Special Correspondent :
The leather industry, the second largest export sector of Bangladesh, has been struggling due to various issues, including a financial crisis.
Approximately 20-30% of the rawhide purchased by tanners last year remains unsold, as global demand for leather goods has declined.
Despite this, the tanners are prepared to buy 1.10 crore rawhides during this Eid-ul-Azha, stated Shakhawat Ullah, General Secretary of the Bangladesh Tanners Association (BTA), in an interview with The New Nation on Friday.
Currently, there are 142 tanneries in the Savar tannery industrial estate ready for rawhide purchases. “About 20-30 per cent rawhide is still unsold.
Despite that, we have completed our preparation to buy 1.10 crore piece rawhides during Eid-ul-Azha this year,” Shakhawat Ullah said.
Last year, tanners procured about 85 lakh hides from domestic sources during Eid-ul-Azha.
However, the financial support for purchasing leather has been dwindling. Shakhawat Ullah noted that only five or six companies are likely to receive Tk 50-60 crore in loans for rawhide purchases this year.
He highlighted that the banks hold a significant portion of these loans as arrears, with Tk 400-450 crore outstanding since 2017.
To address the crisis, Ullah emphasized the need for at least Tk 500 crore in new financing, which would consider the previous outstanding amounts.
Without this, the leather sector’s challenges will persist, potentially leading to a decrease in leather prices this year.
In 2023, the loan disbursement target for sacrificial leather processing was Tk 259 crore, a 41.07% decrease from Tk 443 crore in 2022.
Data from Bangladesh Bank shows that loan disbursements for the leather sector have been consistently decreasing, with Tk 583 crore in 2021 and Tk 644 crore in 2020.
The industry’s environmental management is also problematic.
The Central Effluent Treatment Plant (CETP) and solid waste management in the tannery estate need significant improvements to meet international standards, according to Shakhawat Ullah.
The lack of a permanent dumping yard for solid waste disposal has led to pollution in the Dhaleshwari River.
The tannery industrial estate, implemented by the Bangladesh Small and Cottage Industries Corporation (BSCIC), reported that the CETP is operating below half its capacity.
The government initiated the project to shift tanneries from Hazaribagh to Hemayetpur in Savar in 2003, but the leather industry has yet to become environmentally friendly.
Over 50% of the tannery industry’s raw material supply comes during Eid-ul-Azha. This year, the government has increased the prices of salt-applied rawhides and skins by Tk 5.0 compared to the previous year.
The prices for salted sacrificial cow hides are set at Tk 55-60 per square foot (sqft) in Dhaka and Tk 50-55 per sqft outside Dhaka. Goat hides are priced at Tk 20-25 per sqft, and baqri skins at Tk 18-20 per sqft.
The minimum price for cow rawhide is fixed at Tk 1,200 in Dhaka and Tk 1,000 outside Dhaka. Last year, the prices were Tk 50-55 per sqft for cows in Dhaka, Tk 45-48 per sqft outside Dhaka, Tk 18-20 per sqft for goat hides, and Tk 12-14 per sqft for baqri skins.
This year, the potential demand for sacrificial animals is 1,29,80,367, an increase of 4,44,034 from the previous year. The country has a surplus stock of 22,77,973 sacrificial animals beyond the current demand.