The country’s leather sector has made a turnaround from the last few years’ export downtrend despite the corona pandemic mainly thanks to a rebound in global demand after vaccination in Europe.
Reversing the declining trend in the last few years, leather and leather goods exports rose to nearly $9.42 billion in FY 21, surpassing even the annual target, latest Export Promotion Bureau (EPB) data showed.In the immediate past fiscal year, the leather sector’s export performance was $216.7 million higher than the $9.20 billion yearly export target, and it was $1.45 billion higher than the previous fiscal’s $7.98 billion export earnings.
“Demand for leather has increased in European countries and for the last six months, leather exports witnessed a huge rush,” Md Shakawat Ullah, general secretary of Bangladesh Tanners Association (BTA), said.
The industry insiders think that the modernisation of export-oriented leather industries in line with environmental compliance to meet growing demand in the international market may have contributed to increased exports.
In 2014-15 fiscal year, Bangladesh earned $1.13 billion from exporting leather and leather goods, which gradually rose to $1.16 billion and $1.23 billion during the following two fiscal years.
But the leather and leather goods exports slumped to $1.09 billion in 2017-18 fiscal year and $1.01 billion in 2018-19 fiscal year because of delayed implementation of CETP and lack of infrastructure at the relocated tanneries in Savar.
In absence of full-fledged operation of the central effluent treatment plant (CETP) at Savar Leather Industrial Park left Bangladesh environmentally non-compliant.Certification of Leather Working Group (LWG), which makes selling goods to global buyers easier, is hard to come by for local tanners and exporters because of environmental non-compliance.
Leather exports saw a setback in the last few years, he said, adding that exports will rise further once the environmental issues are resolved. He also hoped that once LWG certification is available the exports will grow more.
“Leather goods export saw a sharp rise after European countries started Covid-19 vaccination and the export orders almost returned to the pre-Covid level. Banks are also giving loans,” Md Saiful Islam, managing director of PICARD Bangladesh Ltd observed.
Once the effluent treatment problem is overcome, leather and leather goods export will rise manifolds from the country and it will be a major source of exports, he expected.
Alongside huge rush to the European market, export is increasing in China as well, some exporters said, adding that they are not making loss now.
Tanners shifted to Savar informed that effluent treatment has improved after the construction of CETP and renovation of the drainage system at the newly established industrial park.
Some 132 Out of 154 tanners who got land allotment there have already started their activities after the relocation of tanneries and the rest will start soon.
Tanners said the industrial park saw a lot of improvement in the last one year, while they are getting bank loans, which has a large contribution to rebound in leather and leather goods export.