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

[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.​

 

[Bilal9]

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

View attachment 17943

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.​

Slight relief? These idiots should forego ANY tariff on tanning chemicals. I mean let's revive the leather sector first, then slowly impose tariffs to get back revenue.

If you have no revenue from a dying sector that was bustling even a decade ago, then what use are tariffs?

This stupidity boggles the mind...

 

[Saif]

Slight relief? These idiots should forego ANY tariff on tanning chemicals. I mean let's revive the leather sector first, then slowly impose tariffs to get back revenue.

If you have no revenue from a dying sector that was bustling even a decade ago, then what use are tariffs?

This stupidity boggles the mind...

Correct observation