[🇧🇩] Footwear, Rubber and leather Industry in Bangladesh

[Saif]

Compliance issues get in way of fully tapping leather export potential: Labour secretary

Bangladesh has yet to fully harness the potential of its leather goods exports mainly because of compliance issues, Labour and Employment Secretary AHM Shafiquzzaman has said. Leather can be a good item that can help reduce the country’s high dependency on one item—readymade garment, w

thefinancialexpress.com.bd

Compliance issues get in way of fully tapping leather export potential: Labour secretary
FE ONLINE REPORT
Published :
Sep 26, 2024 20:29
Updated :
Sep 26, 2024 21:42
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Bangladesh has yet to fully harness the potential of its leather goods exports mainly because of compliance issues, Labour and Employment Secretary AHM Shafiquzzaman has said.

Leather can be a good item that can help reduce the country’s high dependency on one item—readymade garment, which contributes more than 82 per cent of Bangladesh’s total export earnings, he said, adding that value addition to leather goods is 97 per cent while most of the raw materials used in garment-producing are imported, including cotton.

The secretary hoped that a checklist would help address compliance issues in line with buyer requirements.

The programme was organised by ‘Good Working Conditions in Tanneries (GOTAIN)’ project of German-based Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).

During the workshop, it was revealed that most of the leather product exporters in Bangladesh have failed to obtain Leather Working Group (LWG) certification, an internationally recognised standard, due to the industry's inability to meet environmental and social compliance requirements.

As a result, many of Bangladesh's factories are unable to directly export leather products to markets like the European Union and America, which industry leaders believe is contributing to the decline in export earnings.

Although there was initial optimism that relocating tanneries from Hazaribagh to Savar, would improve conditions, industry leaders noted that the situation has not improved. The Central Effluent Treatment Plant (CETP) is still not fully operational, and leather waste continues to pollute local rivers, posing environmental risks.

Matiur Rahaman joint inspector general at Department of Inspection for Factories and Establishments (DIFE) and project director of GOTAN and Alina Moser advisor GOTAN, GIZ Bangladesh made two separate presentations on checklist and status quo of the developments of the tannery sector in Bangladesh respectively.

DIFE Inspector General Abdur Rahim Khan, Additional Inspector General Arif Ahmed Khan, and head of GOTAN project Md Firoz Alam, among others, spoke at the programme.​

 

[Saif]

Leather sector leaders seek CETP problem fixing forthwith

Leather-sector leaders Sunday urged the government to make the central effluent-treatment plant (CETP) functional to facilitate their business that holds huge export potential. Leaders of Bangladesh Finished Leather, Leathergoods and Footwear Exporters' Association (BFLLFEA) made the request at a

thefinancialexpress.com.bd

Leather sector leaders seek CETP problem fixing forthwith
Adviser assures steps for the industry
Published :
Oct 07, 2024 08:53
Updated :
Oct 07, 2024 08:53

Leather-sector leaders Sunday urged the government to make the central effluent-treatment plant (CETP) functional to facilitate their business that holds huge export potential.

Leaders of Bangladesh Finished Leather, Leathergoods and Footwear Exporters' Association (BFLLFEA) made the request at a meeting with finance adviser of the interim government Dr Salehuddin Ahmed at his secretariat office in the capital.

"Our demand is fix CETP. We are suffering because of government inaction," BFLLFEA adviser M A Rashid Bhuiyan told newsmen after the meeting.

He said during the shifting the tannery business from Hazaribag to Savar, the industrialists were told that all infrastructures were ready. "But it was an utter lie."

He said in the meeting with the finance adviser they elaborately explained the problems facing the factory owners in Savar Tannery Industrial Estate.

The adviser assured them of resolving the problems, Mr Bhuiyan said.

Association chairman Mohiuddin Ahmed Mahin said factories in Savar tannery estate are 100-percent export-oriented.

The government gave them licence for exporting, but due to incomplete CETP, the factory owners are forced to sell goods in China at lower prices than the international-market rates.

The finance adviser told newsmen that he heard the problems of the factory owners and will take necessary actions to resolve them.

"The leather sector has a great opportunity in the export diversification. But they have many problems," he said, adding that resolving their problems will also help fisheries and livestock secretors.

Former BFLLFEA chairman Syed Nasim Manzur attended the meeting, among others.​

 

[Saif]

CETP saga of Savar leather estate

It is quite intriguing that discussion is still on how to make the central effluent-treatment plant (CETP) at Savar tannery industrial estate functional after so many years. There is no point discussing how after much tug-and-pull between a previous government and tanners, the leather sector finall

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CETP saga of Savar leather estate
Syed Mansur Hashim
Published :
Oct 08, 2024 21:40
Updated :
Oct 08, 2024 21:40

It is quite intriguing that discussion is still on how to make the central effluent-treatment plant (CETP) at Savar tannery industrial estate functional after so many years. There is no point discussing how after much tug-and-pull between a previous government and tanners, the leather sector finally moved from Hazaribagh area to the Savar leather estate in 2018. The CETP issue was never resolved and the export-oriented leather industry continued to suffer because it could not meet requirements demanded by importers. Many of the larger tannery companies had gone ahead and installed their own effluent-treatment-plants (ETPs), but for the majority of leather factories that was never an option.

Today, there is a new government in power. The interim government appears to be serious about making changes at policy level on issues like climate and adoption of environmentally-friendly processes. Hence, it is understandable that leaders of the Bangladesh Finished Leather, Leathergoods and Footwear Exporters' Association (BFLLFEA) has approached the finance advisor for measures to fix the CETP. This is understandable because the CETP issue has been festering for years on end under the previous governments. While all other infrastructure has been made ready, the CETP problem remains. But why? The factories located at the Savar tannery industrial estate are 100 per cent export-oriented.

The finance adviser has given assurance that CETP-related problems will be solved soon. Precisely how long "soon" is, of course, matters. As pointed out by BFLLFEA, the absence of a functioning CETP means that factories are forced to sell goods to China at much lower prices than the international market rates. But the government should understand something. It is more imperative than ever to try and diversify the export basket. Being dependent on just one industry, i.e. readymade apparels, exposes the country to undue external pressure, business or otherwise. Again, export diversification must happen to increase foreign exchange earnings, something that is in dire need today.

It is good that there is talk of forming a sub-committee that will look into solving the industry's problems expeditiously. As stated before, a non-operational CETP translates into Bangladeshi tannery companies selling their products at significantly lower rates in the global market and that is not helping either the industry or export earnings. A CETP would also allow for industry to move in to value-added product category, which would increase earnings manifold.

