$10b leather export possible by 2025

Bangladesh has the potential to earn as much as $10 billion from leather and leather goods exports by 2025 if the country can improve compliance, protect labour rights and obtain international certification within a short time, said an economist yesterday.

The government has a target to export $5 billion worth of leather and leather goods by 2021 whereas last year’s receipts amounted to $1.2 billion.

“However, it is possible to export leather and leather goods to the tune of $10 billion by 2025 as we have a lot of comparative advantages,” said M Abu Eusuf, professor of the Department of Development Studies at the University of Dhaka.

Vietnam could export $20 billion worth of leather and leather goods, he said at a dialogue on the prospects and challenges in the tannery sector organised by Asia Foundation at The Daily Star Centre in Dhaka.

Sadat S Shibli, director for programme at Asia Foundation, moderated the dialogue, which was attended by tanners, labour leaders, experts and leather goods exporters.

Prof Eusuf suggested learning from the garment sector as Bangladesh has the highest number of green apparel manufacturing units.

“The garment sector could earn more than $34 billion from exports. Then why can’t the leather and leather goods industry do the same?”

The tanneries should produce goods at eco-friendly factories and obtain the Leather Working Group (LWG) certification, which is a must for better prices, he said.

Because of poor compliance and working conditions in the leather sector as well as a lack of the LWG certification, Bangladeshi tanners have to sell tanned leather at 40 percent below international rates.

However, the authority of the newly established Savar Tannery Industrial Estate (STIE) under the Bangladesh Small and Cottage Industries Corporation (BSCIC) is moving very slowly with regards to improving compliance.

“Safety, health and transport facility for the workers are needed. We need to turn it into a social business from the business-only model. Different kinds of facilities should be adopted for this business,” Prof Eusuf said.

He suggested setting up cold storages in different parts of the country so that rawhides can be preserved there for a long time, in a bid to ensure fair prices. Non-compliant companies should be made compliant.

Md Shaheen Ahmed, chairman of Bangladesh Tanners Association, said the Chinese contractor installed substandard machinery at the Central Effluent Treatment Plant (CETP) at the STIE. The CETP will not work fully if the substandard machinery is not replaced, he said.

He said a section of corrupt people installed the substandard machinery. For instance, the contractor was supposed to put in place 38-inch diameter pipes, but the corrupt people have installed 18-inch diameter pipes. This is one example of corruption in the construction of the CETP, he said, adding that there are many other instances of graft.

Ahmed said as per conditions of the tender, the Chinese contractor was supposed to install Swiss turbine and European pumps at the CETP. Instead, low quality Chinese turbines and pumps were used.

He said tanners use between 45,000 litres and 50,000 litres of water to wash a tonne of rawhides but international standard is 25,000 litres.

“If tanners can wash them maintaining international standard, the CETP will not have to bear the overflow of waste water.”

The CETP can treat 25,000 cubic metres of water per day but during peak seasons tanneries discharge between 36,000 and 38,000 cubic metres of water a day, which is beyond the capacity of the plant, said Mir Mohammad Shahinul Islam, a representative of the BSCIC.

Kamruzzaman Majumder, an environment expert, asked whether the tanners are polluting the environment in the name of building a thriving industry as this sector has little contribution to the economy.

The contribution of the leather sector is 0.35 percent to the gross domestic product and 3.54 percent to the national exports, he said.

However, the five rivers that surround Dhaka are almost dead now because of the dumping of untreated chemical effluents into them, and they are placed among the top 10 polluted rivers in the world, he said.