When the leather industry was already in the doldrums, the present falling export trend coupled with coronavirus pandemic and prevailing problems of tanners has made it almost impossible for the country to attain its export target.
Considered as one of the major sources of foreign exchange earnings, the problem-ridden leather industry needs an urgent care to bring it out of the hole of uncertainty for boosting the economy during this ongoing crisis, experts said.
The leather sector has been facing huge difficulties to compete in the global market in the last couple of years, now the crisis has been compounded further due to corona epidemic, they opined.
Since shifting of the tannery industry from the city’s Hazaribagh area to Savar, the country’s leather sector has been facing serious difficulties especially for lack of a central effluent treatment plant (CETP) and water treatment plant, pushing many tanneries to enter into a risky zone, they said.
They added, many leather companies are failing to fulfil buyers’ demand, causing a constant fall in export earnings and driving the buyers away as well.
The harassment in the name of relocating industries from Hazaribagh without fixing the leather industrial village of Savar will never be helpful to make up the losses, they added.
Bangladesh is now to pay compensation for that mistake of BSCIC, they mentioned.
Exports from this sector have decreased and stalled, they said.
Traders said many buyers do not show interest to import leather from here due to prolonged shifting of the tannery industries from the city’s Hazaribagh area to Savar. Many buyers have stopped taking leather from Bangladesh due to lack of compliance in the leather industry of Bangladesh, they added.
The export earnings from this sector stood at $739.39 million during July-May in fiscal year 2019-20, which was 21.66 percent lower than that in the same period of the previous fiscal.
During the first eleven months of FY19, the figure was $943.83 million.
In the current FY 20-21, the target from this sector has been set at $1.09 billion.
The government has set an export earning target of $5 billion by 2021, which is now impossible, economists said.
Bangladesh Tanners Association (BTA) President Shaheen Khan said, the leather industry was plagued with numerous bottlenecks in 2017, and they could not make a recovery yet.
“We are still facing various problems,” he said adding that, the government should take immediate action to solve this problem to attract foreign buyers in order to woo more investment in the sector.
He said the tanneries in the leather industrial city of Savar have currently reserve leather worth around Tk 400 to Tk 500 crore.
Most tannery owners will not be able to purchase leather without ensuring special credit to them during the upcoming Eid al-Adha.
President of Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association (BFLLFEA) Mohiuddin Ahmed Mahin said in the first place the government's policy support is needed to save the industry.
Otherwise, the industry will be destroyed, he said adding that, in the current situation, the government is talking about giving incentives, but the leather industrialists are deprived of this facility.
In 2017, the owners of the leather industry had faced a serious problem due to the transfer of leather industry, he mentioned.
That is why, they could not repay the bank loans, he added.
As a result, they are now loan defaulters, he said.
Mahin said first of all, traders have to come out of loan defaults.
After that, they have to be provided bank loans so that they can buy rawhides during Eid-ul Adha, he added.
Otherwise, the situation will turn from bad to worse this year than the last year, he mentioned.
Industries Minister Nurul Majid Mahmud Humayun said tannery owners, warehouse keepers and also owners of various types of cottage, small and medium enterprises related to the leather sector should all work together to revive the leather industry by overcoming the Corona situation.
He said the government is working to ensure the proper management of leather in the upcoming Eid-ul-Azha in the light of the past experience.
To this end, he called upon the concerned stakeholders to work with an open mind on the basis of mutual cooperation.
