With proper investment and policy reforms, the leather industry can attract significant investments in the sector, diversify and substantially boost its exports to three folds.The Asian Development Bank (ADB) made the forecast saying that the country can easily raise its export from leather and leather goods to about US$3 billion in a year from the present state of $1.2 billion and also recommended a set of suggestions for development of the sector.“With its abundance of labor and natural resources and successful development experiences in the ready-made garments industry, Bangladesh is perfectly suited for the production of high-value leather, leather goods and footwear,” said the report ‘Developing the Leather Industry in Bangladesh’.In its report the ADB suggested for setting up a leather zone cluster to integrate all components in production chain, from raw materials to finished products. It also advocates for developing a fund for credit line to provide easier access to finance especially for SME entrepreneurs of this sector.According to the report, procurement of rawhides and skins needs to be streamlined through proper funding and also demanded review of high import duties on chemicals.It also highlighted the urgency for setting up more leather technology institutions equipped with knowledge of cutting-edge technologies, developing of infrastructure at Savar Leather Estate without delay and modernizing marketing and distribution channels for grabbing more international shares.Echoing the same, leather sector entrepreneurs also said that some reforms and policy level importance can boost up export earnings thrice from this thriving sector within a couple of years.Shakhawat Ullah, general secretary of Bangladesh Tanners Association said that Bangladesh’s leather sector is going through a transitional period and obviously has potential like RMG to grow its export earnings by manifold with current stakeholders.To unlock its potential and realize its objectives, Bangladesh also needs to implement policy reforms, discipline and wide range of marketing for entering new market, he said.Bangladesh’s exports of leather and leather products are highly concentrated in a few markets till now. ADB report said that Bangladesh exported 44 leather products to 84 destinations in 2016. In comparison, Vietnam exported 59 leather products to 122 destinations, India 63 items to 196 destinations; and China, the global leader in leather exports, 65 leather items to 209 destinations.In the case of leather footwear, the United States (US) is the top destination for exports, importing 24.7 per cent of total global leather footwear, sourcing 53.7 percent of its imports from China. The shares in the US market are about 3.4 per cent for Vietnam and 15.2 percent for India while Bangladesh’s US market share is meager at only 0.8 percent.Mentioning the government’s export target of $5 billion by 2021, ADB said that this goal is workable and need to increase growth rate to 16 per cent from current 9 percent.
