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

[Saif]

Loan release for leather sector falls short of target

The Bangladesh Bank’s initiative to inject Tk 232 crore into the leather sector for procuring rawhide during Eid-ul-Azha has fallen significantly short, with only Tk 125 crore disbursed to businesses, according to industry insiders...

www.newagebd.net

Loan release for leather sector falls short of target
United News of Bangladesh . Dhaka 12 June, 2025, 23:01

The Bangladesh Bank’s initiative to inject Tk 232 crore into the leather sector for procuring rawhide during Eid-ul-Azha has fallen significantly short, with only Tk 125 crore disbursed to businesses, according to industry insiders.

Bankers cited a lack of interest among leather traders in taking out new loans as a reason for the shortfall, while the industry insiders highlighted a sharp rise in loan defaults, which has made banks more reluctant to extend credit to the sector.

As a result, tannery owners and seasonal leather suppliers have been unable to purchase sufficient quantities of rawhide during the peak Eid-ul-Azha season.

Stakeholders are now calling for easier loan terms and relaxed documentation requirements ahead of what is typically the country’s largest rawhide collection period.

Although nine banks initially approved Tk 232 crore in loans for rawhide procurement this year, only Tk 125 crore was disbursed, leading to a funding shortfall that entrepreneurs say has hampered both the collection and processing of rawhide.

According to sources, the Tk 125 crore disbursed this Eid season marked a steep decline from previous years — down from Tk 270 crore in 2024, Tk 259 crore in 2023, Tk 443 crore in 2022, Tk 735 crore in 2021 and Tk 1,800 crore in 2019.

Md Shaheen Ahmed, chairman of the Bangladesh Tanners Association, told UNB, ‘Since leather is a perishable product, it needs to be collected and stored quickly. Cash is needed to buy leather collected from various warehouses across the country.’Bangladeshi cuisine recipes

‘For this, the warehouses collect leather from part-time traders during the Eid season. But even though tannery owners do business with their own capital throughout the year, special financing is needed for additional cash during Qurbani. This time, the banks had a demand of Tk 300–350 crore. They gave only Tk 125 crore, which is not enough,’ he added.

He said that with adequate cash loan support, problems in the leather sector could have been mitigated. ‘The poor and needy would have received cash from the leather. Foreign exchange income would have increased by exporting this,’ he pointed out.

Bangladesh Bank executive director and spokesperson Arif Hossain Khan said that the target for lending to the leather sector this time was Tk 232 crore. ‘It is not possible to say before the bank opens how much loan will be waived in the end,’ he said.

He also acknowledged that a segment of traders failed to repay borrowed funds, which has led to a significant rise in loan defaults in the sector. ‘If they ask for loans and don’t repay them, who will give them new loans? So they have to take loans with the mindset of repaying them. Otherwise, the crisis will not end,’ he said.Bangladeshi cuisine recipes

According to the Bangladesh Bank’s latest report, the outstanding loan balance in the leather industry stood at Tk 12,628 crore as of December 2024. Of this, Tk 4,844 crore has defaulted, accounting for 38 per cent of total loans in the sector.

The Bangladesh Tanners Association represents approximately 800 members, including tannery owners and commercial exporters. There are 1,866 large and medium-sized tanneries across the country.

Besides, many small tanneries collect leather from seasonal entrepreneurs during Eid-ul-Azha.

Tanner Anwar Hossain said that while most rawhide was collected during Eid-ul-Azha, inadequate management led to the wastage of roughly 30 per cent each year.

The leather sector not only contributes to national growth and employment but also earned approximately $1.13 billion in foreign exchange during the last financial year, underscoring the need for focused attention and support.Bangladeshi cuisine recipes

Amjad Ali, a seasonal leather supplier, said, ‘Banks only give loans to tannery owners and exporters. They do not give loans to others involved in the raw leather business. If money had been received according to demand, the spoilage of leather could have been prevented.’​

 

[Saif]

Synthetic footwear exports soar as global demand shifts

Bangladesh’s non-leather footwear sector is emerging as a steering force in the country’s export landscape, driven by global shifts in consumer preferences, strong manufacturing capacity, and competitive pricing

www.thedailystar.net

Synthetic footwear exports soar as global demand shifts

Bangladesh's non-leather footwear sector is emerging as a steering force in the country's export landscape, driven by global shifts in consumer preferences, strong manufacturing capacity, and competitive pricing

While leather footwear still leads with $620.17 million in exports until May of fiscal year 2024-25, up 28.96 percent year-on-year, the non-leather segment is rapidly catching up.

