1. Overview:
As of recent days (2014) Leather Sector in Bangladesh is estimated to be over six decades old. The sector is considered as a driving force for the country’s economy as well as the biggest foreign exchange earner other than RMG (Ready Made Garments) and Frozen Food sectors. By and large, it has progressed with gradual development in export trade. In fact, real progress in terms of product development with respect to ‘Crust & Finished’ leather commenced in 1990’s following the ban on export of ‘wet-blue’ from Bangladesh.
The principal raw materials for this industry are cow and buffalo hides and goat and sheep skins. Bangladesh produces between 2% and 3% of the world’s leather. Most of the livestock base for this production is domestic, which is estimated as comprising 1.8 % of the world’s cattle stock and 3.7 % of the goat stock. [Source: Board of Investment, Bangladesh]
Around 250 million square feet raw hides and skins are annually processed consisting of 63.98% cowhides, 32.74%
goatskins, 2.23% buffalo hides and 1.05% sheep skins. Over 80% of which is exported in the form of Crust (70%), Finished (23%), footwear and leather-goods (7%). And the rest is consumed locally for footwear and leather-goods industries. According to EPB (Export Promotion Bureau), Bangladesh exports its leather, leather-goods and footwear to 53 countries of the world. The major importing countries are Italy, Germany, Japan, Spain, Hong Kong, China, Brazil, UK, Canada, Australia, the USA, Vietnam and Fiji Island.
In the last fiscal year, (July 2012 to June 2013), leather-sector exports had a value of $688.1 million. Exports of finished leather contributed $272.3 million, crust leather estimated US $ 104.3 and footwear exports accounted for $311.5 million. It is a remarkable increase of 23.5% in respect of previous fiscal year. [Source: Export Promotion
Bureau, Bangladesh]
Bangladesh leather is widely known around the world for its high quality of fine grain pattern, uniform fiber structure, smooth feel with natural fine texture etc. Apart from bovine and buffalo hides, goat and sheep skins, some quantity of Kangaroo hides (pickled or wet-blue) are imported from Australia and finished in Bangladesh and shoes are made of this kangaroo leather for export mostly to Japan. Some quantity of Ostrich leather is also imported from Australia for production of high quality and high priced bags and wallets for re-export to Australia.
Although there are reportedly over 240 tanneries in Bangladesh, but, in fact, 50-60 tanneries are in real operation with regard to production of ‘Crust & Finished’ leather. However, there are 150 members are officially enlisted with Bangladesh Tanners Association (BTA), the oldest leather association in Bangladesh. 
Some commercial traders are also engaged in export trade by doing ‘Job-Work’ in some tanneries. The rest of the vast section of tanneries are engaged in ‘wet-blue’ and ‘wet-white’ production and eventually they become forward linkage players to the other relatively large tanneries engaged in producing ‘Crust & Finished’ leather.
Bangladesh Leather Sector is privileged by two potential opportunities. Availability of raw hides and skins with globally recognized its fine textured grain. And enjoying a comparatively lower production cost due to having a large number of skilled and semi-skilled low wage work force, utility cost and cost of living in general. According to LSBPC (Leather Sector Business Promotion Council), around 100,000 people are employed directly or indirectly in leather and its sub-sectors. So, it is to say, Bangladesh Leather Sector has all the basic elements to make a sustainable prospective business here.
Having business-friendly environment and imposing European Union’s antidumping duties on the import
of shoes from China, many global leather giants especially shoemakers are rushing to Bangladesh. USA-based Timberland, Germany-based PICARD, Korea-based Youngone and most notably Taiwan-based Pou Chen Group (one of the world’s largest shoemakers, producing shoes for Adidas, Reebok, Nike, Puma and so on) as well as many renowned companies from the leather-world have shifted here lately and many more is in the pipe line to come to Bangladesh. Bata started its operation here in 1962 and continue to be the largest shoe maker together with tanning facilities and auxiliary items such as PVC, TPR, EVA and normal leather based shoes etc.
2. SWOT Analysis of Bangladesh Leather Sector:
Despite its enormous opportunities, it is still a long distance to be traversed as few as production of finished leather. Technology and other infrastructure are to be geared up. Moreover, environmental aspect is a big question.
