Exports of leather footwear have registered a steady growth of 9.22 per cent by earning USD 72.35 million in first month (July) of the current financial year (FY2019–20) due to increasing investment in this sector. The sector earned USD 66.24 million during the same period in FY2018-19, according to Export Promotion Bureau (EPB) data. The growth shows that Bangladeshi entrepreneurs are putting in money in compliant factories to produce high-quality footwear. Saiful Islam, president of the Leather Goods and Footwear Manufacturers’ and Exporters’ of Bangladesh (LFMEAB), told The Independent that the steady growth could be attributed to three factors. “First of all, factories producing footwear are environmentally compliant—they conform to environmental laws, regulations and standards,” he said. “Second, we’re getting the benefits of investment in this sector. This is reflecting the growth prospects in the long term. As a result, 20 new export-oriented footwear factories have come up and started operations in Bangladesh in FY2017–18,” he noted. “Finally, labour costs are increasing in China, prompting a shift to high-tech industries in that country. So, if investors decide to move to a cost-competitive manufacturing base, Bangladesh is the most lucrative option,” he added. He also said Bangladesh was exporting footwear to European Union (EU) member countries, Japan and North America. When asked about the challenges, Saiful Islam said: “This sector is facing some challenges. They include reduction of the lead time to within 45 days, establishment of more compliant footwear factories, and long-term policy support.”
The leather sector is the country’s second largest export earner with an income of over USD 1 billion. It also directly and indirectly employs about one million people, he added. Saiful Islam noted that competitive pricing, low labour cost and available raw materials could help Bangladesh grab a bigger share of the global market of leather products. “If a long-term sustainable policy support is implemented, it’s possible to achieve a growth level of 15-20 per cent instead of 9.22 per cent,” he added. Kaniz Fatema, founder of ‘Top Leather’, told The Independent: “I started my business with Tk 10 lakh. I have a small factory of leather products in Hazaribagh with six machines. More than five employees are working under me.” Currently, Top Leather produces shoes and sandals for both men and women and many other types of leather goods. Asked whether Top Leathers also exports its products, Kaniz Fatema said: “We don’t directly export, but buyers inside the country bought products from us and export them to different countries.” Outlining the challenges before this sector, she referred to the paucity of capital for young entrepreneurs. “Our entrepreneurs do not know how to market a product. They don’t have enough marketing knowledge to export their products successfully,” she observed. “We do not have enough efficient designers. That’s another obstacle,” she added. About her company’s future plans, Kaniz Fatema said: “I want my factory to be fully compliant within three years. Besides, I want to open retail outlets in all the districts.” According to the Bangladesh Tanners’ Association (BTA), 350 million sq ft of leather is produced annually in Bangladesh. Of this amount, 20–25 per cent goes to meet the domestic demand, while the rest is exported. The government considers “leather goods and footwear” as one of the main growth generators for the country to cross the middle-income threshold. According to the LFMEAB, approximately 220 tanneries, 2,500 footwear-manufacturing units and 90 large firms are involved in making leather goods and footwear mainly for exports. Bangladesh exports leather goods and footwear mainly to the UAE, Argentina, Austria, Australia, Belgium, Canada, Switzerland, Chile, China, Germany, Denmark, Italy, Spain and Finland. The country currently exports roughly USD 1.16 billion worth of leather goods and footwear products annually.
