Introduction
Bangladesh is situated in the Southeastern part of the Indo-Pak Sub Continent. Due to its favourable geographical conditions, animal leather is of very high grade and quality. Bangladeshi leather is widely known around the world for its high qualities of fine grain, uniform fibre structure, smooth feel, and also natural texture.
There is high international demand, particularly for Bangladesh glace-kid produced from goatskins, which is famous for its grain quality. Wet-blue and crust from goatskins and cow skins are also in high international demand.
Leather export scenario
Around 40-50 % of the annual raw leather supply comes during the 3 days of the Eid-ul-Adha every year and the tannery industry is not able to prepare, process, and store the leather scientifically for export, though almost 85% of the output from the leather manufacturing sector is presently being exported.
Nasim Manzur the Chairman of Landmark Footwear Ltd said, “Bangladesh would be capable of adding 80-90% local value in the sector if the export was facilitated.”
The government, last year, permitted five local tanneries to export wet blue leather for one year as a measure to create a demand for rawhide in the domestic markets during the peak season at Eid-ul-Azha. The commerce ministry gave conditional permission after the authorities of the tanneries submit applications to the ministry in this regard.
The five local tanneries are: Messrs Quader Leather Complex, Kalam Brothers, ASK Investment, Leather Industries of Bangladesh (Unit-2), and Amin Tannery Limited. The tanneries have to export to the permitted countries only. The five tanneries have been allowed to export 10 million square feet of wet-blue leather, meaning each tannery has been allocated 2 million square feet.
Recently the commerce ministry is drawing up a ten-year perspective plan. It setss a target to increase the leather sector’s export earnings from below $1 billion to $10-12 billion by 2030.
If Bangladesh can live up to the target, it will be among the top ten global exporters in the sector, believe officials at the commerce ministry.
Leather types
According to an industry specialist, wet-blue leather is the leather that is obtained after processing raw leather and removing fur from the animal’s body. It refers to chrome-tanned leather, which is neither dried, dyed nor finished. Nowadays, the following types of leather are exported to the worldwide market from Bangladesh:
- Crust Leather (Cow, Goat, Sheep, Buffalo in variety)
- Finished Leather (Cow, Goat, Sheep, Buffalo in variety)
- Split Leather in Wet Blue stage (Cow & Buffalo)
For Bangladesh, the ability to export raw materials for the leather industry has gradually declined.
Export of wet-blue leather might put an end to the years-long clutter in the leather sector and also break the syndicates, said the sector leaders.
Beginning story of the tannery industry
Leather processing is an old assembling sub-portion in Bangladesh with a long succession of more than six decades. During the Pakistan period 1947-1971, the tannery industry was handled by non-Bengali vagabonds from India, who had the knowledge of establishing the tannery industry. An export of wet blue leather processed and decided completely from the year 1980-1981. After 1981, the policy support measures proposed to raise the level of value addition in the industry provided the incentive for new private interest in the leather industry.
The prohibition on the export of wet blue leather in June 1990 prompted at setting up of modern leather tanning units. To modernize this leather industry and also to make it a good alternative to the RMG sector. The authorities move the oldest leather plants from the Hazaribagh area to Savar in 2003 and began distributing plots to factory owners in 2009. ‘Green factory’ idea in the footwear business has been started in Bangladesh from this time.
Tannery’s unmanageable waste
The tannery industry releases a huge amount of liquid waste every day. These dangerous wastes contain chromium, lead, sulfur, ammonium, salt, and different materials, which are extremely polluting the capital city and the Buriganga river. It may cause genetic disorders, birth deformities, and cancer if it gets into the nourishment cycle. Relocating the tannery industry to Savar Tannery Estate to ensure environmental compliance, the leather sector will be able to increase exports to markets such as the European Union and the United States and will attract significantly more foreign investment into the leather industry in Bangladesh.
Then there is the yet-to-serve Central Effluent Treatment Plant (CETP) at the Savar tannery village and the lack of scientific solid waste management, which are still hindering tanneries from getting global compliance certifications like those from the Leather Working Group (LWG) a must in recent years for exports to serving the world.
Current contravention
The Leather sector of Bangladesh is little competitive because of its low labor cost variation, availability of cow leather in the local market, and favorable business environment. This is complemented by the existence of various organizations and institutional arrangements like the Export Processing Zone (EPZ) etc. and duty-free access to major international markets.
The consequences of this have begun unfolding as the country has so far achieved only 1st -10th of its 2021 export target for leather and leather products. Alongside taking realistic steps for transforming the tanneries, the government also needs to incentivize local footwear and leather, product manufacturers. According to the tanners, such leather was exported from Bangladesh until 1990 when the government banned it.
Why leather export declining
Three decades ago, raw leather from traditionally grown Bangladeshi cattle had good international demand. Some international leather product brands used to procure quality leather from Bangladesh. Crust leather and raw leather were also being exported at that time.
Reasons for decreasing leather export:
- The gradual dominance of raising high-yielding cattle deteriorated the quality of the leather. Additionally, the tendency of amateur butchers to extract meat until the end of the skin damages around one-fifth of the raw leather.
- Bangladesh is struggling to export high-graded leather too, while the world gets flooded with low-grade ones, which are often dumped in landfills since the cost of processing surpasses the ultimate value.
- Over the last two decades, the world has been observing a decline in demand for leather-made footwear and some other products amid the rising popularity of synthetic ones.
Global markets
In 2017, Bangladesh also imposed a poorly managed shifting of the tannery hub to Savar from the Hazaribag in Dhaka. All but a handful of tanners managed to operate there that year. The tannery industry lost many foreign buyers then and has yet to gain the ground back. So, along with the decline of leather exports, some leather product exporters are also being forced to source a large portion of their leather from abroad due to local suppliers lacking certification, and in some cases, issues with the standard of the leather.
Leather Working Group’s certificates are important in attracting foreign buyers. If factories are not fully compliant, it is not possible to get this certificate.
However, to get foreign buyers and higher prices for products, the certificate is mendatory.
Foreigners are now buying leather goods at lower prices due to poor compliance. The price will go up once the factories get compliant. Export income will also increase.
Discussion
Bangladesh is a country where raw material like wet-blue cow leather is available and also cost-effective. Most of the leather exporters from Bangladesh are found to have established a good relationship with importers from Italy, West Germany, the USA, and several other developed countries.
It is affirmed that the cost of neighbourhood crude stows away and skins and of wet-blue has been kept misleadingly high, well over the global value, as a result of coordinated exertions by some deceptive western merchants who might want to execute the developing crus and completed calfskin part of Bangladesh by ceasing the proposed restriction on wet-blue fare. Which is a threat to our country’s development in this sector.
Now the use of environmentally compliant output from the Savar will lead to greater value addition in the Bangladesh economy, as it will encourage graduation of the industry to finished leather goods and footwear. The Government of Bangladesh has to take proper steps to stop open-air slaughtering as soon as possible and adopt scientific slaughtering houses, where modern methods can save raw skin from damage and reduce environmental pollution also.
