Leather sector now doubtful of promised stimulus package
Tuesday, 1 September 2009
Monira Begum Munni
Although the government has reduced leather export target to $230.52 million with a 30 per cent growth for the current fiscal year, the exporters apprehended that it was unachievable in the wake of global recession.
The Export Promotion Bureau (EPB) has set the target, after having observed 42 per cent or more than $127 million decrease in shipment from the exports of $304.32 million in the 2008-9 fiscal year.
"For the current fiscal we set 30 per cent growth target banking on the leather sector. I don't think the global recession would have a major impact on apparel exports," EPB vice-chairman Shahab Ullah told the FE.
He hoped that the impact of the recession will reduce and gradually export orders will increase.
The leather industry leaders expressed disappointment with the proposed target as they see no sign of government promised stimulus package to help overcome the recession hit sector.
"The proposed target is disappointing," the chairman of Bangladesh Tanners Association (BTA) Shahin Ahmed told the FE.
Recession has already eroded 40 per cent of our export earnings; he said adding that their recession compensation appeal has been ignored by the government.
Though the price has decreased globally, the export market has not yet expanded. As a result there is a huge stock of leather worth nearly Tk 25 billion (Tk 2,500 crore), moreover, leather worth over Tk 2 million would be collected during Eid- ul- Azha, sources said.
Talking to the FE, BTA chairman said the government assured of marginal import duty reduction on essential chemicals used in the leather industries. But the budget announcement had disappointed them, he added.
"All we have witnessed in the budget is two per cent import duty reduction on chemicals and increase of 2.5 per cent cash incentives on the export of finished goods. This is far below our expectation," he added.
To help the 87 per cent value added leather industry in the face of global financial recession, the government pledged reducing import duty on essential chemicals used in this sector.
Government also promised to consider bringing down the bank interest rates to rock bottom to give the sector a much needed flip, Mr Shahin Ahmed said.
Moreover, the 25 per cent cash incentives against the export of craft and finished leather goods that was promised as part of the stimulus package announced by the government, remained inaccessible to the industry leaders, he added.
He requested the government to provide cash incentive to the cruft leather export as finished leather and goods export is only 20 per cent while cruft leather export is 80 per cent.
The country's leather bags and purses export recorded a nearly 90 per cent growth and earned $16.89 million in the last fiscal year.
Although the government has reduced leather export target to $230.52 million with a 30 per cent growth for the current fiscal year, the exporters apprehended that it was unachievable in the wake of global recession.
The Export Promotion Bureau (EPB) has set the target, after having observed 42 per cent or more than $127 million decrease in shipment from the exports of $304.32 million in the 2008-9 fiscal year.
"For the current fiscal we set 30 per cent growth target banking on the leather sector. I don't think the global recession would have a major impact on apparel exports," EPB vice-chairman Shahab Ullah told the FE.
He hoped that the impact of the recession will reduce and gradually export orders will increase.
The leather industry leaders expressed disappointment with the proposed target as they see no sign of government promised stimulus package to help overcome the recession hit sector.
"The proposed target is disappointing," the chairman of Bangladesh Tanners Association (BTA) Shahin Ahmed told the FE.
Recession has already eroded 40 per cent of our export earnings; he said adding that their recession compensation appeal has been ignored by the government.
Though the price has decreased globally, the export market has not yet expanded. As a result there is a huge stock of leather worth nearly Tk 25 billion (Tk 2,500 crore), moreover, leather worth over Tk 2 million would be collected during Eid- ul- Azha, sources said.
Talking to the FE, BTA chairman said the government assured of marginal import duty reduction on essential chemicals used in the leather industries. But the budget announcement had disappointed them, he added.
"All we have witnessed in the budget is two per cent import duty reduction on chemicals and increase of 2.5 per cent cash incentives on the export of finished goods. This is far below our expectation," he added.
To help the 87 per cent value added leather industry in the face of global financial recession, the government pledged reducing import duty on essential chemicals used in this sector.
Government also promised to consider bringing down the bank interest rates to rock bottom to give the sector a much needed flip, Mr Shahin Ahmed said.
Moreover, the 25 per cent cash incentives against the export of craft and finished leather goods that was promised as part of the stimulus package announced by the government, remained inaccessible to the industry leaders, he added.
He requested the government to provide cash incentive to the cruft leather export as finished leather and goods export is only 20 per cent while cruft leather export is 80 per cent.
The country's leather bags and purses export recorded a nearly 90 per cent growth and earned $16.89 million in the last fiscal year.