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Leather industry hits record exports

leatherThe leather industry has crossed the record $1-billion mark in exports in the first ten months of this fiscal year on the back of competitive pricing and quality improvement.

Between July and April, the leather industry exported $1.06 billion of products, whereas the exports receipts for the whole of fiscal 2012-13 stood at $980.67 million, according to data from the Export Promotion Bureau.

Mohammed Nazmul Hassan Sohail, managing director of Leatherex Footwear Industry Ltd, a leading leather goods exporter, said the export figures would have been much higher if political unrest had not hurt the sector last year.

M Abu Taher, chairman of Bangladesh Finished Leather, Leathergoods and Footwear Exporters’ Association, credited the spike in orders to the competitive pricing.

He said many buyers are diverting orders from China, where the production cost has increased significantly.

Leather businessmen are now confident of meeting the export target of $1.21 billion set by the government for this year, and Taher said the sector will be able to earn as much as $2 billion next fiscal year if the present trend continues.

Leather goods exports rose 70.14 percent to $197.36 million in the first ten months of this fiscal year, while it was 33.90 percent to $424.05 million in leather and 30.24 percent to $443.54 million in footwear, EPB data shows.

Buoyant work orders encouraged entrepreneurs to park more funds in the sector: opening of letters of credit for capital machinery imports rose by 118.58 percent to $4.8 million year-on-year in the July-February period, according to Bangladesh Bank.

Md Saiful Islam, senior vice-president of Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh, said the improved quality also helped in winning the confidence of buyers.

Many leather goods and footwear makers are producing high quality products targeting the middle- and higher-end segments of the market, which ultimately helps in earning more in unit price, said Islam, also the managing director of Picard Bangladesh.

Between July and January, leather shipment rose 45.38 percent year-on-year in terms of value, according to BB. Timely delivery is another reason for the increase in export earnings, according to Md Abdul Hai, general secretary of Bangladesh Tanners Association. “We can ship goods on schedule as there is no labour unrest in the leather industry.”

“We could grab more orders if there was no political unrest,” said Sohail adding that Japanese buyers had almost stopped placing new orders due to the unrest, even many of them are not placing orders.

Bangladesh exports leather products mainly to Italy, New Zealand, Poland, the UK, Belgium, France, Germany, the US, Canada and Spain.

Also, Japan, India, Nepal, Australia and some other countries are emerging as potential importers of Bangladeshi leather goods.

Bangladesh now exports only 0.005 percent of the global leather and leather goods market worth $230 billion, according to industry insiders.

The country will be able to earn at least $5 billion in exports from leather, leather goods and footwear in the next decade if it can properly address health, environment and compliance issues in the sector.

Report: Suman Saha
Source: Daily Star

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