The coronavirus pandemic has adversely impacted not only the readymade garment industry of Bangladesh but also the leather sector – considered the second most promising after RMG in terms of export potential – which is dealing with severe capital crisis.
As per the Bangladesh Tanners Association (BTA), the sector has witnessed a significant drop in sale of leather and leather products, which has impeded the raw hide business and resulted in acute financial crisis.
Work orders for finished and crafted leather from South Korea, Spain, Hong Kong and Italy, which are amongst the major markets for leather products made in Bangladesh, have reportedly dropped 40 per cent.
The President of BTA Md Shaheen Ahmed maintained subsequent to low demand amongst the buyers, stock of leather have now piled up in the processing units, leaving little capital with tannery owners to purchase raw hide this year.
Considering the financial crisis the sector is undergoing, tannery owners in Bangladesh have now requested the Government to make available Taka 600 crore to deal with the situation.
The BTA President also requested the Government to waive off interest on previously availed loans by the tanners while also demanding moratorium on payments for old loans.
The President of the tannery owners body further maintained that the Government’s Taka 30,000 crore and Taka 20,000 crore stimulus packages have been of little help for those into the business of leather and leather products considering the stringent riders attached towards availing the same.
He also said that two leather goods manufacturers who borrowed Taka 5,000 crore in total, had recently went bankrupt.