There has till now been a tug of war between past policymakers and industry on the question of cost of setting up a workable CETP. It could be argued that since the existence of CETP is mandatory to make dangerous effluents safe before discharge, it is the industry's responsibility to set it up. Many of tannery companies have set up individual ETPs to take advantage of the obvious export opportunities, but they are a very few in number. Most of the tanneries are small in size with limited financial capacity, which brought forth the question of a CETP in the first place.

If cost sharing becomes inevitable, then the government should go ahead and set it up on its own. At the same time, tannery companies may pay a certain percentage of the cost depending entirely on their export earnings. Since without a CETP, the leather industry as a whole, can never reach its full potential, the ministry concerned needs to come to a decision fast. Enough time has been wasted on the issue and it can only be hoped that the seemingly never-ending saga of a non-functional CETP can come to an end within an acceptable timeframe.​

 

[Saif]

Realising leather industry's potential

The allegation made by the entrepreneurs of the leather sector is serious. Contrary to the claim successive ministers of the past Awami League government put forward about readiness of the Savar Industrial Estate for relocation of tanneries from Hazaribagh, they complain that they were duped by lie

thefinancialexpress.com.bd

Realising leather industry's potential
Published :
Oct 09, 2024 22:03
Updated :
Oct 09, 2024 22:03
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The allegation made by the entrepreneurs of the leather sector is serious. Contrary to the claim successive ministers of the past Awami League government put forward about readiness of the Savar Industrial Estate for relocation of tanneries from Hazaribagh, they complain that they were duped by lies. There was mismanagement galore so far as the infrastructure development at the estate was concerned when they moved to the leather estate in 2018. Some of the infrastructural paucity they could manage on their own but the one outstanding concerned ---and it still does---the Central Effluent Treatment Plant (CETP). From day one, the CETP was far from operating at its full capacity. Strangely, it was still under construction when leather and leather goods manufacturers moved to the industrial estate. Then it started malfunctioning and the Chinese company responsible for its construction reportedly abandoned it without completing it.

The much hyped leather industrial estate thus proved to be a lame duck and the result was catastrophic. Massive environmental pollution from leather plants caused by dumping of solid waste and release of effluent from the leather factories was now shifted from Hazaribagh to Hemayetpur of Savar and from the Buriganga to the Dhaleswari respectively. Although the manufacturers and businesspersons of leather sector did not raise the issue of massive environmental pollution during a meeting with the finance and commerce adviser, they drew his attention to the commercial crises they have been facing since their relocation to the leather estate yet to be complete. Because of this open release of industrial waste and effluent, they are compelled to export leather at prices 70-80 per cent less than the international rate, they complain. They are paying the price for the then government's rash decision to make them move to the processing and manufacturing hub of leather and leather goods before it was equipped with the required facilities.

What, however, the manufacturers and traders of the sector did not mention is the difficulty created for obtaining Leather Working Group (LWG) certification on account of this environmental lacking. Only the LWG-certified leather factories can export shoes and leather products to international market. Reportedly, seven factories in the country have so far obtained LWG certification but only three of them produce finished leather goods. If the commercial constraints the majority of tanneries face could be overcome, the leather industry could live up to its billing of becoming the second highest foreign exchange earner.

Now that the problem is clearly identified and the entrepreneurs of the sector have brought the CETP issue to the finance and commerce adviser's notice and the latter has assured them of helping solve the problem, there are reasons to be optimistic about the industry's flourishment. If an efficient CETP can be set up at the leather estate, there will be a radical change in the environment there. But more needs to be done mainly on the part of the factories as well. They have to introduce advanced technology, particularly gears that ensure the safety of workers handling raw hides for processing. Their exposure to toxic chemicals must be limited to the minimum in order to keep them safe from the diseases caused from physical contact with those substances. The leather estate must be modern in the true sense of the term.​

 

[Saif]

Non-leather footwear on course to half-billion export club

Bangladesh’s synthetic and athletic footwear exports have been growing rapidly, emerging as a bright spot in the country’s export basket, which is heavily dominated by readymade garments.

www.thedailystar.net

Non-leather footwear on course to half-billion export club

Bangladesh's synthetic and athletic footwear exports have been growing rapidly, emerging as a bright spot in the country's export basket, which is heavily dominated by readymade garments.

In the decade preceding the end of fiscal year 2023-24, non-leather footwear exports ballooned 120 percent, jumping from $189 million to $416 million.

Such robust growth has continued into the current fiscal year, according to the Export Promotion Bureau (EPB).

In the first five months of FY25, non-leather footwear exports grew 41 percent year-on-year to $217.81 million, EPB data shows.

Exporters anticipate that the sector is poised to enter the half-billion-dollar club by the end of this fiscal year, joining leather footwear, jute and jute goods, home textiles and agricultural products.

"Western buyers are turning away from global footwear giant China to diversify their sourcing basket and avert looming large tariffs on Beijing from the White House," Riad Mahmud, managing director of Shoeniverse Footwear, said as he outlined reasons for the segment's growth.

Mahmud's footwear factory in Mymensingh, which employs around 1,700 people, supplies products to global brands such as Inditex, Aldi, Matalan and RedTape.

Although Bangladesh has long been trying to diversify its export basket, readymade garments still account for over 80 percent of total exports.

Mahmud said global brands are well aware of Bangladesh's advantages, such as competitive labour pricing, and its strong track record in apparel products, which encourages them to place footwear orders.

"Bangladeshi manufacturers can offer competitive prices for synthetic shoes compared to Vietnam due to lower labour costs. This has attracted globally renowned brands and new buyers," he added.

He said big brands had booked Shoeniverse's factory until March next year and buyers are now approaching him for future slots due to the possibility of the US imposing higher tariffs on Chinese products.

According to a market assessment by the Bangladesh Investment Development Authority (Bida), the rise in non-leather shipments is a result of increased work orders from well-known global brands like H&M, Puma, Decathlon, FILA and Kappa.

The main export destinations for these products are Spain, France, the Netherlands, South Korea, India, Italy and Germany.

BETTER THAN LEATHER

EPB data shows that Bangladesh's non-leather footwear exports have grown at an average annual rate of 23 percent in the past 10 years while the leather footwear industry has seen average growth of only 6 percent.

Leather footwear exports grew to just over $544 million in FY24 from $483.81 million in FY15.

However, despite the segment's enormous potential, synthetic shoe exporters receive a cash incentive of only 4 percent, Mahmud said, adding that the leather footwear sector was afforded 15 percent.

Though dominated by small-scale factories, the synthetic footwear segment is rapidly growing due to the relatively low investment required to set up an export-oriented production unit.

"It doesn't matter who enters the Oval Office after Trump since Bangladeshi manufacturers of synthetic footwear are well-positioned to capitalise on any tariffs on China in the meanwhile," Mahmud said.

