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An overview of Bangladesh leather industry

Bangladesh meets the demand for about 10% of the world’s total leather market.

Leather Industry was developed in Bangladesh on a large-scale mainly in the 1970s as one of the largest industry of Bangladesh. The government considers ‘leather goods and footwear’ as one of the main growth generators for the country. Bangladesh leather industry makes leather-based products such as garments, shoes, belts, bags, and jackets, suitcases, wallets, and some fancy items. These products are sold both in the domestic and foreign markets. Leather footwear is the fastest growing segment of the leather industry. Bangladesh meets the demand for about 10% of the world’s total leather market.

An overview of leather industry in Bangladesh
Figure 1: ‘Leather goods and footwear’ is one of the main growth generators of Bangladesh.

Exports trend of Bangladesh leather industry

According to the Leather Goods and Footwear Manufacturers’ and Exporters’ Association of Bangladesh (LFMEAB), the domestic demand of leather footwear and goods was worth about Tk 160 billion but 40 percent of the demands are met by importing goods from abroad.

The leather industry, country’s second largest export-earning industry, is observing a continuous decline in export earnings. According to the data of Export Promotion Bureau (EPB), export earnings from the leather and leather products declined by 16.11% to US$434 million in the five months of the fiscal year 2018-19, which was US$518 million in the same period last year.

In fiscal 2017-18, according to data from the EPB, export of leather, leather goods, and footwear were USD 1.08 billion. In 2016-17, Bangladesh exported leather and leather goods worth $1.23 billion, compared with $1.16 billion in the previous fiscal year. Export earnings from the leather & leather products declined by 16.11% in the five months of the current fiscal year. Therefore, it shows that the sector is not having a strong and remarkable growth.

Fiscal Year

Leather Export Earnings(in billion US$)











Export destination

About 85% of leather and leather products of Bangladesh are exported abroad, mostly in the form of crushed leather, blue wet leather, finished leather, leather garments, and footwear. Most of the leather and leather goods are exported to the EU, the US, Australia, Japan, Singapore, and South Korea etc.

Leather and leather goods market for Bangladesh






South Korea

Investment trend

At present, Bangladesh has 165 footwear and leather factories, in addition, the country has 161 tanneries that process raw hides into finished leather. Investment in leather goods and footwear has been rising significantly. Bangladeshi entrepreneurs are investing in compliant factories to produce high-quality footwear that will eventually reduce the dependence on the import of leather goods.

We export footwear at zero percent tariff rate and that’s perhaps another reason why foreign buyers are eager to come and invest in Bangladesh.

Mohammed Nazmul Hassan, Vice President, LFMEAB

Mohammed Nazmul Hassan, Vice President of the Leather Goods and Footwear Manufacturers’ and Exporters’ Association of Bangladesh (LFMEAB) and Managing Director of Leatherex Footwear Industries Limited told the journalists, “Every year, 15–20 new leather products and footwear factories are being opened in the country.”

China is still the biggest leather product sourcing country in the world, but if any buyer wants to buy leather footwear from China must give 17 percent import tax to the Chinese government.

“We export footwear at zero percent tariff rate and that’s perhaps another reason why foreign buyers are eager to come and invest in Bangladesh,” he said.

According to the data LFMEAB, wages have increased in competitor countries like China by 19 percent, followed by Vietnam, 14 percent; India, 13 percent; and Indonesia, 30 percent. Because of higher wages, a lot of foreign leather products and footwear manufacturers have been compelled to shut down their businesses in those countries, said LFMEAB officials.

Opportunities for the sector

The main benefit of the leather industry of Bangladesh is the ample supply of raw materials. The availability of raw materials is the biggest strength of the sector. As Bangladesh’s RMG is going ahead smoothly, so leather industries of Bangladesh will get a plus point in it. When RMG has brought up many leading brands in Bangladesh with their direct presence, they will be very happy to put their own orders of leather products in the same country Bangladesh from where they are sourcing apparels. So the growth of textile and RMG sector is actively helping the growth of leather and allied industries like footwear and other leather goods industry.

overview of leather industry in Bangladesh
Figure 2: Workers are working in a leather factory in Hazaribagh, Dhaka.

Some opportunities are highlighted here:

  • Huge untapped international market, as well as the domestic market
  • Increasing global demand for value-added, diversified products
  • The scope of developing backward linkage business
  • High-value addition potential
  • Labor intensive; employment opportunities
  • Local and Foreign Direct Investment opportunity in value-added leather products sector
  • China is losing competitiveness
  • Government policies toward leather exporters; GSP, Cash Incentive; etc.
  • Increasing International and Local demands for value-added leather products
  • International Fashion and sourcing houses in Bangladesh for RMG showing interest in leather products

Challenges of the sector

Current exports earnings from leather industry show that there are surely many challenges for which it could not catch its targeted amount. Here we have highlighted some challenges:

  • The absence of integrated policy; no long-term policy regarding Common Facility Center (CFC), SME cluster development, Branding/promoting Bangladeshi leather products
  • Political instability, corruption
  • Lack of backward linkage industry for chemicals/accessories and substandard quality of the products
  • Illegal export of raw hides/skins
  • Potential buyer’s stringent stands for compliances, and delay in building Common Effluent Treatment Plant (CETP) at the leather village, Saver, Dhaka

Government initiatives

Bangladesh government has taken many steps to upgrade the industry. The government has already set up a modern leather industrial estate in Savar and two more leather industrial parks will be set up in Chattogram and Rajshahi for unlocking the huge potentials of the country’s leather sector if the current govt. is re-elected in the next election.

Tanneries of the Hazaribagh area have been shifted to a modern environment-friendly tannery estate in Savar. Tanners have now the option to build their industrial unit by applying modern concepts. They can add updated hydraulic and pneumatic machines, apply the latest production processes, and use technology upgrades. After shifting earning exports is very poor in the leather sector.

Around 155 tanneries are relocated to the Savar tannery estate. Around 40 small tanneries could not afford such relocation and stopped their operations. Big tanneries, however, grabbed the opportunity to build their enterprises with enhanced production capacities by including additional machinery and technology. In Hazaribagh, the installed capacity of this cluster was around 280 million sft, but these tanneries have set up a target of 450 million sft of yearly production capacity in Savar.


Current demand for the leather, leather product and footwear in the world is nearly $215 billion where Bangladesh exports only US$ 1.08 billion. As a result, we have a huge possibility to grab the market with our highest level of efficiency and proper strategic planning. The government should plan and provide facilities to increase the value addition as the sector can move forward easily.

Also Read: The leather and leather products industry is in the brinks of huge growth possibilities

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