Leather exporters feel the pinch

DHAKA : The relocation process of Hazaribagh tanneries to Savar Tannery Estate has cast a severe adverse impact on the country’s leather export over the last couple of years, claimed tanners, reports UNB.
The leather export (except leather products and leather footwear) saw a 21 percent negative growth in the 2014-15 fiscal year and 30 percent negative growth during 2015-16 period, according to Bangladesh Export Promotion Bureau (EPB) statistics.
However, the adverse impacts on export of leather products and leather footwear are yet to be visible as there are still positive growths in the two sub-sectors.
Bangladesh exported leather worth of US$ 201 million with a 4.79 percent negative growth in the first nine months of 2016-17 fiscal year, which was US$ 211 million during the same period of 2015-16 as per the EPB statistics.
The leather export volume was US$ 505.54 million (26.47pc positive growth) in 2013-14 fiscal, which came down to US$ 397.54 million (with 21.36pc negative growth) in 2014-15 fiscal and US$ 277.90 million (30.10pc negative growth) in 2015-16 fiscal.
Chairman of Bangladesh Tanners Association (BTA) Shaheen Ahmed said the export of leather drastically fell in the last couple of fiscal years following the announcement of the relocation process of tanneries to Savar.
Many foreign buyers have gone to alternative places fearing that Bangladeshi tanners will not able to provide leather amid the relocation process, he said.
“The negative impact on leather export will be more visible this month as we fear cancellation of export orders of Tk 1,200 crore in the sector with the recent shutdown of Hazaribagh tanneries,” he said.
The leather export marked a sharp fall as the announcement of stopping rawhide supply to Hazarbagh came just before the Hong Kong Leather Fair 2016 and the utility services to Hazaribagh tanneries were snapped at a time when the Hong Kong Fair 2017 started, he said.
“We used to get purchase orders worth Tk 5,000-Tk 6,000 crore in Hong Kong fair. But, this time we lost many purchase orders.”
Besides, the overall export of leather, leather products and leather footwear had been able to gain nominal growth rate in recent fiscal years.
The export volume of the entire leather sector was US$ 1124.17 million in 2013-14 fiscal, which was US$ 1130.51 million in 2014-15 fiscal and US$ 1160.95 million in 2015-16 fiscal.
In the first nine months of the current fiscal year, the volume was US$ 922.96 million (8.41pc positive growth), which was higher than US$ 851.33 million export of the same period of the previous fiscal year.
Meanwhile, the export volume of leather products and leather footwear were US$ 249.16 million and US$ 483.81 million respectively in 2014-15 fiscal year, which went up to US$ 388.22 million and US$ 494.83 million during 2015-16.
In the first nine months of the current fiscal, leather products worth US$ 321.41 million were exported, which was 12.33pc higher than US$ 286.14 million of the corresponding period of the previous fiscal year.
The first nine months of the current fiscal year saw the export of leather footwear worth US$ 400.50 million, posting a 13.13pc growth.
About the positive growth in export of leather products and leather footwear, the BTA chairman said it will take more time to see visible impact caused by tannery relocation on the exports of the two sub-sectors.
In compliance with a High Court order, the Department of Environment (DoE) on April 8 last disconnected utility services to 224 tanneries at Hazaribagh as they missed several deadlines to relocate their factories to the Savar Tannery Estate.
The government initially took the three-year project in 2003 to set up the Tannery Estate at a 200-acre land to relocate some 200 tanneries from Hazaribagh considering health and environmental hazards.