SYNTHETIC FOOTWEAR THE FUTURE OF EXPORT

Jakaria Shahid, managing director of Edison Footwear Limited, believes the synthetic footwear industry will hold the key to export diversification in the future due to its rapid growth.

However, he added that top global brands like Nike and Adidas have not ventured into Bangladesh because manufacturers fail to maintain lead times.

Mohammad Shahadat Ullah, executive director of Maf Shoes, which exports to France and Germany, said, "Our exports have increased compared to last year as buyers are placing more orders."

Maf Shoes, a sister concern of TK Group, has a daily production capacity of over 50,000 pairs of shoes.

Kamruzzaman Kamal, marketing director of industrial conglomerate PRAN-RFL Group, said RFL began exporting non-leather footwear products in 2021. Currently, RFL footwear products are shipped to 37 countries.

"Given the huge global demand and potential for rapid growth, this sector can quickly emerge as a major export earner," he added.

BOTTLENECKS NEED TO BE REMOVED

Nasir Khan, chairman and managing director of Jennys Shoes, said Chinese companies are now lining up to invest in Bangladesh to avoid high tariffs in the US market.

"However, we are confused about our ability to seize this business opportunity due to the non-cooperation of customs officials," Khan alleged.

He said local manufacturers must now spend at least three and a half months to negotiate and secure an export order.

Khan claimed that despite the bright future of both leather and non-leather footwear, exports have been limited to $1 billion over the past two decades due to the non-cooperation of customs officials.

"The customs authorities receive, at best, Tk 50 crore in import duty from leather product manufacturers annually. Manufacturers must bring raw materials into bonded warehouses," he said.

But, if the National Board of Revenue (NBR) reduces the duty to a minimum and allows the import of raw materials without the bonded warehouse condition, government revenue could increase manifold, he added.

MA Razzaque, chairman of Research and Policy Integration for Development (RAPID), said local leather footwear exports are struggling to grow due to the non-compliance of the tannery estate in Savar.

In contrast, he said, the synthetic footwear industry does not have such compliance requirements, leading to increased exports.

According to Maximize Market Research, a global market research and consultancy firm, the global athletic footwear market was valued at $68.26 billion in 2023.

The market is projected to grow at a compound annual growth rate of 7.11 percent from 2024 to 2030.​

 

[Saif]

Bangladesh to join 19th Cairo Int’l Leather and Shoes Fair starting Thursday

The three-day 19th Cairo Int’l Leather and Shoes Fair 2025 will begin in Cairo, Egypt on Thursday. The event will take place from January 23-25, 2025 at Cairo International Convention Center, Egypt where Bangladesh will be represented at Pavilion A52, said a press release issued on Wednesday

thefinancialexpress.com.bd

Bangladesh to join 19th Cairo Int’l Leather and Shoes Fair starting Thursday
UNB
Published :
Jan 23, 2025 01:00
Updated :
Jan 23, 2025 01:00

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The three-day 19th Cairo Int’l Leather and Shoes Fair 2025 will begin in Cairo, Egypt on Thursday.

The event will take place from January 23-25, 2025 at Cairo International Convention Center, Egypt where Bangladesh will be represented at Pavilion A52, said a press release issued on Wednesday.

Leading Bangladeshi leather, footwear and leather goods companies such A.S Leather, Loretta Leather, Al Madina, Gardenia Footwear and Nobabee Footware will be participating in the premier international leather and accessories exhibition.

This Meet Bangladesh Sourcing Show (MBS) is introduced by Export Competitiveness for Jobs (EC4J) Project under the ministry of commerce to showcase the eminent leather, footwear (leather and non-leather) and leather goods sector of Bangladesh.

The primary objective of the EC4J project is to strengthen export market linkages for potential leather and footwear sectors by showcasing Bangladesh as a credible sourcing destination.

Bangladesh is a lucrative destination for the global buyer community having competitive workforce boosting exports, having duty-free market access to developed countries, being an established sourcing destination and by having availability of linkage industries.​

 

[Bilal9]

Do you research anything before passing wild comments? Stunting is higher in India compared to Bangladesh (especially high in Northern India BIMARU states (UP, Bihar, MP, Haryana etc.).

https://www.researchgate.net/publication/317578939_Role_of_Women's_Empowerment_in_Determining_Child_Stunting_in_Eastern_India_and_Bangladesh

India atop the world in number of stunted children, child workers: Study

India now has the highest number of children stunted due to malnutrition 48.2 million, equivalent to the population of Colombia, as per the latest global report on childhood. Also, 31 million of its...

www.thehansindia.com

 

[Sharma Ji]

Do you research anything before passing wild comments? Stunting is higher in India compared to Bangladesh (especially high in Northern India BIMARU states (UP, Bihar, MP, Haryana etc.).

View attachment 13590

View attachment 13591

chadd, yaar

troll kar raada

leave its of the behind

 

[Sharma Ji]

but @Bilal9 .. your Saif guy is a total cvnt

 

[Bilal9]

but @Bilal9 .. your Saif guy is a total cvnt

You guys both fly off the handle too much. I deleted both of your comments with foul language.

There is no difference in genetics. All differences are "manufactured" by people who want to rule you.

Hindu Muslim, isn't written on your collective foreheads. Brothers from another mother.

Same type of desis, same mentality. Now - can we all be nice and argue with respect?

 

[Saif]

Leather goods makers urge govt to clear unpaid cash incentives

Leather goods and footwear manufacturers and exporters have requested the government to clear the outstanding cash incentives. Leather goods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB) President Syed Nasim Manzur recently wrote to the Finance Division to take st

thefinancialexpress.com.bd

Leather goods makers urge govt to clear unpaid cash incentives
FE REPORT
Published :
Jan 30, 2025 00:39
Updated :
Jan 30, 2025 00:39

Leather goods and footwear manufacturers and exporters have requested the government to clear the outstanding cash incentives.

Leather goods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB) President Syed Nasim Manzur recently wrote to the Finance Division to take steps in this connection.

A Finance Division official told The Financial Express, "We have received the letter and are working on it."

The government currently owes the association's member factories more than Tk 3.0 billion as cash incentives, which has not been cleared due to a lack of funds, according to Manzur's letter.

He said the member factories are facing an emergency as there is a recession in the export markets, while buyers have stopped placing new orders due to Bangladesh's present law and order situation as well as image.

Besides, the production costs of various leather items have increased due to the high-priced raw materials, higher dollar prices, and fuel and transportation costs, Manzur noted.

On the other hand, the association members have to pay over Tk 2.22 billion as wages and bonuses to their workers before the upcoming Eid-ul-Azha holiday, he said.

To help the factory owners weather the storm, he requested the Finance Division to take prompt action and provide liquidity support.

