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FGD on Sustainable Export Growth in Post LDC Era: Strategies for the Leather Sector
Leather sector, the second-highest export earner after RMG is potential for value addition, employment generation and sustainable industrial growth particularly in the post-LDC era when preferential trade benefits may gradually phase out. However, Bangladesh lags behind in the global market, contributing less than 1% to the global leather industry, commented Taskeen Ahmed, President of Dhaka Chamber of Commerce & Industry (DCCI) at a seminar on “Sustainable Export Growth in Post LDC Era: Strategies for the Leather Sector” held on 25 May, 2025 at DCCI.
To ensure a sustainable export growth in post-LDC era, he recommended for green transformation of tanneries, skills development, improved value chain, strong backward linkage, exploring new export destinations and public-private collaboration with a view to make this sector a pillar of country’s sustainable export item.
Speaking as the chief guest Adilur Rahman Khan, Adviser, Ministry of Industries said that international certification is crucial for the competitiveness of the leather sector as the buyers offer lower price to the exporters lacking environmental certification. At present we have only three Leather Working Group (LWG) certified tanneries in Bangladesh. Recognizing these realities, the Ministry of Industries is working to create a supportive policy environment that can enable long-term transformation, he said. He said Bangladesh’s leather industry must move beyond competing on price to capture a larger share of the USD420 billion global leather goods market. Regarding capacity building of CETP in Savar Tannery Park, he requested the tannery owners to establish ETP by their own since government now allows it. He said government will play a catalytic role by creating a broad ecosystem along with the industry players, private investors and development partners. Later, he urged the tannery owners to be more careful about the climate, environment and rivers because end of the day we have to save our environment.
Md. Hafizur Rahman, Administrator of FBCCI said that image crisis is an issue in attracting FDI in the leather sector. Inbound foreign investment is low due to lack of LWG certification as a result entrepreneurs are being deprived of getting good prices for their products. He also expressed his thought in favour of CETP, as it is easy to operate the cost of CETP collectively as well as it is easy to monitor single CETP. If the industry players can maintain the ESG compliance, it will be easier to get LWG certificates and it will help to attract FDI, because we have a lot of low cost raw materials here. He said Bangladesh’s leather sector and other promising export-oriented sectors should get the same treatment as the RMG is having now, and he hoped that in the next budget government will allow all to have the facility of bonded warehouses.
Md. Saiful Islam, Chairman, Bangladesh Small and Cottage Industries Corporation (BSCIC) said the issue of CETP is most important in the leather sector. He said the capacity of the CETP installed in Savar is currently 14 thousand cubic meters and the demand during the peak season is 32-35 thousand cubic meters, a technical team is working to increase the capacity of the CETP, so it can be increased up to 20-25 thousand cubic meters. He said that initially 6 institutions have been given permission to establish ETP by their own, while another 8-10 tanneries are in the process of getting approval. He urged the entrepreneurs to adhere to compliance to prevent environmental pollution. Since we have lack of LWG certified tanneries, he therefore emphasized for exploring new export destinations, product innovation and use of modern technology in the leather sector.
Syed Nasim Manzur, Managing Director, Apex Footwear Ltd. while presenting the keynote paper said it has been many years since the tanneries have been shifted from Hazaribagh to Savar, but the CETP has not been fully operationalized out of its full capacity, which is hampering the export growth. He also said that Bangladesh is not becoming competitive in the global market as we do not have any international certification like leather working group (LWG) and the products are not getting good prices, adding that the absence of compliance in the leather industry is one of the reasons. Along with the sick industry in the leather sector, those who want to exit should be given easy opportunities to come out of the industry, so that the existing entrepreneurs can get the necessary financial support. The leather industry's annual exports are hovering around USD 1.2 to1.6 billion, but with incentives and policy support like the readymade garment sector avails, it will be able to export USD 5 billion annually by 2030 and increase it to USD 10 billion by 2035. He also urged the government to help small entrepreneurs of the leather sector so that they can avail low cost financial assistance from the Climate Finance Fund. Nasim Manzur also said that the leather industry is not showing the desired level of development as it is linked under different ministries, so he insisted on bringing it under a single ministry.
Dr. Nazneen Kawshar Chowdhury, Additional Secretary, WTO Wing, Ministry of Commerce said after LDC graduation few challenges will come for all the sectors but we should not be panicked rather we should be ready well ahead so that we can grab the opportunity of being and middle income country. She urged the private sector to ensure compliance in the environment and labour sectors. She also urged the private sector to come forward with the government to increase the capacity of CETP as government alone cannot fulfill the requirement. She also said that it government’s utmost duty is to facilitate the private sector with enabling policy support. She said we need to move in a PPP model to increase the capacity to gain the ultimate goal of shared interest.
Mr. Md. Ariful Hoque, Director General (Joint Secretary), Strategic Investment (Additional Charge), Bangladesh Investment Development Authority (BIDA) said the economy of Bangladesh has the potential to double in next 15 years, in this regard, public-private joint coordination is a must. To support the domestic investors, foreign investors are also needed, he said. He also said that BIDA has come out of its traditional way of finding foreign investors and now the organization goes door to door to attract them to invest here in Bangladesh. He said Bangladesh is one of the most potential investment destinations in Southeast Asia but we need to market it with proper branding. He later informed that leather sector has been included in the recently launched heat-map by BIDA.
Mr. Md. Nurul Islam, Chief Executive Officer, Bangladesh Tanners Association (BTA) said that environmental compliance and CETP are the hindrances and because of these bottlenecks we are lagging behind. He also suggested for rain water harvesting and use of surface water as the tanneries need huge quantity of water daily. He also requested the government to facilitate the industry with common infrastructure; the entrepreneurs will do the rest.
Mr. Ibnul Wara, Managing Director, Austan Ltd. said that due to lack of supply chain management system, especially absence of backward linkage, the leather sector has to depend mostly on import. Depending on time consuming import procedures, it is difficult to comply with the buyers’ lead time. He later said that with heavy dependence on import, it is not possible to survive in the global market for a long time, moreover, we do not have LWG certificate.
Mr. Md. Nasir Khan, Managing Director, Jennys Shoes Ltd. said due to lack of supply chain and complex customs procedures export is not increasing. He also urged the government of allow value addition to leather goods like Vietnam, as a result it will be easier to achieve the target of USD 5 billion dollar export soon.
Mr. Ziaur Rahman, Managing Director, Bay Group said urged the big companies in the leather sector to come forward to set up ETP by their own capacity, while stressing on ensuring the use of CETP for small and micro entrepreneurs. He also opined that it would be difficult to attract foreign investment if the existing customs and tax management is not improved as well as he sought conducive policy support from the government.
In the open discussion, M. Abu Hurairah, former vice-president of DCCI, said despite the price of raw materials is low, in that case why the price of end or finished product is too high in the local market. He later said that producing football for international games is still untapped by the Bangladeshi entrepreneurs.
DCCI Senior Vice President Razeev H Chowdhury and Vice President Md. Salem Sulaiman were also present on the occasion.
Published on: 2025-05-25