A seminar on "Linking Bangladesh to the global value chain” was organized on the sidelines of the 2023 edition of the Bangladesh Leather Footwear and Leather Goods International Sourcing Show (BLLISS) where experts opined that Bangladesh should go for integration into the global value chain to make use of the big worldwide market for leather products and footwear.

A robust supply chain can improve a country's international competitiveness and attract foreign investment, so that Bangladesh should also focus here, they said in the seminar held on 13 October.

The three-day exposition jointly organized by the commerce ministry and the Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh (LFMEAB) held at the International Convention City Bashundhara in the capital.

The country has everything that it would need for the global footwear industry's backward linkage, but still it is failing to register a growth in exports of leather products and footwear, Mir Ehsanul Huq, Commercial Director of Amann Bangladesh Limited, said at the seminar.

The industry has increased its capacities and competitiveness over the years and the LFMEAB and the Government have been working to tap the potential to become a cost-effective, sustainable, and reliable international manufacturing hub in leather products and footwear value chain, said Hasnat Md Abu Obida, Managing Director of the Maf Shoes limited.

About 120 new factories have been established in the industry in the last six years, he said.

The sector has huge potential in Bangladesh as the production of products of many popular foreign bands has been increasing in the country, said Silvia Popp, Project Manager of the GIZ.

Export Scenario of leather products

Though the government has declared leather as a priority sector and different projects undertaken by the commerce ministry to improve the leather and footwear industry's export potential, its export scenario is not satisfactory.

In FY 2021-22, it’s earning from exports at US$1.25 billion was the highest in a decade. Unsurprisingly, in the last fiscal (FY2022-23), the government expected a 15.64 per cent year-on-year export growth from this sector. However, the expectation could not be fully met, as the export earnings fell short of the target of US$1.44 billion by 1.5 percent.

However, according to the LFMEAB, the share of exports to the US has grown to 26 percent, with over 18 million pairs of shoes worth $453 million being exported.

Bangladesh's footwear exports to India have also seen a massive 434 percent increase in the past five years, it added.

"If we can do it [develop area-based tannery industries], the preservation, processing and use of leather would go up. Because it will develop as a big industry for us," said Prime Minister Sheikh Hasina while inaugurating the Bangladesh Leather Footwear and Leather Goods International Sourcing Show (BLLISS).

Bangladesh is now delivering shoes, wallets, sandals, belts, accessories, flip-flops and different types of boots to several leading global retailers, including Fila, Deichmann, Timberland, Aldo, H&M, Marks and Spencer, s.Oliver and Wolverine.

There are now 264 factories in the country of which 98 percent have received compliance status. These factories are directly employing 200,000 lakh people.

The challenge is longer lead times for domestic producers, who take 90 to 100 days compared to 45 to 60 days in competitor countries.

Higher value addition, product diversification, and emerging design capabilities had enabled the industry to begin shifting away from only low-price products.

There are about 64 local leather goods companies in Bangladesh, including Apex Footwear, Jennys Shoes, and Bay Footwear that export various items, mainly to Japan, the EU, and to some extent, the US.