2.1 Strength:
• Leather in Bangladesh is a predominant natural resource.
• Reputation for the fine textured hides and skins.
• Availability of raw hides and skins.
• Cost of production is comparatively lower.
• Leather sector enjoys a reduced rate of interest for industrial credit from the financial institutions.
• Presence of business-friendly environment.
• Overseas transportation is very well connected both by sea and air.
• Technologist in Leather, Footwear and Leather-Products are locally available
• Availability of low-wage labor force.
2.2 Weakness:
• Leather industry in Bangladesh has been built up haphazardly in Hazaribagh without proper planning.
• Congested area (nearly 200 tanneries are located in Hazaribagh on ±70 acres of land).
• The unplanned tanneries having insufficient infrastructure facility.
• No effluent treatment plant.
• Huge dependency on imported chemicals and accessories.
• Insufficient practical knowledge of modern technology.
• Lack of appropriate skills of the butcher in flaying and curing.
• Absence of modern slaughter-house.
• Inadequate marketing knowledge of local leather entrepreneurs.
• Lack of initiatives in arranging events (Fairs) to promote globally.
• Insufficient Research & Development facilities
• Poor demand in domestic market.
• No arrangement to improve skills of workers.
• Challenge of international brand image.
2.3 Opportunities:
• Increasing global demand for leather and leather products.
• High potential for quality raw materials (hides & skins) and maximum value-addition inside the country.
• Tax holidays, duty free imports of raw materials and machinery for export-oriented leather sector.
• Geographic location of the country is ideal for global trades with very convenient access to international Sea and Air route.
• Undergoing project of setting up a modernized and well-planned Leather Industrial Zone in Savar, Dhaka will result in overall productivity rise and environment safety with CEPT (Central Effluent Treatment Plant).
• Providing GSP (Generalized System of Preference) facilities to exporters.
• Opportunity of establishing by-product industry based on tannery-waste and slaughterhouse.
• Leather industries take duty draw-back at pre-fixed rates after each consignment of export is executed.
• Importing facilities of raw hides and skins (if necessary).
• Bangladesh is virtually located as a bridge between the emerging markets of South Asia and fastest growing markets of South East Asia and ASEAN countries.
• Easy, simple and flexible procedures to foreign investment.
• Bangladesh Government is offering unparalleled facilities to investors where 100% foreign investment is allowed.
• Enabling the private investors to set up private Export Processing Zones (EPZ). The units in private EPZ will enjoy facilities similar to those in government EPZs.
• Foreign Private Investment (Promotion and Protection) Act, 1980 ensures legal protection to foreign investment.
2.4 Threats:
• The impact of Climate Change is a great threat for Bangladesh.
• Political scenario remains teased.
• Poor country image with poor governance
• Corruption in state governance including corporate governance.
• Delay in executing integrated government policy for the development of leather sector.
• Tannery-effluent can be a huge threat to environment and human lives.
• Leather industry (tannery) growth rate is stagnant rather many tanneries closed down.
• Competing with strong competitors like China, India and Vietnam.
• Huge dependency on high priced imported chemicals and accessories.
• Lack of product diversification.
• Availability of low priced commodity products of synthetic fibers.
3. Key Players:
Leather Industry in Bangladesh involves a number of tanneries, footwear & leather-goods industries, associations, government and private entities. A short-listed leading organization in this regard is named herewith categorically.
