Leather entrepreneurs fear loss of export market

Dhaka,  Mon,  29 May 2017
Published : 13 Apr 2017, 10:04:24
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Leather entrepreneurs fear loss of export market

Evicted from Hazaribagh hub, delayed relocation
Ismail Hossain
Leather exporters fear a loss of around Tk 12 billion in export earnings for shipment failure following a sudden lockdown on their Hazaribagh production hub.

They lamented that disruption to production of leather and leather goods occurred for sudden shutdown of factories in Hazaribagh sans readying Savar Tannery Estate.

"We have made a rough estimation that there are around Tk 12 billion worth of export orders for leather and leather goods and we don't have any finished products to deliver," Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association Chairman Mohiuddin Ahmed Mahin told The Financial Express Tuesday.

He said the buyers may naturally cancel their orders if exporters can't deliver the shipments on time.

Utility services like power, gas and water to all the Hazaribagh tanneries were disconnected Saturday as deadlines for relocation to the newly built estate were over. The action followed a higher-court order.

On March 6, the High Court had directed the government to immediately shut down the Hazaribagh tanneries and disconnect all the utility lines, including gas, power and water, as the tanners failed to relocate their factories

They were asked to move out to Savar Tannery Estate immediately. But Savar Tannery Estate does not have any gas connection while other facilities are half-done, the owners said.

Mr Mahin said export orders come every day, the exporters and tanners manufacture goods every day and deliver as per shipment order every day. Now everything has stopped.

"We do not know when we could overcome the losses. The government forced us to leave without ensuring facilities in Savar--this is unfair action against a more-than-one-billion-dollar industry," he said.

Bangladesh government has set a target of US $5 billion worth of export of leather and leather goods by 2021-Banglafdesh's golden-jubilee year.

Mr Mahin noted that the sector makes the second-highest contribution to national exports, after readymade garments. It would be impossible to attain the $5billion target if the government holds such attitude to the sector.

Leather-and leather-product exports increased by 8.41 per cent to

$922.96 million in the last July-March period of 2016-17 fiscal year compared to $851.33 million in the same period of last fiscal.

The export earnings from leather and leather goods crossed US$1.0 billion for the third consecutive year in fiscal 2015-16, according to data from the Export Promotion Bureau.

In 2015-16, Bangladesh exported leather and leather goods worth US$ 1.16 billion while it was US$ 1.13 billion in 2014-15 and US$ 1.12 billion in 2013-14.

General Secretary of Bangladesh Tanners Association (BTA) Shakhawat Ullah said an alliance of all tannery-related organizations sought compensation from the government for the losses stemming from the shutdown.

"We are estimating total losses, we will tell reporters very soon," he added.

Owners of tanneries Monday issued a 15-day ultimatum for the government to ensure all utility connections to the Savar Tannery Estate or else restore the same to the old site at Hazaribagh in the city.

They also threatened to lay a siege to Bangladesh Small and Cottage Industries Corporation (BSCIC) if utility connections to Savar Tannery Industrial Estate were not provided within the next 15 days as per High Court orders.

Tannery Estate Project Director Ziaur Rahman was not available for comment about the situation.

But a senior official said the estate authority had provided connections to only two factories until Tuesday. They would not be able to give gas connections to all the 154 factories in 15 days.

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