CAPABILITY

CAPABILITY

 
 
 

OVERVIEW

Bangladesh leather industry is well established and ranked second in terms of export earnings. Because of its high value addition, huge growth and employment opportunities, leather sector has already been declared a top priority sector.

Recent innovation has widened the scope to produce footwear in combination with leather and other locally sourced natural fibers, like jute. Bangladesh accounts for 3% share in the global leather and products market. Almost 60% of its annual output is being exported. The export of leather and leather products increased manifold over the past decades. The compound annual export earnings crossed billion dollar mark in the year of 2013-2014. The composition of leather and leather goods from Bangladesh underwent a structural change. Whereas in 2008, 62% of all export earnings from the sector came from finished leather, by FY’2017-18, this proportion came down to 16.86% and Bangladesh is rapidly moving towards production of diversified finished products. The growth of the footwear industry has increased from 36.64% of total sectorial export earnings in FY’2007-08 to 60.90% in FY’2017-18. Keeping pace with the global trends, Bangladesh is now moving into sportswear, footwear made of other fiber mix (e.g. Jute). Because of sustained growth performance and its increasing competitiveness in producing quality products a number of big foreign companies like TBS Group of Vietnam and Farida Group of India have shown interest in establishing footwear units in Bangladesh.


 
 
 

A SNAPSHOT OF BANGLADESH LEATHER INDUSTRY

• Tanning & Finishing
• Footwear & Footwear Components
• Leather Accessories
• Leather Goods (bags, wallets, belts, accessories, etc.)


 
 
 

STRATEGIC LOCATION OF BANGLADESH

Bangladesh is located at a strategic position which has border between India and Myanmar and can easily be connected to China that gives Dhaka strategic edge to access EU as well as ASEAN market.


 
 
 

BANGLADESH LEATHER SECTOR: SOME POINTERS

• Bangladesh has a long established tanning industry which produces around 1.13 % of the world`s leather from a local supply of raw materials. • The leather sector includes 200 tanneries, 3,500 MSMEs footwear making units and 90 large firms. • Bangladesh meets the demand for about 10% of the world’s total leather market.

• The sector generates direct and indirect employment for about 850,000 people, 60% of the workforce are women in the leather products industries. • Strong environmental regulations within the country. Bold industry initiatives in order to improve consumer safety and compliance standards. • Media, civil society and regulators are vigilant to ensure occupational safety and work environment. • Promising Foreign Direct Investment and quick technology adoption • Enormous potential for future growth (domestic as well as export). • Aims to reach USD 5 billion annual export by next 5 years.


 
 
 

STRENGTHS OF BANGLADESH LEATHER SECTOR

• Bangladesh annually produces 300 million sqft of quality bovine, ovine and caprine leathers. It has international reputation for high quality of fine grain, uniform fiber structure, and natural texture, which mostly comes from domestic farming. • Goatskins are of globally recognized exceptional quality (special quality of cow calf/goat). • 33.26% Average annual average export growth rate of leather goods and footwear over the last 4 years. • Abundant labor force and competitive labor cost. • Tariff and quota free access to the European Union (GSP), Canada, Australia and Japan. • Shipment facilities-both by frequently available air and large seaport. • Preferred sourcing hub for renowned International brands.


 
 

EMERGING STRENGTHS OF THE INDUSTRY

• A sustainable 205 industrial units Tannery Estate has been developed with CETP & STP. • Increasing production of eco-friendly leather. • Design development initiatives by institutions. • Continuous modernization and technology upgrades in production process. • Increased linkage industries – packing, lasts, adhesives, outsoles etc. • Constant human resource development program to enhance productivity. • Promoting EZ and SEZ to attract and facilitate foreign investment. • Increasing use of quality components. • Quality and Compliance test from internationally accredited institutes. • Nearly 10 million urban populations have annual incomes well in excess of $10,000 offering a sizable market for a wide range of goods and services.


 
 
 

GOVERNMENT SUPPORT POLICIES

• Government has identified leather as a top priority sector for export to exploit country’s full potentials in this sector. • Duty free import of all type of raw materials and machineries. • Support in the form of cash incentives, bonded warehousing along with other policy supports. • 90% loans against letters of credit and funds for export promotion. • Export credit guarantee scheme. • Export Development Fund (EDF). • Green Transformation Fund (GTF). • Domestic market sales of up to 20% is allowed to export oriented business located outside of EZ.


 
 
 

BANGLADESH’S EXPORT OF LEATHER AND LEATHER PRODUCTS

(Values in Million US$)

Category 2014-2015 2015-2016 2016-2017 2017-2018
Leather 397.54 277.9 232.61 183.1
Leather products 249.16 388.22 464.43 336.81
Footwear 673.27 714.01 777.84 809.69
Total (leather & products) 1319.97 1380.13 1474.88 1329.6
Growth 5.16% 10.92% 5.45% -10.53%

Source: Export Promotion Bureau


 
 
 
 
MAJOR IMPORTING COUNTRIES OF BANGLADESHI LEATHER
& AND LEATHER PRODUCTS FOOTWEAR

The European Union (EU) is the biggest destination for footwear exports accounting approximately 55.4% share followed by Japan with 30%.
(Value in million US$)

Country 2015-2016 2016-2017 2017-2018
Germany 127.52 143.47 109.96
China 230.38 240.62 76.56
Japan 141.42 115.89 129.25
U.S.A 122.77 148.69 157.38
Spain 77.93 85.90 104.21
Italy 70.94 65.53 56.98
France 38.13 43.63 42.79
UK 25.65 25.63 31.64
UAE 117.01 91.11 12.09

Source: Export Promotion Bureau


 
 
 
 

BANGLADESH IMPORT OF BOVINE & OVINE LEATHER

Category Quantity in 2015
Imports of light leather from bovine animals 83 million square feet
Imports of light leather from sheep and goats 1.4 million square feet
Total 84.4 million Square feet

Source: World Statistical Compendium for raw hides and skins, leather and leather footwear 1993-2012, FAO.