Otherwise, the factory owners will fail to pay salaries and bonuses to their workers, which may trigger labour unrest, causing the country's law and order situation to deteriorate, read the letter.​

 

[Saif]

Built by expat brothers, rural factories send shoes abroad

In search of a better future, Md Selim and Hasanuzzaman Hassan migrated to the US roughly over three decades ago. The brothers eventually found success in construction business there but could not ignore the urge for contributing to their homeland.

www.thedailystar.net

Built by expat brothers, rural factories send shoes abroad

The non-leather shoes made in the factories of rural Rangpur are currently being exported to European and Indian markets. Photo: collected

In search of a better future, Md Selim and Hasanuzzaman Hassan migrated to the US roughly over three decades ago. The brothers eventually found success in construction business there but could not ignore the urge for contributing to their homeland.

Driven by a desire to make a difference in their country, they returned home, leaving behind a secure and comfortable life. Subsequently, they built cold storage facilities and footwear factories in northern Bangladesh.

The non-leather shoes made in these factories in rural Rangpur, around 300 kilometre northwest of capital Dhaka, are currently being exported to European and Indian markets. The export destinations include Poland, Turkey, the United Arab Emirates, Germany and Canada. The shoemaker also is now in process to send products to the United States.

Besides, the factories now employ nearly 3,000 workers, mostly women who were previously unable to contribute financially to their struggling families.

The brothers' journey of change began in 2007 when they returned to Bangladesh with Tk 3.5 crore for a potential investment. Although there were political and economic uncertainties at the time, they had a clear focus: to contribute to their home community meaningfully.

In 2009, they built a cold storage in Nilphamari for agri items like seeds and potatoes. In 2012, the brothers established their second facility at Mithapukur of Rangpur.

They soon turned to the footwear industry, a decision that would transform the local employment landscape for women.

In 2017, they built a shoe factory, BLING Leather Products Ltd, on 9.5 acres of land at Ghonirampur area of Taraganj.

Hassan said there were a lack of raw materials and a skilled workforce at the time, but their dream was to create employment in the locality and set an example as expatriates.

The second unit of the shoe-maker has been inaugurated recently.

But the beginning of their journey was far from easy. According to Hassan, they faced difficulties in management and technology, partly because their factory was far from the capital Dhaka.

Besides, the lack of shoe-making and exporting experience was another challenge.

By 2020, the brothers managed to start shoe production, primarily churning out 300 pairs per day. In 2021, the firm entered the global market.

Hassan said they earned Tk 320 crore from the shipment of synthetic shoes to Europe and India in last fiscal year 2023-24.

Meanwhile, in 2023, Selim passed away after suffering from age-related complications for years.

"Managing the business in such challenging times was difficult," said his younger brother Hassan.

Last Friday, Managing Director and CEO of Rupali Bank Kazi Md Wahidul Islam inaugurated the second unit of BLING Leather. To ensure international standards, the company has sourced machinery from Taiwan and Italy.

Rupali Bank is financing Tk 90 crore to expand the firm's production capacity.

In terms of local employment, the new unit marks another milestone. Currently, the two factories employ around 2,900 workers.

Hassan said the production lines have helped reduce unemployment in the area, providing stable incomes for families that once struggled to make ends meet.

"Just five or six years ago, men in the area had to leave in search of work while women remained unemployed. Today, the scenario has changed dramatically," he recalled.

With the second unit now operational, some 15,000 pairs of shoes are being produced daily. By 2026, Hassan said they aim to increase production to 50,000 pairs per day.

Hamida Khatun, a worker at BLING Leather Products Ltd, said she started working at the factory more than a year ago.

"Before this job, my family depended solely on the income of my husband, who is a rickshaw-van puller. Now, I earn Tk 10,000 per month, and our financial condition has improved," said Khatun.

"I feel empowered knowing that I contribute to my family's well-being," she added.

After four years of international market entry and latest expansion, BLING Leather now aims to accomplish an export target of Tk 700 crore by the end of 2028.

But for Hassan, life is not just about gains. "Rather, it's about contributing to the nation meaningfully," he said.​

 

[Saif]

https://www.thedailystar.net/business/news/footwear-sector-offers-lucrative-investment-opportunities-bida-3826941

Footwear sector offers lucrative investment opportunities: Bida
Sustaining growth and enhancing competitiveness are key challenges

Bangladesh's footwear sector is at a turning point, offering lucrative investment opportunities in both the leather and non-leather segments. However, challenges in sustaining growth and enhancing competitiveness remain, the Bangladesh Investment Development Authority (Bida) highlighted in a newsletter released yesterday.

"We see huge potential in this sector. If sufficient facilities are provided, the industry will take off and become a major export earner," said Shah Mohammad Mahboob, an executive member of Bida.

He added that they were working to negotiate with the National Board of Revenue to provide the necessary facilities to attract investment in this sector.

According to Bida, the rise of non-leather footwear—driven by changing consumer preferences and environmental concerns—is opening new investment opportunities, even outpacing the leather footwear sector in terms of growth over the past decade.

"We see huge potential in this sector. If sufficient facilities are provided, the industry will take off and become a major export earner," said Shah Mohammad Mahboob, an executive member of Bida

Referring to data from the Export Promotion Bureau (EPB), Bida said non-leather footwear exports grew by 120 percent over the last decade, far exceeding the 6 percent growth rate of leather footwear during the same period.

In the first seven months of FY25, non-leather footwear exports rose by 40.11 percent year-on-year to $318.09 million and are expected to exceed half a billion dollars by the end of the fiscal year.

However, while Bangladesh is the eighth-largest footwear producer in the world, leather goods and footwear remain the dominant force, generating $1.6 billion in exports last fiscal year.

Riad Mahmud, managing director of Shoeniverse Footwear Ltd., a concern of the National Polymer Group, said this offers great potential.

"If any corporate entity makes a major investment in the non-leather footwear sector, it will be a profitable venture," he said.

According to him, Bangladesh has only 15 compliant non-leather shoe factories, which require a capital investment of around Tk 35 crore to set up—posing a barrier to market entry.

Bida also pointed out that many tanneries and footwear factories struggle to meet global environmental and labour standards.

Mahmud further highlighted a shortage of skilled workers and complexities in customs procedures during the import of raw materials and shipment of products.

Hasanuzzaman Hassan, chairman of BLING Leather Products Ltd., a non-leather shoe factory based in rural Rangpur, said he now exports to Poland, Turkey, the United Arab Emirates, Germany, India, and Canada.

His company started shoe production in 2020, initially producing 300 pairs per day. In 2021, the firm entered the global market.

He envisions a promising future for synthetic footwear, stating that his company earned Tk 320 crore from synthetic shoe exports last fiscal year.

However, despite its strong performance, Bangladesh's footwear industry faces several challenges that must be addressed, Bida highlighted.

