Growth in export of leather and leather goods in two successive years including the last fiscal is no doubt good news. Although the growth is modest, the task was quite challenging given the turbulent political climate at home and the Euro-zone crisis afflicting the key leather markets overseas. In difficult situations such as this when sustainability in businesses is a big question, attainment of growth, however small, is indeed commendable.
Industry insiders attribute this to competitive pricing, quality assurance, on-time shipment and value addition. Export of higher value added products, particularly footwear, has helped local manufacturers in targeting the up-end segments of the market, earning more in unit prices. Besides, newer markets are also reported to have played an important role. Furthermore, it is considered that the new markets while boosting exports will continue to brighten the prospects for market expansion in the future. The country exported leather and leather goods worth $1.13 billion in fiscal year (FY) 2014-15 as against $1.12 billion in the previous one, making it the second highest contributor to national exports next to readymade garment (RMG). However, the sector still fell short of its export target for the respective years despite earning more than $1.0 billion in two years in a row. Industry experts, though, considered the targets rather impractical in view of the domestic and global trading scenario. They hold that the sector is set to do well in the major markets if value-added products continue to gain increased market access. Beside the predominant markets, Bangladesh leather products look prospective in Japanese, Indian, Nepalese and Australian markets in the near future. Of these, Japan looks to be the most promising which alone receives around 30 per cent of the country's leather exports.
Bangladesh's current share in the $215 billion global leather and leather goods market is only 0.5 per cent. This is otherwise far too short of the country's actual potential. One of the key shortcomings of the sector is the absence of a planned scheme to allow the sector to grow to its desired level. At the moment, one of the main handicaps appears to be the reluctance or unwillingness of the tannery owners at Hazaribagh to move to Savar tannery estate. This, many believe, will critically affect the industry. International retailers are under pressure from various quarters not to procure goods from as unhygienic and hazardous a place as Hazaribagh. In the wake of increasing concerns at international levels, not just by the rights groups but the media and the civil society as a whole, the dreadful working conditions in the tanneries, ruthless pollution of environment and water bodies may take too heavy a toll on the sector. In fact, the concerns over the garment factories making the retailers cautious whether to source from them may be far more severe in case of leather and leather products.
While shifting the tanneries calls for immediate attention of the government, attracting investment in the leather sector deserves priority in the government's scheme to bring in the desired expansion in the sector. Facilitation in market promotion, product diversification and adaptation, and exporting of high-end products to both traditional and new markets should also be the key aspects of government policy.
Facilitating the leather sector
FE Team | Published: August 29, 2015 00:00:00 | Updated: November 30, 2026 06:01:00
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