Bangladesh’s footwear sector is poised for significant growth, offering attractive investment prospects in both leather and non-leather segments. The Bangladesh Investment Development Authority (Bida) made this assertion in a newsletter, while also noting the challenges that persist in sustaining growth and enhancing competitiveness.
Shah Mohammad Mahboob, an executive member of Bida, emphasized the immense potential within the industry, stating, “If sufficient facilities are provided, the industry will take off and become a major export earner.” He mentioned ongoing negotiations with the National Board of Revenue to secure the necessary incentives for attracting investment.
Bida reports that the rise of non-leather footwear, driven by shifting consumer preferences and environmental concerns, is creating new investment avenues and has outpaced leather footwear in growth over the last decade. Data from the Export Promotion Bureau (EPB) indicates that non-leather footwear exports surged by 120 per cent in the past ten years, significantly surpassing the 6 per cent growth rate of leather footwear during the same period.
In the first seven months of FY ’25, non-leather footwear exports reached $318.09 million, marking a year-on-year increase of 40.11 per cent, with expectations to exceed half a billion dollars by the fiscal year’s end. Despite being the eighth-largest footwear producer globally, Bangladesh’s leather goods and footwear continue to dominate, generating $1.6 billion in exports last fiscal year.
Riad Mahmud, managing director of Shoeniverse Footwear Ltd., part of the National Polymer Group, highlighted the sector’s potential, stating, “If any corporate entity makes a major investment in the non-leather footwear sector, it will be a profitable venture.” However, he pointed out that Bangladesh currently has only 15 compliant non-leather shoe factories, each requiring a capital investment of around Taka 35 crore, which presents a barrier to market entry.
Bida also noted that many tanneries and footwear factories face difficulties in meeting global environmental and labour standards. Mahmud added that the industry is grappling with a shortage of skilled workers and complicated customs procedures for importing raw materials and exporting finished products.
Hasanuzzaman Hassan, chairman of BLING Leather Products Ltd., a non-leather shoe factory in rural Rangpur, shared his success story of exporting to countries such as Poland, Turkey, the UAE, Germany, India, and Canada. Since starting production in 2020, his company has seen promising growth, earning Taka 320 crore from synthetic shoe exports last fiscal year.
Despite these successes, Bida highlighted several challenges that must be addressed for the industry’s continued growth. The lack of a domestic supply chain for synthetic materials is increasing production costs and lead times, negatively impacting global competitiveness. Additionally, inefficiencies in customs clearance, inadequate port facilities, and shipment delays pose significant hurdles for exporters.
The industry also requires specialised labour, but a deficiency in training programs is limiting efficiency. Small and medium enterprises (SMEs), which constitute a substantial portion of the industry, face challenges such as high interest rates, stringent loan conditions, and limited access to financial support.
Bida advocates for policy reforms and increased investment to foster sustainable growth and maintain competitiveness. Recommendations include developing a bonded warehouse system to lessen reliance on imported raw materials and enhancing logistics and customs processes to boost export efficiency.
