Tanners have finally agreed to pay arrears to the rawhide merchants but in three phases with the view to resolving the crisis in the leather industry.
The information was shared in a tripartite meeting brokered by the Federation of Bangladesh Chambers of Commerce and Industry yesterday.
Leaders from different trade bodies, business chambers, rawhide merchants, tanners and government higher ups from the ministries of industries and commerce attended the meeting at the FBCCI office in Dhaka.
In an emergency meeting at the commerce ministry earlier on Sunday, Industries Minister Nurul Majid Mahmud Humayun tasked the FBCCI to mediate the dispute of non-payment of more than Tk 400 crore to the rawhide merchants by tanners.
Both the tanners and merchants will hold two more separate meetings before holding another tripartite meeting with the FBCCI on August 31.
The government took the hurried initiative to resolve the non-payment issue when reports were surfacing in media that nearly 35 percent of more than 1 crore units of rawhides were being thrown away by the seasonal small traders and farmers in the absence of buyers.
A huge number of rawhides worth nearly Tk 100 crore were thrown away as the merchants did not have the capital to purchase them from seasonal small traders because the tanners did not pay the previous dues before Eid.
FBCCI President Sheikh Fazle Fahim said the payment of arrears will take place in three tranches: from 1990 to 2010, 2010 and 2015, and 2015 to 2019.
The tanners and rawhide merchants have been calculating the exact amount of arrears now. However, both the rawhide merchants and tanners said that the amount is nearly Tk 400 crore so far.
Asked whether Delwar Hossain, president of the Bangladesh Hide and Skin Merchants’ Association, was satisfied with the FBCCI brokered meeting or not, he answered in the affirmative.
However, he urged the tanners to pay the arrears of 2015 to 2019 first.
“We are still working on the final calculation of arrears between 1990 and 2010.”
Regarding the last spell of rawhide crisis, Hosain said: “Even on the last banking hour before the Eid, the tanners assured us that they will pay the arrears. But they did not and the damage has been done.”
He went on to oppose rawhide exports for the sake of domestic leather industries.
At the press conference, Md Shaheen Ahmed, president of the Bangladesh Tanners Association, demanded fresh loans from banks to pay arrears.
“At the first meeting, we have also discussed about the leather policy by the industries ministry and the commerce ministry. The government is scheduled to take the draft leather policy to the next cabinet meeting,” Fahim said.
Although the tanners have purchased the land at the newly established Savar Tannery Industrial Estate, they cannot use the land deeds as the collateral for receiving loan from banks due to some problems.
The industries ministry needs to formulate a guideline for the tannery industry’s land registration, Fahim said.
“I hope we will get a permanent solution in the proposed leather policy.”