Footwear industry set to earn $1.0b from exports in 5 years

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Naim-Ul-Karim
The country's footwear industry is set to emerge as a $1.0b billion export earning sector within five years as the world's renowned shoe retailers have started to shift their focus on Bangladesh as a prime source of supply, local manufacturers said on Sunday.
They said Bangladesh would turn out to be a favoured destination of the global footwear importers after the European Union decided to scrap the facility offered to Vietnam from January next year.
The union of the 27-nation recently scrapped the Generalised System Preferences (GSP) facility for Vietnam-made footwear arguing that the South East Asian country, which earned almost US$ 4.0 billion last year from exports of footwear, no longer qualifies for GSP because of the relative strength of its industry.
"Earning at least $1.0 billion from exports of footwear will not at all be a matter for us by end of the 2012-13 fiscal year," president of Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association (BFLLGFEA) Tipu Sultan told the FE on Sunday.
Explaining the reasons of footwear export boom, he said Bangladesh is now in a better shape as Chinese and Vietnamese shoes have become costlier in the global market for various reasons including soaring labour costs and withdrawal of GSP facilities.
China, the world's largest shoe exporting country, accounts for around 62 per cent of the global market while Vietnam 8.0 per cent, Italy 12 per cent and the rest of the world provide the remaining 18 per cent.
Currently, the world market for shoes and other leather products is more than US$ 100 billion a year and sports shoe accounts for nearly $40 billion.
Mr. Tipu said: "Our position is better than any other country in the world as we have available raw materials and cheaper work force."
He said: "Italian brand shoe makers has also shifted their focus on Bangladesh from India as we have quality hides and skins which is the basic raw material for manufacturing good shoes."
Mr. Sultan said representatives of the world's leading brand shoe companies have been visiting the country's shoe factories over the past few months for placing orders and establishing joint venture factories.
Experts from Gucci of Italy, Nike of United Kingdom, Reebok of Germany, Timberland of the USA and the ABC-Mart Incorporate of Japan recently visited a number of local shoe factories including Apex Shoes, Jennys Footwear Limited, HNH footwear and Bay Footwear and enquired about their existing infrastructures, shoe manufacturers said.
A BEPZA official said a good number of giant shoe makers of South Korea, China are in touch with the BEPZA to explore possibility of relocating their factories here.
Of around $100 investment agreement signed in July, he said around $38 million was for establishing footwear factories in Karnaphuli EPZ in Chittagong.
However, local manufactures said they require government's policy support to make the sector more vibrant and diversify the country's exportable products.
They said the sector needs to import a variety of accessories and chemicals to manufacture quality shoes. "We want easy access to the accessories and chemicals through government's policy support," Tipu Sultan added.
The world's leading brand retailers mainly want to import sports shoes, ladies shoes and dress shoes from local manufacturers.
The country's footwear manufacturers, who recorded over 75.61 per cent growth in export of shoes in the first month of the current fiscal, said the growth will rise to 200-300 per cent in the near future.
"We don't think that the current growth rate in export of footwear will dip due to slowdown in economy in USA and Europe as Bangladesh will export mainly standard shoes for mass use," Mr. Tipu said.