Leather and leather good exporters are gung-ho about hitting $5 billion in export receipts by 2022 if the government manages the Leather Working Group’s certification at the earliest, according to industry insiders.
Last fiscal year, leather and leather good exports fetched $1.19 billion, making it the second highest export earner for Bangladesh after garment, according to data from the Export Promotion Bureau.
Getting the LWG certification means the manufacturers comply with the global compliance standards. And to obtain that, the central effluent treatment plant (CETP) at the Savar Tannery Industrial Estate (STIE) must be fully operational.
“Once we obtain the LWG certification, nobody will ask about the quality of our products as everything would be produced following the international standards of compliance,” said Saiful Islam, president of the Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh (LFMEAB).
In the absence of the certificate, Bangladeshi leather and leather good exporters have to make do with sending their products to China, where the prices are 40 percent lower than elsewhere, and are essentially shut out from upmarket destinations like the EU and the US.
Recently, many American brands have expressed interest in shifting to Bangladesh as their sourcing destination for the US-China tariff war.
“And we are also capable of supplying quality goods to the retailers at competitive prices. So, that certification is very important for us.”
Islam’s comments came at the conclusion of the third Bangladesh Leather Footwear & Leathergoods International Sourcing Show (BLISS) yesterday at the International Convention City, Bashundhara in Dhaka.
“We have received a lot of response from our international traders during the show,” he said, adding that foreign factories are also relocating to Bangladesh.
For instance, recently four Indian leather good and shoe manufacturers came to Bangladesh and invested $10 million. Similarly, another leather and leather goods manufacturing company came from Taiwan recently.
“Now we need to complete the construction of the CETP as soon as possible for obtaining the LWG certification,” said Islam, who is also the managing director of Picard Bangladesh.
Echoing the views of Islam, Ziaur Rahman, managing director of Bay, a local leather and shoe manufacturer and exporter, said he received very positive response from the international retailers at the exhibition.
“We need to improve the lead time significantly cutting different barriers in trade to grab more of the international market,” said Rahman, who annually exports more than $80 million worth of leather and leather goods and has a 15 percent year-on-year growth.
Interestingly, a lot of fresh and young entrepreneurs are coming to the sector as the country is poised to become a hotspot for leather and leather goods just that way it has been for apparel, he added.
At present, the number of leather goods exporters listed with the association is 180, up from less than 100 even a few years ago.
Apart from the registered members of the association, there are many micro and small investors who are serving both the domestic and international markets, he added.
Maksudur Rahman, marketing manager of Salma Tannery, said a lot of the buyers from China, India, Pakistan, Portugal and Korea visited his stall during the fair that began from October 31.
Many of his Korean buyers of tanned leather re-export the goods to the US, Germany and Spain, he said.
He also urged the government for completion of the construction of the CETP as soon as possible for ensuring proper pricing of leather and leather goods.
Bangladesh produces nearly 400 million square feet of rawhide, of which the local leather and footwear companies consume 30 million square feet.
Some leather goods and footwear companies import 20 lakh square feet of high-quality leather to make exportable goods, according to industry insiders.