The International Finance Corporation (IFC) said that attaining the leather export target of US$5.0 billion by 2021 would not be possible for Bangladesh.
In an export roadmap, the IFC, based on natural growth and historical trend, predicted that export of leather, leather goods and footwear would reach half the target set by the government over the next two years.
"…the recent trend in export growth indicates that the target of $5.0 billion by 2021 will be very difficult," the World Bank's private lending arm said in the roadmap recently forwarded to the Ministry of Commerce.
The IFC roadmap, prepared for a period until 2025, said Bangladesh has a share of only 0.5 per cent in the world leather trade.
It outlined the strategy for enhancing leather sector exports and set a vision of ranking Bangladesh amongst the top 10 leather export countries in the world by 2025 from the present minuscule share.
It suggested planned and coordinated intervention from the government for raising exports in the leather sector. "It is high time for the intervention," the IFC noted.
Bangladesh needs to transform production and export of tannery raw materials to high end and compliant leather, attract massive domestic investment, and enhance capacity of private sector manufacturers, the IFC said.
It also noted that Bangladesh has to carry out aggressive marketing in the global leather market, establish effective linkage with major brands and retailers, and attract foreign direct investment (FDI) and joint venture from top actors of the leather goods and footwear market.
The IFC projected that by 2021 earnings from exporting 108 million pairs of footwear will fetch $1.5 billion while 90 million pieces of leather goods export will also bring $840 million.
It said some 720 million square feet leather, an additional $1.1 million additional investment, 300 acres of land, and 40 megawatt of electricity will be required while 0.2 million employment opportunity will be created by 2021.
By 2025, the IFC projected that the leather export sector would earn $5.52 billion by exporting 190 million pairs of footwear, and 234 million pieces of leather goods.
In that case, the roadmap projected that 1,600 million square feet leather $2.35 billion additional investment, 8,000 acres of land, and 130 megawatt of electricity would be required.
Some 380,000 new jobs will be created by 2025, of which 266,000 will be occupied by women, it said.
Meantime, the government has recently prepared a draft policy for the leather and leather goods sector aimed at promoting the industry for attaining the export target.
Chairman of Bangladesh Small and Cottage Industries Corporation (BSCIC) Mustak Hassan Md Iftekhar had earlier told the FE the policy aims to promote the potential private sector, creating new entrepreneurs and employment, attracting more investments, and increasing export earnings.
Data shows that export earnings from leather and leather goods were $1.13 billion in fiscal year 2014-15, which dropped to $1.09 billion in fiscal year 2017-18.
The overall export income from the leather sector fell by 8.0 per cent during the period.
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