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The Financial Express

Stakeholders seek incentives for leathergoods companies

Corporatisation of ports a must to ensure efficiency



Md Saiful Islam, President of LFMEAB addressing the meeting held between BUILD (Business Initiative Leading Development and LFMEAB (Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh) at LFMEAB office in the city. Md Saiful Islam, President of LFMEAB addressing the meeting held between BUILD (Business Initiative Leading Development and LFMEAB (Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh) at LFMEAB office in the city.

Stakeholders in a meeting Monday sought incentives for leather goods to expand country's export-base.

The meeting was held between BUILD (Business Initiative Leading Development and LFMEAB (Leathergoods and Footwear Manufacturers & Exporters Association of Bangladesh) at LFMEAB office in the city, said a statement.

Referring to the Rana Plaza incident, Md Saiful Islam, President of LFMEAB said that duty exemption on life and fire saving accessories for RMG and non-traditional sectors like leather was a political decision but other sectors do not enjoy this duty exemption incentive.

"Export Development Fund (EDF) is one of the good incentives for exporters but for the non-traditional sector like leather, the allocation limit is lesser than RMG," he said.

Stressing the need for changing mindset of field officers for encouraging non-traditional sectors, he put thrust on policy reforms for the leather sector in order to hit $5.0 billion export target. He also requested the field officials of Customs and independent audit agencies to assess the CETP performance in Savar.

Tax on royalties should be reduced to make non-traditional exports competitive, he added.

The authorities have failed to meet its own deadlines to complete the work of various infrastructural facilities, including the Central Effluent Treatment Plant (CETP) and is yet to provide utility services, including gas and electricity connections, as per the requirements, he added.

Central Bonded Warehouse can be established for whom who are unable to afford the bond individually and in this regard, he suggested to introduce a passbook system for simplifying sample import.

Tax deduction at source on reimbursement of technical know-how should be 15 per cent instead of 25 per cent. The policy exercise in field level is not aligned with the political wills.This gap needs to be addressed, he added.

To increase efficiency and ensure corporatisation of the port, the port handling authority needs to be privatised keeping the security aspects under control of the Government and responsibility should be given to the authority who have internationally excellent track record in port handling. It would increase the efficiency of the port, decrease lead time of import and export, diversified export sector would be competitive and targeted revenue growth would be ascertained,he added.

He also stressed on establishing a leather and leather product village adjacent to the Savar tannery estate with all utilities and facilities in a view to ensure economies of scale over the whole production process of leather industries.

BUILD has been assigned to support BICF II  for organising structured Public-Private Dialogue for  policy advocacy for reforms through conducting research on specific issues which is a part of Export Competitiveness for Jobs (EC4J) project.

As part of this, BUILD has undertaken a number of initiatives to help some major sectors expand in the export basket. BUILD shared its policy framework for policy advocacy with LFMEAB to help the leather sector grow in the country at the meeting.

BUILD CEO Ferdaus Ara Begum made a presentation focusing on the key constraints the sector encounters. The key factors of the sector include environmental and social compliance, market information a branding, productivity, product quality and price competitiveness including supportive infrastructure. The presentation outlined some issues which include lack of proper Institutional support, reimbursement of technical know-how fee, tedious process of clearing investment proposals.

raihanmchowdhury@gmail.com

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