One of the leading leather export companies in Bangladesh, Apex Tannery Limited (ATL) has been negatively impacted by the COVID-19. ATL has observed losses in the Q1 of the FY 2020 due to a downtrend in sales of leather made products amid the COVID-19.
Syed Nasim Manzur, MD, Apex Footwear, a sister concern of ATL, said, “The worldwide demand for finished and crust leather has crashed due to a collapse in demand for non-essential goods, especially in the EU, Japan and the US.”
Manzur said, “It must be remembered that the buyers of finished leather and semi-finished leather exported from Bangladesh are mainly factories making such kinds of products in China, India and Italy.”
Finished leather goods-producing factories have seen massive order cancellations and a drop in new orders and so, they are still not buying leather at a rate anywhere near the pre-pandemic level.
“The worldwide demand for finished and crust leather has crashed due to a collapse in demand for non-essential goods, especially in the EU, Japan and the US.”
“Therefore, almost all tanneries have seen a large drop in sales volume,” he added.
Bangladesh’s finished leather exports declined 22.45 percent in September compared to the same period last year.
Manzur said to rouse demand, tanneries have been forced to sell their wares at reduced prices.
Apex itself witnessed a 21% drop in the price for average finished cow leather while the cost of average finished goat leather fell 23 percent.
Apex Tannery also has a large inventory of raw materials due to the low sales and most of this material is of low grade and therefore, needs to be sold at very low prices.
As a result, the company’s gross profits declined despite a 34 percent decrease in operating expenses amid the pandemic.
Apex Tannery has been setting industry standards in the Bangladesh leather export industry science 1976, equipped with the state-of-the-art Italian modern machinery and maintaining high-quality strictness.
Through the years, its production has been progressively entailing a constant expansion of buildings and machinery.
Annual production capacity is 32 million square feet and company sales turnover amounts around US$30 million, thus creating an exemplary model for corporate development in the tannery sector.