Once hailed as the next best after readymade garment sector in terms of export potential, Bangladesh’s leather sector seems to have hit a new low lately with export of leather and leather products going down over the last couple of years.
As per reports, export earnings from the leather sector in the just concluded fiscal year, witnessed a 6.06 per cent fall to US $ 1.01 billion. According to the Export Promotion Bureau (EPB) data, Bangladesh earned US $ 1.01 billion exporting leather, leather goods and leather footwear, in the fiscal year 2018-19.
In the fiscal year 2017-18, it was even worse! As per available information, in the FY18, the export earning from the leather sector was US $ 1.08 billion, during which the sector witnessed 12 per cent decline in export earnings.
Of the total earnings from leather sector in FY19, leather products earned US $ 247.28 million (which was US $ 336.8 million in the previous year), down by 26.58 per cent, while processed leather exports also declined by 10 per cent to US $ 164.62 million against US $ 183.1 million in the same period a year ago.
According to industry insiders, non-compliance and environmental issues are largely to blame for this.
“We are not environmentally compliant. This is because of the absence of full-fledged operation of CETP. Moreover, the Leather Working Group (LWG) certification, which makes it easier to sell goods to the global buyers, is hard to come by for us due to the absence of a fully operational CETP,” explained Managing Director of PICARD Bangladesh Limited Md. Saiful Islam, while speaking to the media.
The main objective of the LWG is to develop/maintain a protocol that assesses the environmental compliance and performance capabilities of leather manufacturers and promotes sustainable environmental practices. The group seeks to improve the leather manufacturing industry by creating alignment on environmental priorities, bringing visibility to best practices and providing suggested guidelines for continual improvement.
It may be mentioned here that in an effort to make the leather sector compliant and environment-friendly, Bangladesh Government had moved the tanneries from Hazaribagh to Savar. The Government decided to transfer the tanneries from Hazaribagh amid pressure from local and international rights groups, environmental activists and buyers because of their hazardous effects on public health and environment. The Industries Ministry subsequently allocated plots to 155 tannery owners through the Bangladesh Small and Cottage Industries Corporation (BSCIC) in the Leather Industrial Park, established on 200 acres of land in Savar. But construction of the new site allegedly yet to be completed, especially the CETP, the sector is forced to count loss.
“Manufacturers perform better when there is enough supply of raw materials. But the tanneries are suffering as the relocation hit the production of leather processing… Besides, some tanneries are not yet in operation as they have not completed the construction of building in the Savar park, and it affected production capacity,” underlined General Secretary of Bangladesh Tanners Association (BTA), Md. Shakawat Ullah.