Bangladeshi tannery owners should immediately begin relocating their units from Hazaribagh in the capital to Savar to maintain competitiveness in the international market, said a noted economist.
“Leather is now a very competitive industry globally. Bangladesh has a good track record in the leather and footwear business. But focusing on environment-friendly production is urgent,” said Véronique Salze-Lozac'h, chief economist and director of economic development at The Asia Foundation.
The US and European nations, key customers of Bangladeshi leather and leather goods, want to source products from factories that have a clean production process and safe working environment, she said in an interview with The Daily Star in Dhaka recently.
“Leather factories in Bangladesh, therefore, have to make a choice between whether they want to keep their long-term global clients by adopting environment-friendly technologies in the production or do as usual,” said Salze-Lozac'h.
The Asia Foundation, a non-profit international development organisation, is working as a facilitator between the government and private sector to complete the relocation process as soon as possible, she added.
There is a lack of proper communication between the government and the private sector on tannery relocation, said Salze-Lozac'h, who joined The Asia Foundation in 2003.
“So, we are providing a platform for constructive dialogue between the private sector and government so that the relocation process gets momentum.”
The international development organisation is also working with academicians and industry people to create a reliable database on the leather sector in Bangladesh, said Salze-Lozac'h, who is responsible for overseeing and providing technical support to programmes in 18 offices of the organisation in Asia.
“The demand for leather and leather products is increasing in the international market as the global economy is now at a recovery stage,” said the economist with a political science background.
Bangladesh can easily tap the opportunity by relocating the tanneries to Savar as it will have central effluent treatment plants and other necessary infrastructures, she added.
About 21,600 cubic metres of environmentally hazardous toxic waste, including chromium, sulphur and ammonium, are emitted daily from the tanneries, according to the Department of Environment.
“Our leather and leather goods exports may be hampered next year if we can't begin the relocation process as the European Union has already shown reservations on the issue,” Industries Minister Dilip Barua had said earlier.
Salze-Lozac'h, who also worked on regional projects on improving the business environment for the garment industry, said tannery owners should seriously consider the EU reservations.
The sector's exports in fiscal 2012-13 stood at $980.67 million, up 28.2 percent from the previous year, according to data from Export Promotion Bureau.
Based in Asia, Salze-Lozac'h provides technical assistance and leads applied research projects in emerging-market countries, working with clients such as USAID, AusAID, the World Bank, other bilateral and multilateral donors and the private sector.
Headquartered in San Francisco, The Asia Foundation works through a network of offices in 18 Asian countries and in Washington DC.
Working with public and private partners, the organisation receives funding from a diverse group of bilateral and multilateral development agencies, foundations, corporations and individuals.
Along with the leather industry, The Asia Foundation is working on information technology and bio energy sector of Bangladesh, said Salze-Lozac'h.