Govt has think of a solution to the hurdle to higher leather exports
Image collected
The government allows construction of effluent treatment plants (ETPs) by individual tanneries inside the Savar Tannery Industrial Estate (STIE) in a bid to expedite the process of obtaining much-needed qualification from the Leather Working Group (LWG) to improve export of leather goods.
Exporters now face delays in getting LWG certificates as Bangladesh Small and Cottage Industries Corporation (BSCIC), the authority of the estate, cannot complete construction of a central ETP at the website despite going for a project in 2012.
The groundwork for the CETP started in 2014 and it had been said to be completed by 2017.
The UK-based LWG comprises of member brands, retailers, product and leather manufacturers, chemical and machinery suppliers, technical professionals and other companies that work together to keep up environmental stewardship protocols particularly for the leather manufacturing industry.
Obtaining recognition from the group is a prerequisite for any country to sell leather and leather goods at international rates.
As European and American buyers do not buy goods from non-compliant factories in Bangladesh that are yet to be certified by the LWG, exporters sell tanned leather to some Chinese companies at rates 40 % less than those prevailing in the international markets.
The Chinese importers reprocess those goods according to international standards.
The construction of the CETP has been delayed for many reasons, just like the change of project directors for many times over the years, fund crisis, legal dilemmas, bureaucratic tangles and delays due to Chinese engineers.
Up to now, Tk 879 crore has been allocated to the CETP, said Jitendra Nath Paul, project director of the STIE.
"I hope this time around we will be in a position to build the CETP as the construction of the primary part is complete."
Work for two waste dumping stores is certainly going on, which is likely to be complete over another two months.
"We will be ready to dominate the CETP from the construction company by December."
After the CETP is ready, the authorities will make an application for LWG certification so that Bangladeshi companies can export more and progress charges for their leather and leather goods, Paul told The Daily Star over the telephone.
"We are preparing to let individual tanneries build their own ETPs in the estate," said Md Jafar Uddin, commerce secretary.
The LWG certificate will help Bangladesh grab a bigger share of the international market and ensure better prices for locally produced goods, he said.
The federal government has taken some programmes to increase export, add more value and create jobs in the leather and leather goods industries, which may be the second-highest export earning sector after apparel, he said.
The leather and leather goods industries generate fully value-added products and a lot of the raw materials are supplied by residents, he said.
"We are working to attain the target of exporting $5 billion worth of leather and leather goods by 2024," Uddin said.
Last month, the federal government took a project titled Export Competitiveness for Creating Jobs with the view to producing skilled manpower, he said.
The local manufacturers may also be in a position to hire skilled persons to be trained through this project, he said, adding that the project will help diversify markets and products.
"I assume that the export target of $5 billion is achievable as the major markets like the EU and the united states would be opened up once we have the LWG certification," Uddin said.
Currently, the neighborhood leather and leather goods exporters receive 15 per cent cash incentive on their export receipts.
Since, Bangladesh is a significant producer of rawhide, the manufacturers and exporters of leather and leather goods should be able to get the raw materials easily, which can only help in reducing the lead time, he said. "That is a major advantage for Bangladesh."
Many internationally reputed brands usually do not show interest in sourcing leather and leather goods from Bangladesh only as a result of the lack of the LWG certification, said Saiful Islam, president of the Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh.
"So, obtaining LWG recognition is important for the country. It can help create more demand for locally made leather and leather goods, which, subsequently, will improve the demand for rawhides in the country."
The demand for leather and leather goods is low now weighed against the pre-pandemic times as persons consider these goods as luxury items, Islam said.
If Bangladesh obtains the LWG documentation and the government formulates proper policies, the sector can reach the $5 billion export target in the stipulated time.
Currently, three local leather and leather goods manufacturing companies have the LWG certification and they are doing good business with their international trading partners.
More companies have to obtain the certification, Islam added.
Monitoring would be very hard if the federal government allows the construction of the ETPs by individual companies as there are 155 tanneries inside STIE, said Md Shaheen Ahmed, president of the Bangladesh Tanners Association.
Up to now, two companies applied to BSCIC for obtaining permission to create the average person ETPs, he said.
About 155 tanneries have invested Tk 7,000 crore inside the estate, employing nearly 50,000 people.
In the united states, the leather, leather goods and leather footwear industries have invested $1 billion in upwards of 1,200 factories, where several lakh people work.
Of the total professional units, 200 are engaged in export.
The leather, leather goods and leather footwear may be the only sector after apparel that is fetching over $1 billion from export annually since fiscal 2011-12 save for last fiscal year.
In fiscal 2019-20, export earnings from leather and leather goods fell 21.79 per cent year-on-year to $797.6 million, according to data from the Export Promotion Bureau.
Source: https://www.thedailystar.net
Tags :
Previous Story
- Industries Ministry seeks Tk1,100cr seed money for small...
- BSCIC industry owners seek special consideration
- More government support sought for SME sector
- Palak: Digital financial inclusion key to building digital...
- Foreign company has left the country
- Jessore light engineering sector growing with exports to...
- Regional SME fair begins in Gaibandha on Thursday
- Discount offers draw crowd