present scenario of leather industry in Bangladesh
« Reply #1 on: April 02, 2017, 09:21:04 PM »
thanks very informative....