Rawhide import up substantially

Badrul Ahsan The country's rawhide import has been increasing significantly mainly due to a declining trend in rearing cattle, both at households and commercial farms, and the growing export of leather and leather goods abroad, industry insiders said. The rising trend of rawhide import is forcing the country to spend a large amount of foreign currency every year, Bangladesh spent over Tk 4.36 billion in importing raw hide in the last fiscal year (2010-11). Considering the decline in rawhide availability from domestic sources and growing demand for rawhide in the export-oriented leather goods manufacturing units of the country, the government is allowing import of rawhide at zero duty for the last couple of years. According to the statistics of the National Board of Revenue (NBR), Bangladesh has imported 3,111 tonnes of rawhide in the fiscal 2008-09, 4,059 tonnes in 2009-10 and 5,057 tonnes in the last fiscal (2010-11). "In 2006, we could collect more than 250 million square feet (sft) of rawhide locally. But last fiscal, the supply was less than 200 million sft," general secretary of Bangladesh Tanners Association (BTA) Abdul Hai told the FE. "Most of the tanneries pass idle time during the off season, as their production capacities remain unused, due to insufficient supply of rawhide. The tanneries are incurring losses, as they are not able to produce finished leather according to their plan," Hai added. Most of the local export-oriented leather goods manufacturing companies, including Youngone, Bata and Apex Adelchi, are importing rawhide, mainly from Italy, Brazil, Africa, Latin America and the middle-east. Statistics of Export Promotion Bureau (EPB) show that export of finished leather and leather goods of the country has been increasing gradually for the last couple of years. Bangladesh has exported leather and leather goods worth US $552.64 million in FY 2010-11 compared to that of US $ 255.16 million in FY 2009-10, the EPB statistics said. Youngone sources said due to supply constrains of rawhide in the local market, various complexities in local sourcing, and cheaper prices abroad, they prefer import of rawhide. They said the import of rawhide by the Youngone might increase four times, when their new factory would go into production. Youngone is installing the largest footwear manufacturing plant of the world in Chittagong. "We urged the government several times to take necessary steps to boost livestock rearing in the country, considering its positive impact on different sectors, including footwear and tannery," they further added. Managing Director of Jakir Hossain Tannery, Md Sekantar Hossain has expressed his dismay as they cannot utilise their full capacity due to the shortage of rawhide which has caused huge losses to most of the small and medium tanneries every year. "We can run our factories at best six months in a year with rawhide procured during Eid-ul-Azha and Eid-ul-Fitr and rest of the year we can utilise at best thirty to forty per cent of our capacity," Hossain said. According to the statistics of the Board of Investment (BoI), a number of companies, both local and international, have recently listed themselves with the BoI for making huge investments in local leather products manufacturing sector. Some of them have already started production.