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

[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.