The main challenge that the country’s leather industry is facing is the Leather Working Group (LGW) certification, said Bangladesh Finished Leather, Leathergoods and Footwear Exporters’ Association Senior Vice President Diljahan Bhuiyan.
“In the past, the European Union countries did not know whether the Tannery industries in Hazaribagh had a LWG certificate or not. When the topic of shifting the Tannery Estate from Hajaribag started. The media coverage was huge as a result the world came to know that the tanneries did not have an LWG certificate,” he said during an interview with Bangladesh First.
“After a high court order in 2017, the utility services of the tannery industries in the Hazaribagh area were cut and we were compelled to shift to the Savar Tannery Estate on the outskirts of the city. We knew that the Common Effluent Treatment Plant (CETP) was incomplete. However, the government said in the court that they were complete,” he added.
He said in the beginning, buyers could not come to the newly built Savar Tannery Estate because of the poor communication system.
As a result, the businesses lost many buyers, he adds.
“They cancelled many contracts after the Hazaribagh Tannery was shut. As a result, we had to incur a huge amount of money. But we had to repay the interest against the loans in the bank. As a result, many tanneries become financially sick. At that time, 70-80% of leather was exported to South Korea, Italy, Germany and Japan,” Diljahan Bhuiyan said.
However, the situation has changed vastly at present, he said.
“Now only China buys the leather from us. They buy a product for $1.1-$1.2. However, the tanners used to sell the same products for $2.20 cents before 2017. Except for China, no one comes to us for leather,” he added.
“In the past buyers from Italy and South Korea would come and stay for a few days but the Chinese buyers stay here for months and they have built a syndicate of buyers and set the price of the leather,” the leather exporter said.
Stating that all buyers want LWG compliance for export and to get an LWG certificate, tanneries will first need the CETP and solid waste management, Diljahan Bhuiyan said, “The solid waste management is fixed yet. The government could not fix the solid waste management. The project was initiated in 2010.”
“On the other hand, the CETP cannot process 100% waste. For this reason, buyers from European Union countries and South Korea are saying that without an LWG certificate, they will not buy our products,” Diljahan added.
According to him, to save the leather industry, the sector needs CETP certification and solid waste management first.
He also advocated for waving loans.
“Many tannery owners could not do business but they had to repay the interest on loans. The Covid-19 has also impacted the business. Now what the government can do is to waive our loans, he added.
Pointing that the leather industry does not get any loans at a reduced interest now, he said, “In the Saver Tannery Estate, there are around 140 tanneries. Of them, 15-20 tanneries operate well. The rest of the tanneries are shut most of the time. Many of the tanneries have already closed.”
