Vietnam's leading leathergoods manufacturer TBS plans to invest $100 million in Bangladesh, said Saiful Islam, president of Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB).
The company wants a 1.30 lakh to 1.50 lakh square metre space to set up a factory either in Dhaka or Chittagong to produce leather footwear and footwear components for overseas markets, he said.
Diep Thanh Kiet, vice chairman of Vietnam Leather, Footwear and Handbag Association, and Islam signed an agreement in this regard in the office of LFMEAB in Dhaka yesterday.
The papers of the agreement will be exchanged in front of Vietnamese President Tran Dai Quang at the Bangladesh Vietnam Business Forum to be held in a hotel in Dhaka today.
TBS is one of the top five leathergoods manufactures in Vietnam and the company's annual export value touches $500 million, Islam said. “The proposed investment will create 10,000 new jobs in Bangladesh.”
Bangladesh's business-friendly environment, workforce at competitive wage, available raw materials and the duty privilege the country enjoys have encouraged the Vietnamese company to invest here, Islam said.
“The rising leather and leathergoods sector of Bangladesh will not be affected due to the foreign investment. Rather our sector will be benefited from such investment as they will create jobs and bring new technologies.”
The LFMEAB will give technical assistance to TBS to form the company, he said.
Currently, Bangladesh has 3,000 tanneries and leather and leathergoods factories which employ over two lakh workers. Export of leather and leathergoods fell 4.61 percent year-on-year to $709.51 million in the first seven months of the current fiscal year, which 9.79 percent less than the periodic target, according to data from the Export Promotion Bureau.
The sector's export target for this fiscal year is $1.38 billion, up from the previous year's receipts of $1.23 billion.
Trade between Vietnam and Bangladesh is heavily tilted towards Vietnam.
In 2016-17, Bangladesh imported goods worth $417 million to Vietnam while the export figure touched only $66.44 million, according to data from the Federation of Bangladesh Chambers of Commerce and Industry.