It’s not only apparel exports from Bangladesh that have a taken a hit, even the export of leather and leather goods from the country is going downhill lately.
Considered the most potential in terms of exports after the readymade garment industry, the export performance of the sector is a worrisome development for sure.
As per reports, leather sector exports dropped by 10 per cent in the first half of financial year 2019-20. The exports of leather and leather products fell significantly in the first 6 months (July–December) of the current financial year (FY2019–20) compared to the same period of the last fiscal year.
According to country’s Export Promotion Bureau (EPB), leather sector registered a negative growth rate of 10.61 per cent resulting in export earnings of US $ 475.83 million, which was US $ 532.3 million during the same period of the FY 2018–19 (July–December) FY.
The industry insiders, however, are not at a loss to understand the reasons why.
The yet to be fully functional tanneries that have been shifted from Hazaribagh to the Savar Tannery Complex are principally to be blamed for this export tumble, felt many in the know of things.
There are other reasons as well!
As per the Chairman of Bangladesh Tanners’ Association (BTA) Shaheen Ahamed, Bangladesh generally exports leather products to countries such as South Korea, China and the European Union, among others, which have lately started using more affordable artificial leather products leading to lesser imports from Bangladesh.
“Import duties on chemicals used for protecting raw hide have also increased, affecting the export of crust leather,” maintained Shaheen further speaking to the media while adding that at least 155 factories have been shifted to Savar, of which, 125 are running and some 30 to 40 tanneries have become fully operational but are processing crust leather only.
The lack of compliance certificate for tanneries is also a big hurdle towards increasing the export volumes it seems.
As per the President of the Leather Goods and Footwear Manufacturers’ & Exporters’ of Bangladesh (LFMEAB), Saiful Islam, the country’s leather sector was not getting the advantage of the Central Effluent Treatment Plant (CETP) and was struggling hard to achieve global standards in terms of compliance.
“For lack of proper compliance, especially in environmental issues, Bangladeshi manufacturers are not getting the certificate from the Leather Working Group (LWG), which assesses environmental compliance and performance capabilities of leather manufacturers. As a result, export earnings of the sector saw a downtrend,” Saiful observed.
He also said the leather sector was the country’s second largest export earner, employing about four lakh people directly and indirectly.
Given the current state of affairs, export of leather and leather products from Bangladesh apparently does not stand much chance of witnessing a major facelift in the immediate future, which undoubtedly is a matter of concern for the sector for sure.