3.1 Tanneries:
| Name | Address |
Apex Tannery Limited |
65-66 Motijheel C/A, Factory: |
Bay Tanneries Ltd. |
21, Hazaribagh T/A Dhaka-1209, Bangladesh. |
Bengal Leather Complex |
147, Hazaribagh T/A Dhaka-1209, Bangladesh. |
Dhaka Hide & Skins Ltd. |
147 Hazaribagh T/A Dhaka-1209, |
Karim Leathers Ltd. |
180 Hazaribagh T/A Dhaka-1209, Bangladesh. |
Kid Leather Industry Ltd. |
19, Hazaribagh T/A Dhaka-1209, Bangladesh. |
Madina Tannery |
114 Poet Nazrul Islam Road Sadarghat, Chittagong, Bangladesh |
Reliance Tannery Ltd. |
48/2/K, Moneshwar Road, Dhaka-1209, Bangladesh, |
RMM Leather Industries Ltd. |
Corporate office: Factory: |
SAF Industries Ltd. |
Corporate Office: Factory: |
3.2 Footwear/Leather-Goods:
| Name | Address |
Akij Footwear Ltd. |
Corporate Office: Factory: |
Bay Footwear Ltd. |
Abosor Bhaban(2nd floor) 7-13 Satmosjid Road Dhaka-1209 Bangladesh. |
Crescent Leather Products Ltd. |
143, Hazaribagh,Dhaka-1209, Bangladesh. |
Fortuna Leather Craft Ltd. |
169,North Gulshan Avenue, Gulshan 2 -Dhaka 1212 Bangladesh |
Jennis Shoes Ltd. |
Corporate Office: Factory: |
Lalmai Footwear Ltd. |
Corporate Office: 107, Motijheel C/A Dhaka-1000, Bangladesh. Factory: Dhanpur, Baluarchar, Comila. |
Landmark Footwear Ltd. |
Corporate Office: Factory: |
Leatherex Footwear Industries Limited |
Corporate Office: House# 34/A (GF), Road# 10/A, Dhanmondi R/A, Dhaka 1205, Bangladesh Factory: |
Legacy Footwear Ltd. |
Corporate Office: Factory: |
3.3 Joint Venture (JV)/Foreign Direct Investment (FDI):
| Name | Address |
Apex-Adelchi Footwear Limited(JV with Italy) |
Corporate Office: Factory: |
Bata Shoe Company (BD) Ltd. |
Tongi I/A, Tongi, Gazipur, Bangladesh Tannery Unit: |
BBJ Leather Goods Ltd.(JV with Japan) |
House # 50/1 (1st Floor), Road # 11/A, Dhanmondi, Dhaka-1209, Bangladesh. T: (880-2) 8157959, 8159966. F: (880-2) 8158987, 8126530. E: zad@bol-online.com abedin_bbjabc@yahoo.com W: www.bbjabc.com |
Golden Moon (Bangladesh) Ltd |
(FDI, CALZATURIFICIO CARMENS S.P.A.; Italy) Comilla Export Processing Zone (CEPZ) Comilla, Bangladesh. |
Paolo Footwear (BD) Ltd.(FDI, Taiwan) |
Plot No. 6-8, & 27-29, Karnaphuli EPZ, Patenga, Chittagong-4204. Bangladesh. T: + 880 312503890 F: + 880 312503890 E: apache@paolo-intl.com belayet@paolo-intl.com |
PICARD Bangladesh Ltd.(JV with PICARD Lederwaren Gmbh Co. & KG, Germany) |
Corporate Office: Factory: |
Pou Hung Industrial (Bangladesh) Ltd. (FDI, Pou Chen Group, Taiwan) |
Plot Number-20-36, Sector-1, Karnafuli-EPZ, Chittagong, Bangladesh. T: +88-031-2501446-50 C: +8801675232133 E: george.tan@bdpouhung.com |
Cosmos Shoes International Limited(FDI, Italy) |
S S 2, West Side, Chittagong EPZ, Chittagong Bangladesh. T: +88-031-740765 C: 01925151228 k E: cchen@cosmosshoes.com |
YOUNGONE Sports Shoes Ind.LTD(FDI, South Korea) |
Plot :7-20 Srctor: 3 Chittagong EPZ , Chittagong Bangladesh. T: +88031740431-6, 741001-3 F: +88031740081 E: yodmktg@bdmail.net ichoi@youngone.co.kr |
3.4 Institutions:
| Name | Address |
Institute of Leather Engineering and Technology |
University of Dhaka, Bangladesh. (Former Bangladesh College of Leather Technology) T: +88 02 8617439 F: +88 02 8617439 E: bclt47@yahoo.com bclt@bol-online.com W: www.bclt.com.bd |
Leather Research Institute |