The lack of a domestic supply chain for synthetic materials increases production costs and lead times, affecting global competitiveness. Meanwhile, inefficiencies in customs clearance, inadequate port facilities, and shipment delays create difficulties for exporters.

The industry also requires specialised labour, but a lack of training programmes is hampering efficiency.

Furthermore, small and medium enterprises (SMEs), which make up a large portion of the industry, struggle with high interest rates, strict loan conditions, and limited access to financial support—posing major challenges to the growth of small-scale factories.

To sustain growth and remain competitive, the focus must be on policy reforms and investment, Bida recommended.

It suggested developing a bonded warehouse system to reduce dependence on imported raw materials and improving logistics and customs processes to enhance export efficiency.​

 

[Saif]

Allow 'free of cost' raw material imports

The Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB) on Tuesday urged the government to allow 'free of cost' import of raw materials, similar to the facility provided to the textile sector. Under the ready-made garment industry, factories are provided

thefinancialexpress.com.bd

Allow 'free of cost' raw material imports
Leather goods, footwear manufacturers urge govt
FE REPORT
Published :
Mar 12, 2025 00:59
Updated :
Mar 12, 2025 00:59

The Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB) on Tuesday urged the government to allow 'free of cost' import of raw materials, similar to the facility provided to the textile sector.

Under the ready-made garment industry, factories are provided with the facility to import raw materials sent by buyers 'free of cost' for the execution of export orders. However, the factories under LFMEAB are deprived of this benefit.

The association also demanded the reinstatement of the 12 per cent cash incentive for exports, following a decline in shipments in recent years.

The demands were placed at the 'Pre-Budget Consultation to Prepare for the National Budget for the Fiscal Year 2025-2026 with a Focus on Tax Reforms, Customs Duties, and Value-Added Tax (VAT),' organised by the National Board of Revenue (NBR) at its Agargaon office in the city.

NBR Chairman Md Abdur Rahman Khan presided over the session, where representatives from the Bangladesh Tanners Association, Bangladesh Freight Forwarders Association, Bangladesh Ceramics Manufacturers and Exporters Association, the Federation of Bangladesh Custom Clearing and Forwarding Agents Association, the Intending Association of Bangladesh, the Shipping Agents Association of Bangladesh, and other trade bodies presented their proposals.

LFMEAB President Mohammed Nazmul Hassan placed their demands, which included a rebate on source tax applied to the export cash subsidy, currently set at 10 per cent.

The association also called for tax rebate on import of spare parts and essential machinery, similar to the facilities available to the textile sector, to boost exports and reduce business costs.

Meanwhile, the Bangladesh Tanners Association urged the government to reinstate its 10 per cent cash subsidy.

The association's secretary, Mizanur Rahman, also requested a reduction in tax deduction at source (TDS), currently at 3.0 per cent, by classifying the leather sector as part of the agricultural industry.

The association argued that such incentives could help increase raw leather prices during the Eid-ul-Azha.

Besides, ceramics manufacturers demanded removal of the 15 per cent supplementary duty at the production stage.

They also called for elimination of the 10 per cent supplementary duty on sanitary products.

Moynul Islam, president of the Association, proposed that taxes on imported raw materials such as China Clay and Block Clay be imposed based on the actual usable quantity, considering that 35-40 per cent of these materials are lost due to moisture and waste. Bangladesh Freight Forwarders Association President Kabir Ahmed claimed that licensing of new freight forwarding companies has almost come to a halt.

He also emphasised that foreign companies engaging in joint ventures with local firms should be required to collaborate with Bangladeshi freight forwarders instead of choosing partners at their discretion, to strengthen local trade.​

 

[Bilal9]

The govt. first of all has to decide whether it actually wants a robust shoe mfg. sector which is seen in India, Indonesia and Vietnam nowadays. After garments this was going to be the next big thing in Bangladesh - but for idiot bureaucrats and bankers who were clueless and always wanted to throw their collective weights around with red tape, we have now suffered for twenty years. The time for the govt. is to move now.

The lack of a domestic supply chain for synthetic materials

This is policy driven, specifically import tariffs. I don't know what these Govt. amla idiots think, but there is no raw material import duty for show mfg. components in Vietnam.

The industry also requires specialised labour, but a lack of training programmes

We need to go to Taiwan and Korea (maybe China as well) and hire their shoe factory supervisors, retired ones are OK too. Some transfer of expertise will be needed to get to world-class standard for shoe exports, these Chinese, Koreans and Taiwanese experts must be paid handsomely and their incomes should be repatriable without any sort of income tax as a special benefit to grow this sector.

SMEs), which make up a large portion of the industry, struggle with high interest rates, strict loan conditions, and limited access to financial support

There should be minimal barrier to getting low-interest, easy-term loans for setting up export-based shoe factories. Maybe the Grameen peer-trust loan philosophy can be applied.

It suggested developing a bonded warehouse system

Absolutely, just like in the garments sector. Nothing wrong with it.

The Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB) on Tuesday urged the government to allow 'free of cost' import of raw materials,

That is a "stitching-cost basis" contract. The other one, which is a back-to-back L/C is equally valid. But there should be local warehouses to minimize time spent in importing raw materials which is a 30 day latency. Maybe raw materials can be air freighted from China under special low-cost freight arrangements.

 

[Bilal9]

Non-leather footwear on course to half-billion export club​

Bangladesh's synthetic and athletic footwear exports have been growing rapidly, emerging as a bright spot in the country's export basket, which is heavily dominated by readymade garments.

In the decade preceding the end of fiscal year 2023-24, non-leather footwear exports ballooned 120 percent, jumping from $189 million to $416 million.

Such robust growth has continued into the current fiscal year, according to the Export Promotion Bureau (EPB).

In the first five months of FY25, non-leather footwear exports grew 41 percent year-on-year to $217.81 million, EPB data shows.

Exporters anticipate that the sector is poised to enter the half-billion-dollar club by the end of this fiscal year, joining leather footwear, jute and jute goods, home textiles and agricultural products.

"Western buyers are turning away from global footwear giant China to diversify their sourcing basket and avert looming large tariffs on Beijing from the White House," Riad Mahmud, managing director of Shoeniverse Footwear, said as he outlined reasons for the segment's growth.

Mahmud's footwear factory in Mymensingh, which employs around 4,700 people, supplies products to global brands such as Inditex, Aldi, Matalan and RedTape.

Although Bangladesh has long been trying to diversify its export basket, readymade garments still account for over 80 percent of total exports.

Mahmud said global brands are well aware of Bangladesh's advantages, such as competitive labour pricing, and its strong track record in apparel products, which encourages them to place footwear orders.

"Bangladeshi manufacturers can offer competitive prices for synthetic shoes compared to Vietnam due to lower labour costs. This has attracted globally renowned brands and new buyers," he added.

