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Tuesday, April 23, 2019 03:00:43 PM
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Exports decline

Leather industry faces tough times

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Kazi Zahidul Hasan  :
The billion-dollar leather industry is going through a tough time owing to intense competition with its rivals and tannery relocation.
As a result, Bangladesh has been experiencing a negative export growth in its leather and leather products since last fiscal, industry insiders said.
In the fist seven months (July- January) of the current fiscal, leather and leather products export declined by 11.71 per cent year-on-year to $626.42 million, while overseas sales of leather and leather products and leather footwear declined by 26.87 per cent during the last fiscal from a year ago, according to data from the Export Promotion Bureau (EPB).
"The industry is been experiencing a painful restructuring followed by tannery relocation and thus leaves a big impact on production. On the other hand, a fierce competition from regional rivals pushed the manufacturers exporters to tight corner badly affecting the exports," Md Shaheen Ahmed, Chairman of Bangladesh Tanners Association, told The New Nation yesterday.
He said, local leather goods exporters are facing tough competition in the global market after the Indian government announced a mega fiscal incentive for the revival of the country's leather industry.
"The leather industry could overcome the current adverse situation if the government adopts much needed policy to support the exporters so they could compete with their rivals," said Md Shaheen Ahmed.
Referring to tannery relocation from Hazaribagh to Savar Tannery Industrial Estate, Md Shaheen Ahmed said that the tanners were forced to shift their units to the industrial park without making it full operative. As a result, a good number of tanneries failed to start their production in full swing causing the fall in export.
"Exports of leather and leather goods continue to decline, as the manufacturers and exporters have been struggling with compliance issues as result of partial operation of the central effluent treatment plant (ETP) at the Savar Tannery Industrial Estate," Saiful Islam, President of the Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh told The New Nation.
He said, most tanneries have already been shifted to the estate whereas its ETP is yet to make full functioning. Tannery waste is polluting river water and environment raising concern for global buyers.  
"This has affected image of the leather industry ultimately eroding confidence of the global buyers. Lack of buyers confidence therefore put a negative impact on exports," added Saiful Islam.
Saiful Islam, however, expressed the hope to overcome the plummeting export growth of leather and leather goods provided by full functioning of CETP at the industrial estate.  "Our exports are expected to enter a positive territory very soon with renewed buyers' confidence on the back of full completion of the tannery relocation process and full operation of the CETP," he hoped.
When asked, Saiful Islam said, "The local leather industry will survive defying all odds and competitions from other regional players. It may not lag behind its competitors if the government ensures better infrastructures and improves ease of doing business."
Bangladesh earned $1.08 billion from exports of leather and leather goods in the last fiscal (2017-18) and it aimed at $1.12 billion exports form the sector in this fiscal (2018-19), according the EPB's latest data released on last week.
Leather industry earned $1.23 billion from exports in the fiscal 2016-17.

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