BE Magazine

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INDUSTRY
industry as a priority sector. GoB is providing
the sector with numerous incentives such as tax
incentives, and duty-free import of raw materials
and machinery for 100% export-oriented factories.
Given the availability of local raw materials, the
know-how of the supply management within the
export industry, and expressed policy support, the
leather industry has the potential to develop the
entire supply chain domestically--starting from
raw leather to leather processing, to production of
footwear and leather goods.
Bangladesh also has the potential to become an
investment hub for the global leather industry value
chain. Some modern footwear and leather-based
products manufacturing units with world-class
operations have already been set up in Bangladesh.
A growing number of large footwear manufacturers
are engaged in producing high-quality leather
footwear and leather-based products for exporting.
As the labor cost in PRC is rising, many global
brands are already sourcing from Bangladesh.
Other than labor cost, pollution is a critical factor
for which many factories in PRC are likely to shut
down. The government in China reportedly shut
down 17,000 polluting industries in 2015. Around
1,000 manufacturing firms in the capital of Beijing
are expected to be shut down by 2020. Under the
circumstances, most of the buyers depended on
China are diverting to Vietnam for high-quality
leather goods. Here, for Bangladesh, there is an
enormous opportunity ahead to give it’s leather
industry a big boost.
Relocation of Tanneries
Hazaribagh, in capital Dhaka, with about 200
tanneries formed the backbone of Bangladesh’s
leather industry. However, these factories operated
with little or no government oversight with regard
to environmental regulations and labor laws.
Poor environmental standard maintained by local
leather factories and tanneries has often come
under international as well as national scrutiny,
effecting a negative impact on the export potential.
To make the leather sector compliant, GoB took
initiative in 2003 to relocate the tanneries from
Hazaribag to Savar. After extended delays, the
government completely stopped rawhide supply
and cut power and gas supplies to the tanneries in
Hazaribagh in April 2017, to compel the owners to
relocate to Savar Leather Industrial Estate.
Relocation of tanneries from Hazaribagh to Savar
Leather Industrial Estate with Common Effluent
Treatment Plant (CETP) is going to boost leather
exports positively by addressing longstanding
compliance issues.
The writer is the former director of Leather-goods &
Footwear Manufacturers & Exporters Association of
Bangladesh (LFMEAB). He can be reached at leatherex.
hassan@gmail.com
December, 2019
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