The leather industry has experienced a remarkable change over the last six years. Over this period the leather trade of crushed leather and finished leather has witnessed a sharp fall of nearly 29 percent, while export of footwear and leather products revved up 761 percent.
Data from the Export Promotion Bureau of Bangladesh reveals that the country's crushed & finished leather export was $230 million in fiscal year 2011-2012, but in the last six years it fell to $164 million. In the same time, leather footwear and goods export went up from $99 million to $855 million.
Industry people said the environmental compliance issue has dragged down the tanned leather trade. However, footwear and leather products have seen handsome growth riding on some complaint units and imported leather. Those units with international certification process their required leather for footwear in their own factories.
"Now nobody wants to buy any products from non-compliance industries. The non-compliance issue is pulling down the leather industries in Bangladesh," said Md Saiful Islam, president of Leather goods and Footwear Manufacturers and Exporters Association.
He made the observation at the sidelines of a press conference of the 7th edition of Leather tech Bangladesh 2019 at a city hotel on Thursday evening.
Hazaribagh, the former tannery estate of Bangladesh, had been grooming the industry since the independence of Bangladesh. Leather industries at the estate had been bringing handsome foreign currency as the compliance issue was not popular then. In the wake of the growing popularisation of the environment issue, the government shifted the tannery estate to the outskirts of Dhaka.
Terming the shifting a bold move of the government, Saiful said, "The central effluent treatment plant of the Savar leather industrial park will achieve the Leather Working Group (LWG) certification by 2020. Once the new estate gets international approval, the tanned leather industry will return to its previous track."
"It may even satisfy the government fulfilling the $5 billion export target by 2021. The government has taken the certification issue very seriously."
Since the Central Effluent Treatment Plant (CETP) installation is still incomplete, the factories do not get certificates from the Leather Working Group, which is also a reason for the fall in the leather export, he said adding that international buyers are now aware and they buy products after examining the LWG certificate.
Explaining the rapid growth of leather footwear and goods, he said some units have already achieved Leather Working Group certification while many are in the pipeline. Those compliant industries tanned the large portion of required leather in their own facilities, and use the tanned product for footwear and leather goods including bags, wallets, belts, jacket suitcases, garment accessories and some fancy items.
On the other hand, the size of the domestic footwear market is around Tk15,000-22,000 crore. Non-leather and synthetic footwear dominates the domestic market. The market relies on 50 percent import and 50 percent local items.
Saiful Islam said "Twelve years ago, tanned leather contributed about 83 percent to the total volume of leather and footwear export. Now the footwear and leather goods are leading the export while tanned leather has been lagging behind.
At present, leather footwear export rules the business with sharply dropped trade of intermediate leather, he added.
In the press conference ASK Trade & Exhibitions Pvt Ltd managing director Tipu Sultan Bhuiyan said the three daylong 7th edition of Leather tech Bangladesh 2019 is set to begin at the International Convention City, Bashundhara (ICCB) from October 31 this year with an aim to bring global technology to the doorsteps of the local industry to catalyse its growth and modernisation.
ASK Trade and Exhibitions Pvt Ltd and Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh are jointly organising the event.
The tradeshow will accommodate about 300 exhibitors with the latest machinery, chemicals and accessories for Leather, footwear and leather goods sectors from 20 countries.
Commerce Minister Tipu Munshi, MP is scheduled to inaugurated the event as chief guest of opening ceremony.
Among others, Kazi Rowshan Ara Shumi, Executive Director of Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB), Nanda Gopal K, Director of ASK Trade and Exhibitions Pvt. Ltd were present at the press conference.
The exhibition will open every day from 11am to 7pm with free entry.