The leather Industry has been ranked as fourth emerging sector in terms of earning foreign currencies in Bangladesh with an established industrial base. Realizing its potentiality in the near future, Government of Bangladesh has declared it as one of the booming sectors of the country. Not only of its financial benefits, this sector is generating social benefits like employment generation, skilled labor development as well as fulfilling the local demand of leather and leather based products.
Although countries like Italy, China, USA, France are the top players in the global leather exporting market but as stated before Bangladesh is in the list of emerging players in the leather exporting due to its economic advantages. The leather sector has become potential absorbent in the market because of its high qualities of fine grain, uniform fiber structure, smooth feel and natural texture. Raw materials of this sector is assessed to be around 750 million sq. feet according to a report of LFMEAB. Currently, 220 tanneries, 2500 footwear manufacturing units and 90 large firms are involved in the leather and leather goods sector. This sector is contributing four percent to the country’s total export earnings by exporting items to more than 50 countries.
|List of Trade bodies
|Bangladesh Tanners Association- BTA
|Bangladesh Finished Leather and Leather Goods and Footwear Exporters Association- BFLLFEA
|The Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh- LFMEAB
With an average compound annual growth rate (CAGR) of 16% for last few years and export over 1.15 billion in last year, Bangladesh’s Leather sector is enjoying its expansion in the global market due to labor cost hike in the major leather product producer’s countries thus relocating the global importers to cheap labor countries like Bangladesh. For the past three years, the four main countries importing raw hides and skins and leather from Bangladesh have been Hong Kong, China, Italy and Korea. Other major buyers include Taiwan, Japan, Vietnam and Spain. The two most significant types of leather being exported from Bangladesh are cow (60 per cent) and goat (10 per cent) skin leather.
Bangladesh is offering exciting investment opportunities under its liberalized industrial policy, export-oriented products and new specialized economic zones which attracting interest of international investors towards the country.
Analyzing the future prospect of this industry government of Bangladesh has taken positive measures and formulated new policy which complies with progress of the sectors. With a view to decentralizing the development of the sector government has started initiatives of setting up two exclusive leather industrial estates in Chittagong division & Rajshahi division. Besides special value addition has been made to attract the manufactures. Some of them are-
- Tax rebate
- 100 per cent export performance license
- Cash assistance for exporting finished leather goods from leather industry parks
- Establishment of testing & Calibrating center
The world market of leather and leather products are gigantic and as an emerging and independent player, Bangladesh is gradually entering the market with lots of potentially. Leather sector was in the top 3 sectors (currently 4) after the liberation war of 1971. Thus Bangladesh has already developed some expertise in manufacturing leather goods. The prolific attempts of government also helping the investors and employees to earn a sustainable income from the sector too. With proper maintenance of compliance and sufficient training programs, the industry is expected to reach the peak and become one of the global leaders.
There are 3 subsectors under the leather sector:
i) Leather Tanning ii) Leather Footwear iii)Leather Goods;
- 90% of basic raw materials i.e. hides are locally available. About 220m sft. Of high grain leather produced locally;
- Due to availability of cheap labor, this sector has good scope of value addition with minimal cost;
- Out of total leather exports, 50% of the total leather are exported in semi-finished and finished state.
- Due to available man force and lower wage structure, this market is capable enough to compete in the global market currently which is only less than 1% globally.