A sector with vast export potential

It may be surprising but true that export of leather and leather goods rank second in our export list. But it is about three and a half percent of our total export of nearly USD 40 billion; the bulk of that being garments. Admittedly, the leather sector has made a slow but gradual and steady progress in the last decade fetching USD 1.5 billion of foreign exchange now, keeping up our effort to diversify our export and reduce reliance on one sector solely.

In light of this, the PM's assurance of offering incentives to the leather sector is an appropriate policy considering the fact that this sector has been identified as a priority sector because of its vast potential. However, in this regard, there are two points that one is constrained to flag here.

Firstly, although our leather products are marketed to the USA, Europe, Australia, Japan and many other countries, we can export finished goods made out of imported leather only, since our leather factories have not qualified in the Leatherworking Group (LWG) Audits, a compliance standard accepted internationally and ascertained by this group. And this has to do with environmental compliance of the industry i.e., whether the factories in Bangladesh are conforming to the environmental standards and that the business practices do not in any way damage the environment.

Regrettably, our factories in Savar are not in full compliance of the LWG. We thought that the woes of the leather factories in Hazaribagh would be over after relocating to the new location; that has not been the case, however, primarily because of the absence of a fully functioning central effluent treatment plant in Savar. We understand that an inspection team is likely to visit us in December this year for assessing the latest state, and we would hope that all steps would be taken to satisfy the requirements of the inspection team. Incentives provided by the government may come to nothing if we fail to come up to the LWG standards.