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That the country earns only $1.7 billion from leather and footwear export appears rather intriguing to many. While there were forecasts terming the sector of leather and leather goods the next growth driver, and some efforts were also underway to translate the potential into reality, it is yet to meet the projected objective. There were lengthy narratives on finding the right course of action in order to energise the sector. It seemed alright so far as the dos and don'ts were pointed out, but the problem remained with the initiatives taken not in an organised and systematic manner.
In the recently held Bangladesh Leather Footwear & Leather goods International Sourcing Show (BLISS-2023), foreign and local speakers deliberated on the subject at some length. Though most of the issues were pretty well known to the sector insiders as well as those interested in the country's leather industry, repeating those was a strong reminder to get to business if the industry meant to ride out its current bottlenecks. Discussions were held mostly on how to access the global chain with procurement protocols getting stiffer than ever before. The discussions took place in a session titled 'Linking Bangladesh to Global Value Chain'.
The key issue highlighted by the speakers at the event was corporate sustainability reporting which broadly refers to compliance with increasing global rules and regulations alongside ensuring decent workplace, human rights and labour rights. They also said exporters and manufacturers in Bangladesh need to review their strengths and weaknesses to find out why, despite the potential, the country's leather and footwear export is languishing. They emphasised on global compliance as an essential prerequisite to get integrated into the global value chain, and urged fellow manufacturers and exporters to review their limitations and work on target-oriented markets. Besides local industry leaders, speakers at the event represented Sustainable Leather Foundation (SLF), GTZ, and a few other renowned international entities.
At the meeting some industry leaders sounded upbeat in view of some progress in sourcing finished raw-materials, especially for footwear. But achieving a substantial growth from where the industry stands now seems rather too ambitious.
However, the prospect of the industry to thrive up to the expectation has never been far from sight. Since low wage compared to most leather manufacturing countries is an alluring factor, chances of relocation of leather factories from other countries-China to be precise-seemed to be around the corner some time ago. Besides relocation of factories producing low-end products, foreign investment in a big way seemed likely, given what is often drummed up as the country's investment-friendly climate. Unfortunately, speculation did not help as nothing actually happened to revamp the sector.
There is no denying the fact that the country's leather sector is the victim of a lack of timely moves in the right direction. Absence of time-bound action plan in respect of facilitations such as central effluent treatment plan (CETP), fiscal restructuring, compliance conformity, value addition etc are some of the core issues that have been hindering the industry's smooth operations, particularly in exports. All that the government did was relocation of the tannery hub to Savar, but has there been any noticeable improvement in terms of fulfilling compliance norms?
Given that export is the sole motivation of the age-old industry, any move or policy must address barriers affecting exports--- be that in terms of physical infrastructure of the leather estate, environmental concern from pollution, compliance norms of the importing countries, testing, fiscal measures etc. Over the years, there were moves, rather like damage-control measure instead of the pro-active with an eye for the market trend, which did not bring any significant improvement to energise the industry.
Bangladesh's current share in the $215 billion global leather and leather goods market is only 0.5 per cent. This, industry experts hold, is appallingly short of the country's actual potential. Keeping this in view, industry leaders have been suggesting for time-bound policy support to complement the 'Leather and Leather Goods Development Policy 2019'.
While addressing the compliance norms, the major hurdle that has rendered the country's leather industry out of pace is obviously the nonfunctional Central Effluent Plant (CETP) at the Savar leather industrial estate. CETP continues to be a stumbling block on way to export. The Leather Working Group (LWG) certification is now a precondition for accessing global market but it cannot be obtained without a functional CETP, solid waste management and chrome recovery units in the tannery estate. So much has been said on this issue for years but no noticeable move is in sight, as of now. It is indeed intriguing that CETP being the most essential component of the leather estate, the facility could be subjected to such neglect by the authorities for years.
The country's leather industry is desperately in need of urgently organising itself better in order to meet the challenges facing it, lest the prospect still in sight disappears.