He said big brands had booked Shoeniverse's factory until March next year and buyers are now approaching him for future slots due to the possibility of the US imposing higher tariffs on Chinese products.

According to a market assessment by the Bangladesh Investment Development Authority (Bida), the rise in non-leather shipments is a result of increased work orders from well-known global brands like H&M, Puma, Decathlon, FILA and Kappa.

The main export destinations for these products are Spain, France, the Netherlands, South Korea, India, Italy and Germany.

BETTER THAN LEATHER

EPB data shows that Bangladesh's non-leather footwear exports have grown at an average annual rate of 23 percent in the past 10 years while the leather footwear industry has seen average growth of only 6 percent.

Leather footwear exports grew to just over $544 million in FY24 from $483.81 million in FY15.

However, despite the segment's enormous potential, synthetic shoe exporters receive a cash incentive of only 4 percent, Mahmud said, adding that the leather footwear sector was afforded 15 percent.

Though dominated by small-scale factories, the synthetic footwear segment is rapidly growing due to the relatively low investment required to set up an export-oriented production unit.

"It doesn't matter who enters the Oval Office after Trump since Bangladeshi manufacturers of synthetic footwear are well-positioned to capitalise on any tariffs on China in the meanwhile," Mahmud said.

SYNTHETIC FOOTWEAR THE FUTURE OF EXPORT

Jakaria Shahid, managing director of Edison Footwear Limited, believes the synthetic footwear industry will hold the key to export diversification in the future due to its rapid growth.

However, he added that top global brands like Nike and Adidas have not ventured into Bangladesh because manufacturers fail to maintain lead times.

Mohammad Shahadat Ullah, executive director of Maf Shoes, which exports to France and Germany, said, "Our exports have increased compared to last year as buyers are placing more orders."

Maf Shoes, a sister concern of TK Group, has a daily production capacity of over 50,000 pairs of shoes.

Kamruzzaman Kamal, marketing director of industrial conglomerate PRAN-RFL Group, said RFL began exporting non-leather footwear products in 2021. Currently, RFL footwear products are shipped to 37 countries.

"Given the huge global demand and potential for rapid growth, this sector can quickly emerge as a major export earner," he added.

BOTTLENECKS NEED TO BE REMOVED

Nasir Khan, chairman and managing director of Jennys Shoes, said Chinese companies are now lining up to invest in Bangladesh to avoid high tariffs in the US market.

"However, we are confused about our ability to seize this business opportunity due to the non-cooperation of customs officials," Khan alleged.

He said local manufacturers must now spend at least three and a half months to negotiate and secure an export order.

Khan claimed that despite the bright future of both leather and non-leather footwear, exports have been limited to $1 billion over the past two decades due to the non-cooperation of customs officials.

"The customs authorities receive, at best, Tk 50 crore in import duty from leather product manufacturers annually. Manufacturers must bring raw materials into bonded warehouses," he said.

But, if the National Board of Revenue (NBR) reduces the duty to a minimum and allows the import of raw materials without the bonded warehouse condition, government revenue could increase manifold, he added.

MA Razzaque, chairman of Research and Policy Integration for Development (RAPID), said local leather footwear exports are struggling to grow due to the non-compliance of the tannery estate in Savar.

In contrast, he said, the synthetic footwear industry does not have such compliance requirements, leading to increased exports.

According to Maximize Market Research, a global market research and consultancy firm, the global athletic footwear market was valued at $68.26 billion in 2023.

The market is projected to grow at a compound annual growth rate of 7.11 percent from 2024 to 2030.

 

[Saif]

Leather sector lagging 30yrs behind: experts

Speakers at a discussion meeting on Sunday said that the Bangladesh leather industry has been going through a tough situation over the past 10 years...

www.newagebd.net

Leather sector lagging 30yrs behind: experts
United News of Bangladesh . Dhaka 27 April, 2025, 22:49

New Age file photo

Speakers at a discussion meeting on Sunday said that the Bangladesh leather industry has been going through a tough situation over the past 10 years.

The types of leather that were produced in Bangladesh 20 to 30 years ago are still being produced without any change. There is no development in this regard. So the leather sector is lagging behind, they said.

‘In 2012, the revenue from the leather sector was US $1.13 billion. In 2024, it decreased to $970 million,’ the discussion was told on the occasion of ‘World Leather Day 2025’ at the Leather Industry City in Harindhara, Savar, on Sunday.

Despite having potential and enough sources of rawhide in the country, other industries are developing, but the picture is the opposite in the leather Industries, they said.

The meeting was organised by Footwear Exchange at the seminar hall of Dhaka Tannery Industrial Estate Waste Treatment Plant Company Limited in Shilpanagar with the theme ‘Beyond the Surface: It’s Our Time to Be Visible, Vocal and Responsible’.

The meeting was moderated by Golam Shahnewaz, managing director of DTIEWTPCL, and the chief guest was Bangladesh Tanners Association (BTA) Chairman Shaheen Ahmed. Apex Tannery Chief Production Officer Salauddin Mahmud Khan, Managing Director of Marson Tannery Tariqul Islam Khan were the special guests.

Leather Engineers and Technologists Society of Bangladesh President Mohammad Ali, Leather Products and Footwear Manufacturers and Exporters Association (LFMEAB) Director Mushfiqur Rahman and others were present at the event.

BTA Chairman Shaheen Ahmed said that coordination between various industry-related associations is essential to overcome the crisis in the leather industry.

‘The institutions are not fully independent. The way BSCIC officials are running the industries ministry, it is being run the same way. In Kolkata, the owners of the leather industry institutions are the main stakeholders and shareholders. But in Bangladesh, it is completely the opposite,’ he said.

‘This needs to be fixed, the power of the association needs to be increased. The shares of tannery owners need to be increased,’ he added.

Speaking at the event, Mohammad Ali said that leather engineers have a big role in the development of the leather sector in Bangladesh. That role is not being played properly.

LFMEAB Director Mushfiqur Rahman said, ‘We are far behind in the demand for leather or footwear all over the world. We are always committed to the development of leather and leather products.’​

 

[Saif]

Leather exports drop 64% in 10 years as CETP woes linger

The country’s leather exports have plunged by over 64 percent in the past decade, due mainly to the failure to complete the Central Effluent Treatment Plant (CETP) at the Savar Tannery Estate -- a key requirement for obtaining international environmental certifications.

www.thedailystar.net

Leather exports drop 64% in 10 years as CETP woes linger

The country's leather exports have plunged by over 64 percent in the past decade, due mainly to the failure to complete the Central Effluent Treatment Plant (CETP) at the Savar Tannery Estate -- a key requirement for obtaining international environmental certifications.

In the fiscal year (FY) 2014, the country exported leather worth $397 million. By FY2024, that figure had fallen to just $142.54 million.

