United News of Bangladesh

Bangladesh’s leather sector holds significant export potential and has access to high-quality raw leather from domestic sources, but it is facing stagnation due to persistent compliance issues, according to tanners and industry experts. Global buyers are refraining from importing leather goods from Bangladesh as the country’s leather industry continues to fall short in meeting compliance requirements. The sector has struggled to achieve substantial export growth owing to ongoing problems with waste management and effluent treatment standards. This failure to meet international environmental regulations has reportedly deterred foreign buyers and investors, thereby hindering the sector from realising its substantial potential in the global marketplace. To ensure effective oversight of this vital infrastructure, stakeholders have proposed placing the Central Effluent Treatment Plant (CETP) under the direct supervision of the Prime Minister’s Office or the Bangladesh Export Processing Zones Authority (BEPZA). Talking to UNB, tanners and exporters voiced their concerns regarding longstanding issues in the leather sector, which have been widely discussed but remain unaddressed in terms of implementation. The Bangladesh Small and Cottage Industries Corporation (BSCIC), the current overseeing body, is deemed unable to manage such a large and complex sector. Shakhawat Ullah, General Secretary of the Bangladesh Tanners Association, recalled the forced relocation of approximately 222 tanneries to the Savar Tannery Estate in 2017—at a time when the CETP was not yet operational and solid waste management systems were inadequate. He expressed disappointment that the industry’s hopes were dashed, as the relocation failed to deliver on the promise of a compliant and environmentally friendly industrial zone. Bangladesh loses $5 to 10bn in leather export for environmental issues: Experts Echoing these concerns, Shahin Ahmed, Chairman of the Bangladesh Tanners’ Association, called for the formation of a Leather Development Board under the Chief Adviser’s Office. He also criticised the inefficiency of the restructured waste management authority, noting that its managing director now visits the leather estate regularly but without visible improvements. Ahmed emphasised the ‘delicate condition’ of the CETP and the bureaucratic bottlenecks hindering progress on compliance, despite at least 20 tanneries having the potential to obtain Leather Working Group (LWG) certification. Md Diljahan Bhuiyan, Vice Chairman of the Bangladesh Finished Leather, Leather Goods and Footwear Exporters' Association (BFLLFEA), underlined the growing importance of LWG certification as a prerequisite for exporting leather goods. He acknowledged that while some leather industries are capable of meeting LWG standards, mismanagement and misguided policies by government entities have indirectly contributed to the sector’s decline by creating unnecessary barriers. According to export data, the leather sector’s earnings stood at US$1.13 billion in 2012, dropping to US$970 million in 2024. Despite abundant rawhide supply, other industries have seen significant development, whereas the leather industry has lagged behind. Dr Abu Eusuf, a Dhaka University professor, said the previous government had set an ambitious target of US$12 billion in leather exports by 2030, which would require a 40% growth rate. He pointed to the current stagnation since 2017 due to compliance failures and proposed a range of solutions, including the formation of a Leather Development Board, a functional CETP, facilitation of LWG certification for at least 15 factories, provision of low-interest loans, and the establishment of a Central Bonded Warehouse for the Tannery Industrial Estate. He stressed the importance of specialised technical knowledge and entrepreneurial skills for sustainable sectoral growth. Foreign Direct Investment (FDI) is also crucial to unlock the sector’s full potential. Mohammed Mizanur Rahman, Director of the Institute of Leather Engineering and Technology at Dhaka University, highlighted that Bangladesh produces 3% of the world’s raw materials and could potentially generate around US$15 billion in annual exports if properly utilised. He identified CETP non-compliance as a key obstacle and called for accountability for those responsible for its current shortcomings. Key Factors to Achieve Success Environmental Stewardship: Significant investments have been made in modern, eco-friendly tanneries located in designated industrial zones. These areas are equipped with advanced wastewater treatment systems, conform to strict international environmental standards (such as LWG certification), and promote resource-efficient practices. This has improved the global perception of the sector and attracted environmentally conscious buyers from Europe and North America. Bangladesh leather sector is 30 years behind: Speakers on Leather Day Product Diversification: While raw and semi-processed leather still contribute to export earnings, there has been a marked increase in the export of finished leather goods, including: Footwear: High-quality leather shoes (dress shoes, casual footwear, boots) are being produced for international brands and retailers, leveraging competitive labour costs and improved craftsmanship. Specialised segments such as safety and orthopaedic shoes are also gaining traction. Leather Accessories: Sophisticated leather bags (handbags, backpacks, travel bags), small leather goods (wallets, belts, gloves), and fashion accessories are enjoying strong export growth, driven by design innovation and alignment with international fashion trends. Leather Garments: High-end leather jackets, vests, and other apparel items are being manufactured, taking advantage of readily available high-quality finished leather. Skilled Workforce Development: Targeted training initiatives have enhanced workforce expertise in design, production, and quality control, enabling the creation of higher-quality goods that align with global standards and tastes. Strategic Partnerships: Stronger collaborations with international brands and retailers have led to the establishment of manufacturing units and sourcing hubs in Bangladesh, thanks to improvements in product quality and sustainability practices. Government Support: Supportive policies have promoted investment in technological upgrades, compliance with environmental standards, and workforce training through financial incentives and infrastructure development. Trade agreements and improved market access have also helped expand export destinations beyond traditional markets. Potential Export Destinations: Bangladesh’s diversified leather product exports now reach a broader range of countries, including: Traditional Markets: The EU (Italy, Germany, France), the USA, and Japan remain key destinations for finished leather goods. Emerging Markets: Demand from Asia (India, China, Southeast Asia), the Middle East, and Latin America is growing, offering new avenues for export growth. Sub-committee to be formed to address leather sector problems Specialised Markets: Niche markets worldwide are opening up for sustainable and ethically sourced leather products. Remaining Challenges: Supply Chain Traceability: Further development is required to ensure full traceability of leather from rawhide to finished goods, a key aspect of sustainability and ethical sourcing. Branding and Marketing: Investment in branding and marketing is needed to elevate the profile of "Made in Bangladesh" leather goods internationally. Technological Upgradation: Continued adoption of modern manufacturing technologies and automation is necessary to improve efficiency and product quality. Despite its challenges, Bangladesh’s leather sector is gradually transitioning from a supplier of raw materials to a significant exporter of high-quality, sustainable and diverse leather goods.