Exporters seek 7.5pc cash incentives on export of crust leather
Sunday, 15 November 2009
FE Report
The country's leather exporters, affected by global recession, have placed various demands, including a 7.50 per cent cash incentive on export of crust leather, to help them cope with the external shock.
Leaders of the Bangladesh Finished Leather, Leather-Goods and Footwears' Association (BFLLFEA) and the Bangladesh Tanners Association (BTA) jointly paced their demands at a meeting with Finance Minister AMA Muhith at the later's office Thursday.
Both the associations also sought the finance minister's necessary intervention in resolving the problems with regard to the relocation of tannery units from the city's Hazaribagh area to the new leather estate at Savar.
The sector leaders informed the finance minister that exports of leather had faced a declining trend mainly due to the fallout of the global meltdown.
Citing figures, BFLLFEA chairman Md. Shahin Ahmed said the country's leather exports fell by 37.65 per cent to US$ 177.32 million in the fiscal year (FY) 2008-9 compared to the previous year.
The declining trend in the leather exports still prevails as the earnings from the shipment of leather also sustained a 24.55 per cent fall to reach $ 45.46 million in the first quarter of the current fiscal over the matching period of last fiscal.
Besides, the price of leather has also come down significantly in the export markets following the global financial crisis, they mentioned.
"It will not be possible for the local leather sector to survive unless the government provides at least 7.50 per cent subsidy on leather exports," BFLLFEA chairmen said.
The industry said although the government in its stimulus package had proposed that cash incentive on export of leather and leather goods would be 2.50 per cent to 17.50 per cent.
But the Bangladesh Bank (BB) in its circular on June 5 last directed to raise export subsidy only for leather goods, exempting the leather from the benefit, the sector leather informed the finance minister.
Currently, the government provides a 7.5 per cent incentive on finished leather, export of which accounts for only 23 per cent of overall leather exports.
Although crust leather share in exports is around 77 per cent of the export earnings from leather sector, the item is not getting any cash support, the BFLLFEA said.
Apart from the cash incentive, the sector leaders also urged the government to provide Tk 2.50 billion as compensation for shifting tannery units to Savar leather estate, as was recommended by a committee, headed by industries secretary.
BTA chairman Rezaul Karim also sought bank credit for the tanners those have to be shifted to Savar at 3.0 per cent rate of interest up to 10 years and early implementation of the BB circular regarding resolving problems of sick and non-performing tannery units.
The country's leather exporters, affected by global recession, have placed various demands, including a 7.50 per cent cash incentive on export of crust leather, to help them cope with the external shock.
Leaders of the Bangladesh Finished Leather, Leather-Goods and Footwears' Association (BFLLFEA) and the Bangladesh Tanners Association (BTA) jointly paced their demands at a meeting with Finance Minister AMA Muhith at the later's office Thursday.
Both the associations also sought the finance minister's necessary intervention in resolving the problems with regard to the relocation of tannery units from the city's Hazaribagh area to the new leather estate at Savar.
The sector leaders informed the finance minister that exports of leather had faced a declining trend mainly due to the fallout of the global meltdown.
Citing figures, BFLLFEA chairman Md. Shahin Ahmed said the country's leather exports fell by 37.65 per cent to US$ 177.32 million in the fiscal year (FY) 2008-9 compared to the previous year.
The declining trend in the leather exports still prevails as the earnings from the shipment of leather also sustained a 24.55 per cent fall to reach $ 45.46 million in the first quarter of the current fiscal over the matching period of last fiscal.
Besides, the price of leather has also come down significantly in the export markets following the global financial crisis, they mentioned.
"It will not be possible for the local leather sector to survive unless the government provides at least 7.50 per cent subsidy on leather exports," BFLLFEA chairmen said.
The industry said although the government in its stimulus package had proposed that cash incentive on export of leather and leather goods would be 2.50 per cent to 17.50 per cent.
But the Bangladesh Bank (BB) in its circular on June 5 last directed to raise export subsidy only for leather goods, exempting the leather from the benefit, the sector leather informed the finance minister.
Currently, the government provides a 7.5 per cent incentive on finished leather, export of which accounts for only 23 per cent of overall leather exports.
Although crust leather share in exports is around 77 per cent of the export earnings from leather sector, the item is not getting any cash support, the BFLLFEA said.
Apart from the cash incentive, the sector leaders also urged the government to provide Tk 2.50 billion as compensation for shifting tannery units to Savar leather estate, as was recommended by a committee, headed by industries secretary.
BTA chairman Rezaul Karim also sought bank credit for the tanners those have to be shifted to Savar at 3.0 per cent rate of interest up to 10 years and early implementation of the BB circular regarding resolving problems of sick and non-performing tannery units.