Leather exporters described the stalled CETP as the single biggest hurdle to achieving Leather Working Group (LWG) certification, the globally recognised benchmark for environmental compliance in production.

Without LWG certification, Bangladeshi leather remains locked out of premium international markets, said Syed Nasim Manzur, president of the Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh (LFMEAB).

Leather exporters described the stalled CETP as the single biggest hurdle to achieving Leather Working Group (LWG) certification, the globally recognised benchmark for environmental compliance in production

"Without LWG certification, we are invisible to major global buyers who demand verifiable sustainable sourcing" said the association president at an event organised by the Dhaka Chamber of Commerce and Industry (DCCI) in the capital yesterday.

Following years of resistance, tanneries were relocated from Hazaribagh area in Dhaka to the capital's outskirts Savar in 2017.

The move was meant to improve environmental standards, but the CETP still remains incomplete and largely non-functional.

Unable to meet the strict compliance demands of leading global brands, Bangladesh consequently sells leather at cut-price rates to Chinese intermediaries.

LFMEAB President Manzur urged the government to take immediate action, including appointing an internationally accredited operator for the CETP, offering green financing, and extending the same policy support enjoyed by the readymade garment sector.

That includes bonded warehouse facilities and duty-free imports of machinery. Manzur said that a fully functioning CETP could potentially double leather exports.

As international markets increasingly prioritise sustainability, he called for rapid reforms to establish Bangladesh as a responsible producer.

"The local leather sector can thrive in the post-LDC era," Manzur added, "but only if we deliver on compliance, starting with a fully operational, LWG-ready CETP."

Speaking at a separate focus group on post-LDC export strategies, Adilur Rahman Khan, adviser to the Ministry of Industries, echoed this urgency.

With Bangladesh set to graduate from least developed country (LDC) status by 2026, the adviser said the country must prepare fast.

Despite earning around $1.2 billion annually from leather, leather goods and footwear, Bangladesh accesses only a sliver of the $420 billion global leather market, Khan added.

"Achieving the government's $12 billion export target by 2030 will require bold reforms, international certification and a modernised value chain," he said.

Md Saiful Islam, chairman of the Bangladesh Small and Cottage Industries Corporation (BSCIC), said that the Savar CETP can currently treat only 14,000 cubic metres of effluent daily.

It is well below the 32,000 to 35,000 cubic metres required during the peak season after Eid-ul-Azha, the second largest festival for Muslims involving the ritual of sacrificing animals.

Islam said six individual Effluent Treatment Plants (ETPs) have been approved, two of which are nearing completion. Another 8 to 10 are in the pipeline, expected to add an extra 8,000 to 10,000 cubic metres of capacity.

According to the BSCIC chairman, a technical committee has been tasked with upgrading the CETP's capacity to 25,000–26,000 cubic metres, with long-term plans to reach 40,000. This effort is backed by a European Union-supported project.

Md Hafizur Rahman, administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), said the leather sector is struggling to attract foreign investment and buyers because of its lack of certification.

He said it was unclear how quickly these challenges could be resolved, but stressed that the issues surrounding the CETP must be addressed without further delay.

Nazneen Kawshar Chowdhury, additional secretary of the WTO wing at the Ministry of Commerce, said the post-LDC era would come with significant challenges, but also with opportunities.

She urged the private sector to prioritise compliance with environmental and labour standards and said the government was open to collaboration in enhancing the CETP's capacity.

Md Ariful Haque, director general of the Bangladesh Investment Development Authority (Bida), said the country's economy has the potential to double in size over the next 15 years, but achieving this will require close coordination between public and private sectors.

To support local businesses and spur growth, Haque said Bida is stepping beyond conventional approaches and directly engaging with foreign investors, which he believes will bring promising results.

The event was moderated by DCCI President Taskeen Ahmed. It was also addressed by Md Nurul Islam, CEO of the Bangladesh Tanners Association (BTA); Ibnul Wara, managing director of Austan Ltd; Md Nasir Khan, managing director of Jennys Shoes Ltd; Ziaur Rahman, managing director of Bay Group; and M Abu Hurairah, former vice-president of DCCI.​

 

[Saif]

CETP crisis chokes leather industry's growth

The world is more environmentally conscious than ever, as the threats of environmental degradation and water pollution become increasingly evident. Fashion, being one of the most polluting industries on the planet, can no longer evade its responsibility. There is a growing international pressure fo

thefinancialexpress.com.bd

CETP crisis chokes leather industry's growth

Atiqul Kabir Tuhin
Published :
May 29, 2025 01:05
Updated :
May 29, 2025 01:05

The world is more environmentally conscious than ever, as the threats of environmental degradation and water pollution become increasingly evident. Fashion, being one of the most polluting industries on the planet, can no longer evade its responsibility. There is a growing international pressure for the industry to acknowledge its effect on the environment and adopt environmentally preferred manufacturing methods and materials. And those unwilling or unprepared to innovate and adapt will inevitably be left behind, forced to bear the consequences of inaction and reflect on the opportunities they have lost.

In this context, Bangladesh's leather industry exemplifies a sector weighed down by such missed opportunities, primarily due to its failure to comply with international environmental standards. As the country's second-largest source of export earnings after ready-made garments (RMG), the leather industry holds immense potential. Unlike the RMG sector, which depends heavily on imported raw materials, the leather industry can boast of having a ready domestic supply of raw materials and competitively low labour costs. Despite these inherent advantages, the sector has struggled to reach its potential. The root causes lie in weak governance, environmental negligence, and an evident lack of political commitment to make the Central Effluent Treatment Plant (CETP) at the Savar Tannery Estate fully operational.

Leather processing is intrinsically harmful to the environment, with its heavy reliance on toxic chemicals and generation of substantial volumes of hazardous wastewater. To address these concerns and encourage cleaner practices, the Leather Working Group (LWG) was formed in 2005 by a coalition of global brands such as Nike, Adidas, and Timberland. LWG established a unified audit framework focusing on environmental management, chemical usage, waste treatment, and traceability of raw materials. It has since become the most recognised standard for environmentally responsible leather production worldwide. Without meeting the criteria set by LWG, manufacturers are effectively locked out of premium international supply chains.

LWG's database reveals a dismal compliance record for Bangladesh's leather industry. Italy leads with 952 certified factories, followed by 334 in India, 263 in China, 62 in Pakistan, 27 in Vietnam, and 24 in Taiwan. In contrast, Bangladesh has only eight LWG-certified leather goods manufacturers. This limited compliance has had significant repercussions. According to the Bangladesh Tanners Association, the industry loses an estimated $500 million annually in potential export revenue due to the absence of LWG certification. This is further reflected in export earnings, which fell from $1.13 billion in 2012 to $970 million in 2024-a decline largely attributed to non-compliance with international environmental standards.

