In April 2017, the government stopped rawhide supply to Hazaribagh area and forced about 200 tanneries to shift to Savar Leather Industrial Estate. As a result, the export from leather products is dropping because many tanners failed to move their business to Savar.
In the eleven months of the fiscal year 2018-19, export volume from leather products declined by 5.53% compared to the previous fiscal year of 2017-18.
According to statistics provided by the Bangladesh Export Promotion Bureau (EPB), the export earning from leather and leather products was the US $943.83 million in July-May period of 2018-19 fiscal year. During the same period in the previous fiscal year of 2017-18, the earning was US$ 999.07 million.
The sector has been witnessing a negative growth rate since FY2017-18 after the relocation of tanneries to Savar industrial area. The sector witnessed a growth of 6.29 percent in 2016-17 and the export earning was US$ 1234 million.
Despite the downward growth rate of leather and leather products, the leather footwear industry is maintaining a decent growth rate. In the first nine months of FY2018-19, leather footwear was exported worth of US$ 458.76 million showing a growth rate of 7.86% than the previous year.
This has happened because the footwear industry can import leather from foreign countries alongside collecting that from domestic sources.
Apart from footwear products, the export of leather products showed an overall negative growth rate of 37.37% comparing to the previous fiscal year.
The reason behind this declination as many international buyers switched over to other markets from Bangladesh during the relocation process of tanneries. The industrialists couldn’t either retain the regular buyers nor create new markets.
120 out of 154 tanneries are producing leather products currently in Savar Tannery Estate. The installation of Central Effluent Treatment Plant (CETP) is still incomplete. As a result, the factories are not getting certificates from the Leading Working Group.
This has also contributed to the fall of export earning from leather products. Overall, we can say that the leather industry of Bangladesh is currently passing a tough time now.