BCSIR (Ministry of Science & ICT) Nayarhat, Dhaka-1350 Baangladesh. T: +8802 7708754, 7708554 F: +8802 7708754 E: lribcsir@bangla.net |
3.5 Government Bodies:
| Name | Address |
Bangladesh Export Processing Zones Authority (BEPZA) |
BEPZA Complex, House # 19/D, Road # 6, Dhanmondi R/A, Dhaka-1205, Bangladesh. T: +880 2 9670530, 8650058, 8650061 F: +880 2 8650060, 8650063 E: member-ip@bepza.org gm-ip@bepza.org gm-pr@bepza.org W: www.epzbangladesh.org.bd |
Export Promotion Bureau (EPB) |
TCB Bhaban, 1, Kawran Bazar (2nd & 4th Floor), C/A, Dhaka 1215, Bangladesh. T: 9144821-4 F: 9119531 E: info@epb.gov.bd W: www.epb.gov.bd |
Leather Sector Business Promotion Council (LSBPC) |
(Leather wing, Ministry of Commerce.) DCCI Building (9th Floor) 66, Motijheel C/A Dhaka-1000 T: +8802 9550104, 9550074 F: +8802 0567149 E: lsbpc@intechworld.net |
Bangladesh Leather Service Centre (BLSC) |
44-50 Hazaribagh, Dhaka-1209, Bangladesh T: +8802 9670558, 8621121 F: +8802 8613398 C:+8801711524480 E: atfleather@dhaka.net |
3.6 Associations:
| Name | Address |
Bangladesh Finished Leather Leathergoods and Footwear Exporters Association |
(BFLLFEA) House # 32/A, Road # 2, Dhanmondi R/A, Dhaka-1205. Bangladesh. T: +8802 8622167-8, F: +8802 8622167, E: bfllfea@yahoo.com |
Bangladesh Tanners Association (BTA) |
99, Hazaribagh, DHAKA – 1209 T: +88 2 8626878 – F: +88 2 8628508 E: leather.info@gmail.com |
Leather Engineers & Technologists’ Society, Bangladesh |
Kohinoor Tannery Building 130, Hazaribagh T/A Dhaka-1209. Bangladesh. T: +8801715438536 E: fknoon@dhaka.net |
Leathergoods & Footwear Manufacturers & Exporters Association of Bangladesh (LFMEB) |
Erectors House, 18, Kemal Ataturk Avenue, (9th Floor) Banani C/A, Dhaka-1213 Bangladesh T: +880-2-8836901-2 F: 880-2-9898600 E: lfmeab60@gmail.com W: www.lfmeab.org |
Conclusion:
Notwithstanding, having great threats, limitations and lacking; Bangladesh Leather Sector is still doing well. Most importantly, it did never experience negative growth since its inception. However, if some selective barriers like dependency on imported chemicals and accessories, land and transportation problems are to be removed or reduced, Bangladesh Leather Sector can be treated as a lucrative sector in the South-East Asian zone. Mr. City Huang, the president of Paolo Footwear Ltd told a local news paper “If Bangladesh can resolve the land and transportation problems, it will fill with Chinese and Taiwanese companies.”
Firoj Khan Nun
Leather Technologist
+8801713044780
fknoon@gmail.com
Source:
o “Value Chain assessment of the Leather Sector in Bangladesh” 4, 6, 29, 32-34, 36
Published by PROGRESS (A joint program of the Bangladesh Ministry of Commerce and the German Federal Ministry Cooperation and Development) and GTZ, April 2006. progress@gtz.de
o Baseline Survey : Bangladesh Leather Service Centre (BLSC), March, 2009
o The Daily Star, April 22, 2010; www.thedailystar.net
o Leather International, June, 2011 www.leathermag.com
o BEPZA (Bangladesh Export Processing Zone Authority), www.epzbangladesh.org.bd
o EPB (Export Promotion Bureau), www.epb.gov.bd
o Board of Investment, www.boi.gov.bd
o International Trade Centre (ITC), (www.intracen.org), Dhaka Office
o BFLLFEA (Bangladesh Finished Leather and Leathergoods & Footwear Exporters Association)
o BTA (Bangladesh Tanners Association)