In the first 11 months of the current fiscal year, non-leather footwear exports fetched $494.28 million, marking a 30.25 percent growth compared to $379.48 million in the same period of the previous fiscal year, according to Export Promotion Bureau data.

In May alone, leather footwear fetched $74.82 million compared to $48.37 million a year earlier.

Industry insiders credit this growth to modern production capacity and fewer compliance burdens, making it easier for Bangladeshi manufacturers to meet global standards and attract international buyers.

"The non-leather segment benefits from fewer regulatory hurdles," noted one industry expert.

"Unlike the leather sector, which requires certification from the Leather Working Group (LWG) and faces challenges related to raw material quality and environmental compliance, synthetic footwear producers primarily need to meet factory compliance standards," he said.

As demand for fashionable, affordable, and sustainable footwear grows globally, particularly among younger consumers, the synthetic footwear segment is well-positioned to become a key contributor to Bangladesh's export diversification strategy.

In the decade preceding the end of FY24, non-leather footwear exports ballooned 120 percent, jumping from $189 million to $416 million.

"The young generation in the Western world is shifting from leather to synthetic shoes as they are more comfortable, fashionable, and cheaper," said Riad Mahmud, managing director of Shoeniverse Footwear.

In contrast, leather shoes are worn for formal occasions and have limited design flexibility, causing a global demand decline of around 12 percent annually, he noted.

This shift has fuelled steady growth in synthetic shoe demand over the past five to six years.

Shoeniverse's Mymensingh-based factory, employing around 4,700 workers, supplies footwear to major global brands including Inditex, Aldi, Matalan, and RedTape.

Mahmud said global brands are increasingly placing orders in Bangladesh, drawn by its competitive labour costs and proven expertise in apparel manufacturing.

He emphasised that the non-leather footwear sector holds strong potential due to its labour-intensive nature, giving Bangladesh a cost advantage over countries like Vietnam.

However, challenges persist. Delays in customs clearance for raw materials hamper lead times—a critical factor in the fashion-driven synthetic shoe market that demands quick delivery.

Despite this, demand remains robust. Shoeniverse is fully booked through March next year, with buyers seeking new slots amid potential US tariffs on Chinese goods.

A market assessment by Bangladesh Investment Development Authority (Bida) supports the trend, citing rising non-leather footwear exports due to increased orders from global brands such as H&M, Puma, Decathlon, FILA, and Kappa.

Major export destinations include Spain, France, the Netherlands, South Korea, India, Italy, and Germany.

Maf Shoes Ltd, a TK Group subsidiary exporting to France and Germany, boosted daily output from 50,000 to over 65,000 pairs. "European demand is soaring but structural barriers remain," said Managing Director Hasnat Md Abu Obida Marshall.

Europe remains the top market for Bangladeshi synthetic shoes, yet exporters face customs confusion, weak logistics, and exclusion from RMG-specific waivers.

"During Eid, our containers were stuck, but penalty waivers applied only to the BGMEA," a frustrated exporter said.

Moreover, competing with China is tough. While Chinese exporters enjoy 7 percent to 12 percent incentives and raw material self-sufficiency, Bangladesh battles high import duties, delays, and little policy support.

"We import everything and still try to compete on price," said one exporter.

The country also lags in value-added footwear. Despite paying lower wages than Vietnam, productivity remains much lower in Bangladesh.

"We are burning money just to keep factories running," the exporter added.

Some big global firms are eyeing India for relocation, drawn by availability of land, tax breaks, and better infrastructure in states like Tamil Nadu and Kerala.

"India calls investors—we don't even have an exit policy for foreign investment," said Marshall.

To unlock growth, exporters are calling for swift government action, including a dedicated synthetic footwear policy, equal customs treatment as RMG, access to technology financing, and incentives for backward linkage industries, he said.

Jakaria Shahid, managing director of Edison Footwear Limited, sees the synthetic footwear sector as a crucial driver for future export diversification, thanks to its fast-paced expansion.

However, he pointed out that major international brands like Nike and Adidas have yet to enter the Bangladeshi market, mainly because local manufacturers struggle to meet required lead times.​

 

[Bilal9]

Here is a factory overview for Shoeniverse Ltd. in Mymensingh

 

[Bilal9]

Another factory profile for Apex Footwear Ltd. in Gazipur. This is one of the largest state-of-the-art shoe factories in South Asia. They produce both leather-dress and non-leather-sports shoes.