Tanners have sought Tk 100 billion from the commercial banks in soft loan to establish international-standard tanneries in the industrial hub being built for them at Savar, industry insiders said.
Besides, the traders concerned have also demanded 12 years' tax holiday at the start of production and export from the new industrial belt.
Bangladesh Tanners Association (BTA) sent a letter to the Business Promotion Council (BPC) which passed it on to the Ministry of Commerce (MoC) recently, the sources said.
"We badly need long-term loan/soft loan at lower interest rate for building tanneries in Savar at international standards. It is quite impossible to bear all costs of relocation," Md Shahin Ahmed, BTA president, told the FE Sunday.
"We have proposed to the government for taking necessary initiatives for the bank loans. But there is no progress yet," he said.
A large number of tanneries may stop production if they do not get the soft or long-term loan facility at lower interest rates from banks, he added.
The entrepreneurs of the sector are worried over relocation of tanneries properly without long-term loans. The term should be of 20 years with grace period, sources said.
Rate of interest should be 4 per cent like that of special agricultural credits disbursed for cultivation of pulses, oilseeds, spices and maize, they said.
The government should give 6.0 percent subsidy on interest rate to the banks so that they could get 10 per cent in total when the banks lend to tanners at 4.0 percent rate, they said.
The tanners and the government signed a memorandum of understanding (MoU) in October last year to ensure relocation of Hazaribag tanneries away from the city to the Savar Tannery Estate.
Under the MoU, the government allocated Tk 2.5 billion as compensation to the tanners for relocation. "But we do not get the allocation," the BTA president said.
The relocation work on 80/85 tanneries out of 155 have already started, Mr. Shahin said.
He expressed the hope that they would be able to start production at the new location next year.
The tanners, in the letter, have also sought withdrawal of import duty on chemicals needed for tanning skins and hides.
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