Despite the relocation of tanneries from Hazaribagh to Savar more than eight years ago, the promised improvements have not materialised. The CETP at Savar, which was intended to address the environmental hazards of leather processing, remains incomplete and severely underperforming. It currently handles only about 14,000 cubic meters of waste per day, far short of the 35,000 cubic meters generated during peak periods such as Eid-ul-Azha. This shortfall means that significant amounts of untreated effluent continue to pollute the environment.

So, the question is how long will it take to establish a fully functional CETP? It is worth noting that the government invested approximately $53 million (Tk 565 crore) in the CETP facility, which was installed by a Chinese company. However, the plant was handed over to the Dhaka Tannery Industrial Estate Waste Treatment Plant Company (DTIEWTPC) in an incomplete state. Now, the facility requires extensive renovation and upgrade to meet operational standards. Instead of ensuring the CETP's functionality, the previous government tried to shift the responsibility to individual tanners, expecting them to establish their own Effluent Treatment Plants (ETPs).

While about six tanners have independently set up Effluent Treatment Plants (ETPs) to meet environmental requirements and maintain access to international markets, the majority of tanneries in Savar are small-scale operations. These smaller tanneries lack the financial capacity to install individual ETPs, making LWG certification unattainable for most. Consequently, Bangladesh's leather exporters are forced to sell around 65 per cent of their tanned leather to middlemen and importers in China, often at prices nearly 60 per cent lower than what could be secured through direct sales to high-end markets. This situation leaves many tanneries grappling with reduced orders, financial instability, unpaid suppliers, and defaulted bank loans, trapping the sector in a cycle of underperformance and stagnation.

The present interim government, which includes several well-known environmentalists in its advisory council, is expected to take the issue more seriously. Beyond the financial losses caused by this non-compliance, the environmental and public health consequences are equally, if not more, alarming. The Dhaleshwari River, adjacent to the Savar leather estate, has become a toxic waterway, heavily contaminated by untreated effluents and solid waste. One of the most dangerous pollutants is chromium, a chemical used extensively in tanning. When mishandled, chromium poses serious environmental and health risks. Studies have shown that toxic chromium has entered the food chain, contaminating fish and poultry that consume feed made from affected by-products. It, therefore, poses a grave threat to public health.

Bangladesh has already proven its capacity to maintain environmental compliance in the RMG sector. So, why not the same be replicated in the leather sector? As Bangladesh approaches its graduation from Least Developed Country (LDC) status, the leather industry represents a crucial opportunity to diversify the country's export portfolio. Industry experts suggest that with the right mix of environmental compliance, incentives, and policy support-similar to those provided to the RMG sector-leather exports could reach $5 billion annually by 2030. However, continued inaction threatens to push the industry further into decline, deepening both economic losses and environmental damage.​

 

[Saif]

Tanners may get slight tariff relief on chemicals

The government is considering reducing customs duty on seven imported tanning chemicals in the upcoming national budget, offering slight relief to the country’s struggling tannery sector.

www.thedailystar.net

BUDGET FOR FY26
Tanners may get slight tariff relief on chemicals

The government is considering reducing customs duty on seven imported tanning chemicals in the upcoming national budget, offering slight relief to the country's struggling tannery sector.

At present, only 27 tanners benefit from bond facilities designed to support the domestic leather industry. Around 100 others operate without such privileges and face higher and varied duties on chemical imports, according to finance ministry sources.

Industry leaders say this disparity creates an uneven playing field. The Bangladesh Tanners Association (BTA) has told the National Board of Revenue that the existing duty structure is hurting the competitiveness of the sector.

There are also reports that some traders are exploiting the bond system by importing chemicals duty-free and then selling them on the open market — an abuse made more profitable by the high duties faced by non-bonded tanners.

In response, the government is now weighing a reduction in customs duty on seven key chemicals used in tanning, including chromium sulphate, acid dyes, and wattle extract.

Under the proposal, duties on six of these items may be cut from 5 percent to 1 percent, while the duty on sulphate could drop from 10 percent to 5 percent. However, the NBR may also impose a 15 percent value added tax (VAT) on sulphate.

Even so, tanners say the planned changes are too little to make a real difference.

In a formal submission to the NBR in March this year, the BTA called for a sharp cut in the total tax incidence, which now reaches as high as 58.6 percent on some chemicals when advance taxes are included.

The association urged the government to bring that figure down to 7.5 percent.

"The current import tax structure, ranging from 35 to nearly 40 percent on essential chemicals, is simply unsustainable," said Shaheen Ahmed, chairman of the BTA.

"Chemical imports are the lifeline of the tannery sector. Except for basic inputs like salt and lime, we rely entirely on imported chemicals. Competing with countries that enjoy cheaper raw materials becomes nearly impossible under these tax conditions," said Ahmed.

He claimed that minor reductions in duty will not solve the bigger problem.

"Even if duties are cut by a few percentage points, it doesn't resolve the bigger issues," he said.

"Large commercial importers might absorb these costs, but small and mid-sized tanneries operating under strict compliance frameworks are disproportionately burdened," added the association chairman.

Mizanur Rahman, general secretary of the association and director of Samata Leather Complex Ltd, said that earlier reductions in duty, such as those on chromium sulphate, were eventually reversed, eroding industry confidence.

"Only seven products now receive marginal benefits, while duties on many essential chemicals remain unchanged," he told The Daily Star. "A 4 percentage-point concession is too little to offset the rising compliance and administrative costs we face."

According to Rahman, lowering chemical costs allows tanners to pay higher prices for raw hides, which in turn encourages internal competition and improves market dynamics.

He said that without meaningful reforms, many small and medium-sized tanneries could be forced to shut down.

"If current conditions persist, international buyers will increasingly turn to more cost-efficient suppliers elsewhere," he said.

"If the government genuinely intends to support the leather sector, the duty structure must be redesigned to reflect practical, on-the-ground needs," he added.

Speaking at a Dhaka Chamber of Commerce & Industry (DCCI) event on Sunday, Syed Nasim Manzur, president of the Leather Goods and Footwear Manufacturers & Exporters Association of Bangladesh, said the country produces around 350 million square feet of leather annually. Of this, nearly 40 percent is collected during the Eid-ul-Azha season.

Yet only 20 percent to 25 percent is processed locally, mainly for shoes and bags. The rest is exported, with 65 percent passing through Chinese middlemen who offer lower prices than direct international buyers, said Manzur.

For the industry, Manzur cited infrastructure and compliance issues as key setbacks.

"The Central Effluent Treatment Plant (CETP) at Savar is still non-functional, and we do not have critical global certifications like Leather Working Group (LWG) approval. Without these, we cannot enter premium international markets," he said.​