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Finished leather exports decline 27.8pc in H1

Tannery relocation, price fall in international market blamed for the setback

January 28, 2018 00:00:00

Saif Uddin

Country's export earnings from finished leather registered 27.8 per cent fall to US$97.53 million in the first half of the current fiscal year (FY 2017-18), according to the latest data of Export Promotion Bureau (EPB).

The leather sub-sector earned $135.16 million in the corresponding period of last fiscal year (2016-17).

The export earnings faced the setback allegedly due to an adverse impact of the industry relocation to Savar and fall in prices of the products in the international market.

Besides, industry insiders blamed congestion in the Chittagong seaport that might have affected shipments of the products.

The country earned $232.61 million from finished leather export in the entire FY of 2016-17, down 16 per cent from $277.9 million in FY 2015-16.

When contacted, Bangladesh Tanners' Association (BTA) chairman Shaheen Ahamed told the FE that the relocation of tanneries from Hazaribagh to Savar without enough preparedness seriously affected the leather sector's performance in recent months.

"Half of the tanneries haven't become operational at their new location," he said, adding that the new industrial zone is yet to provide all required facilities to the tanners.

"Besides, a good number of workers switched over to other jobs after failing to adapt to the changes after relocation," he said.

Sources also said that required facilities like roads, drainage systems, uninterrupted power supply, fully functional CETP are still absent in the Savar tannery estate.

Mr Shaheen was, however, hopeful about the sector's prospect due to the advantage of available raw materials and affordable labour resources in the country.

However, the earnings from the overall leather sector -- finished leather, leather-products and leather-footwear -- decreased slightly by 1.21 per cent to $627.86 million in the first half of 2017-18 than that of $620.27 million in the same period of previous FY.

BTA general secretary Md. Shakawat Ullah said a decline in finished leather's price in global market is another reason for the negative growth of the country's leather sector.

"The price declined by almost 30 per cent in the global market in recent months," he said.

He also pointed out that the procrastination over completion of the estate was another reason behind the negative growth as many foreign buyers still reluctant to visit the new facilities due to environmental hazards as installation of the CETP is not yet completed.

Some 100 of the total 155 tanneries have so far started operations in the new facilities, he said, adding that there were 222 tanneries in Hazaribag.

"We expect to turn around soon after the Savar tannery estate becomes fully operational," he added.

He said the country has an annual capacity to process nearly 300 million square feet of finished leather, of which around 25 per cent are sold to local leather goods manufacturers.

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