Bangladesh’s leather industry is facing significant challenges, and leading figures are speaking out in hopes of finding solutions to issues stalling growth.
Chairman of the Bangladesh Finished Leather, Leather goods and Footwear Exporters’ Association, Mohiuddin Ahmed Mahin, recently held a meeting with the commerce and finance adviser to discuss the untapped potential of the sector and the urgent need for reform.
After the meeting at the finance ministry, Mahin emphasized the need to explore opportunities within the leather sector that have yet to be fully realized.
He pointed out that the country’s Savar Tannery Industrial Estate is entirely export-oriented, meaning that the leather produced there cannot be sold in the local market.
This is both a missed opportunity for domestic sales and a strain on exporters trying to remain competitive globally.
A significant hurdle for the Savar estate, Mahin noted, is the non-operational Central Effluent Treatment Plant (CETP).
The lack of a fully functional CETP means that factories must sell their leather at prices 70-80% lower than global market rates.
This is preventing the industry from achieving the necessary value addition that would increase profitability.
Mahin explained that without a working CETP, exporters are also struggling to maintain a balance between production costs and sales prices.
Despite these challenges, the adviser reportedly expressed a “positive mindset” towards resolving the issues.
MA Rashid Bhuiyan, chief adviser of the Bangladesh Finished Leather, Leather goods and Footwear Exporters’ Association, added weight to these concerns, highlighting the legacy issues tied to the relocation of the leather industry to the Savar estate.
According to Bhuiyan, the previous government forced tanneries to move to Savar, despite inadequate infrastructure. This decision, he claimed, was based on misinformation and lies from officials at the time.
“We have communicated our problems, and the adviser assured us that solutions are on the way,”
MA Rashid Bhuiyan
One of the primary concerns for the association is making the CETP fully operational.
Bhuiyan stressed that until this happens, obtaining certifications like the Leather Working Group (LWG) certificate remains out of reach.
This certification is crucial for ensuring that Bangladeshi leather products meet international environmental standards and remain competitive in the global market.
On the subject of assets still located in Hazaribagh, an area marked as a red zone due to pollution concerns, Bhuiyan mentioned that discussions are underway to potentially remove the red zone designation.
He hinted at joint venture initiatives that could pave the way for resolving these asset-related issues, allowing for greater flexibility and potential recovery of those properties.
In conclusion, Bangladesh’s leather industry, once a thriving export sector, is currently grappling with multiple challenges, from regulatory hurdles to outdated infrastructure. Leaders in the industry are hopeful that dialogue with government advisers will yield solutions, particularly with regard to the CETP at Savar. If these problems can be addressed, Bangladesh stands to regain its competitive edge in the global leather market, offering both economic growth and environmental improvements.
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