Bangladesh has failed to seize the rising global demand for leather and leather goods. Despite easy access to raw materials, comparatively low labor costs and a long industrial base, one of the country’s most promising export sectors has not reached its potential.
Failure to meet environmental standards, the malfunctioning central effluent treatment plant (CETP) at the Savar tannery estate, financing shortages and policy weakness are eroding the industry’s competitiveness in international markets.
According to Export Promotion Bureau (EPB) data, earnings from leather, leather goods and footwear exports came to about $988 million in the first 10 months of fiscal 2025-26, up from $932.5 million in the same period a year earlier. Analysts say growth has nudged up but remains far below the sector’s potential.
The global leather market is worth about $560 billion. Capturing even 1 percent of that would let Bangladesh earn more than $5 billion a year, industry figures said.
Losing European and U.S. markets
The Savar tannery estate still lacks international-standard environmental management. As a result, most tanneries cannot get Leather Working Group (LWG) certification. Without that certification, big brands in Europe, the United States and South Korea are reluctant to buy Bangladeshi leather.
Shahin Ahmed, president of the Bangladesh Tanners Association, told Amar Desh that Europe, the United States and South Korea were once Bangladesh’s largest buyers. “Now there is no big market except China. Yet Chinese traders buy leather cheaply from Bangladesh, use their LWG certification, and resell at higher prices in Europe and the United States. Bangladeshi traders lose out,” he said.
“Because our CETP is not fully functional, we are not getting LWG certification. That is causing major losses in the international market. Without a timely plan, the crisis has dragged on. China, Pakistan, India and others are overtaking us in capturing the leather and leather goods market,” he said.
A report from BIDA said Bangladesh is losing about $500 million a year in potential exports because of environmental clearance gaps and the lack of international certification. Only four tanneries in the country currently hold LWG certification, none of them inside the Savar estate.
A decade in, the CETP still does not work
A project to move the tanneries from Hazaribagh to Savar was launched in 2003 to reduce pollution. Scheduled to be completed in two years, it took nearly two decades. The cost rose from 175 crore taka to 1,015 crore taka.
Even after that investment, the Savar estate is not yet fully environmentally compliant. Officials said the CETP had design flaws from the start. It was built to treat about 25,000 cubic meters of waste a day, but the estate produces about 28,000 cubic meters. During the Qurbani season, that figure rises to 40,000 to 50,000 cubic meters.
The biggest concern is that the chromium separation unit is not fully functional. As a result, untreated waste is flowing into the Dhaleshwari river, posing a long-term public health risk.
Industries ministry officials said some repairs had been carried out on the CETP over the past two years. An Italian firm, funded by the European Union, is now conducting a technical assessment. A road map for a permanent solution is expected within the next few months.
Qurbani hides selling at rock-bottom prices
Each year about 10 million animal hides are collected during Eid ul-Adha in Bangladesh. Seasonal traders and orphanage-madrasa collectors are not getting a fair price for the raw material. Cattle hides that once sold for 1,000 to 1,500 taka are now going for 300 to 500 taka in many areas.
Traders said the cost of processing and salting often exceeds the sale price, leaving collectors at a loss. In some cases, collectors have dumped hides out of frustration.
Rising salt prices add to the crisis
It takes 7 to 10 kilograms of salt to preserve a single large cattle hide. With salt prices rising sharply, preservation costs have climbed. A 74-kg sack of salt now sells for 930 to 950 taka, up from 680 to 700 taka just a few months ago.
Leather traders allege that an artificial salt shortage has been created. Delays by tanneries in clearing dues are also squeezing traders.
Wholesalers said a syndicate of salt traders had engineered the shortage. Transport costs alone come to more than 400 taka per hide, and rising salt costs add to that, raising the risk of losses. Tanneries do not pay their dues on time, and salt prices are climbing, leaving small traders unable to survive, they said.
Loans shrinking, investment stalled
Although Bangladesh Bank has ordered banks to disburse loans to leather traders quickly, in practice the lenders are no longer showing the same interest. Funding has dropped as non-performing loan rates rise. In 2019, banks disbursed 1,800 crore taka in loans to the leather sector. Last year the figure fell to just 125 crore taka. Traders said new investment was not possible without long-term loans on easy terms.
A separate board, traders say
Industry figures are calling for a standalone “National Leather Board” to develop the sector. They said the industry is falling behind because of weak leadership in policy coordination, expansion in international markets, environmental certification, technology upgrades and financing.
They also proposed separate effluent treatment plants for each tannery to ease LWG certification, long-term loan facilities and the use of leather shoes and bags by schoolchildren to expand the local market.
Traders skeptical
The government says it views the leather industry as a priority export sector, but traders argue seasonal initiatives alone will not solve the crisis. The sector cannot turn around without raising the Savar CETP to international standards, securing LWG certification, cutting import duties on chemicals, easing financing and increasing export incentives, they said.
The industry could become the country’s second-largest export sector after ready-made garments, traders said, but years of mismanagement and environmental problems have left it adrift.
Commerce Minister Khandaker Abdul Muktadir said recently that the government regards the leather sector as a priority export industry. “During Qurbani, salt supply, training and rapid transport arrangements for preserving hides are being prioritized,” he said.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report