The Fascinating Tale of “Made in

Bangladesh” Leather.
Chronicles of the rise of the Bangladesh Leather Sector.

Are Timberlands made in Bangladesh? That seems to be the question of leather

product manufacturers all across the world. A staple among New Yorkers, Timberlands
keep your feet warm, cosy and dry all day. And what makes them so popular
worldwide? Their thick, durable and luxurious leather. The same characteristic, in fact,
is found in leather products of the leather industry in Bangladesh.

The title of “Made in Bangladesh” leather is one that has been achieved after much
struggle and experimentation. And it’s a deserving title, one that has given leather
products manufacturers in Bangladesh an identity in the world. Known for its high-
quality fine grain leather, uniform fibre structure, smooth feel and natural texture,
leather products in Bangladesh have become one of the country’s key exports to
destinations like the EU, USA, Australia, Japan, Singapore, and South Korea.

But what is it that makes Bangladesh’s leather sector so lucrative that brands far and
wide flock to revel in its richness? The answer lies in its geographically advantageous
position. Situated in the south-eastern part of the Indian subcontinent amidst the
Ganges basin, the leather industry in Bangladesh is benefitted by the highly fertile
alluvial soil bearing natural green vegetation, providing the most ideal conditions for
high-quality animal hides and skins. Just like it once provided the optimum climate for
the production of the legendary fabric, muslin, it continues to be a blessing for the
Bangladesh Leather Sector. But how did leather products manufacturers in Bangladesh
get started in the first place?

History of the Bangladesh Leather Sector:

The leather industry in Bangladesh traces its roots to 1964, when the non-profit
Pakistan Tanners Association was founded. In the aftermath of the 1971 Civil War, the
Association was renamed the Bangladesh Tanners Association (BTA), in charge of
liaising between the leather industry in Bangladesh and government bodies, and of
export certification. 1990 saw a government ban on the export of wet blue hides. Why?
If the salted raw hide can be processed to the stage of finished goods production, it can
add up to 90% value!
In 2003, the Leathergoods
And Footwear
Manufacturers & Exporters
Association of Bangladesh
(LFMEAB) was established
with a view to consolidate
and monitor leather
products manufacturers in
Bangladesh. And this five
decades-long evolution of
the Bangladesh leather
sector has culminated to
form the BSCIC Tannery Industrial Estate at Hemayetpur, Savar today, with the leather
industry in Bangladesh having ready availability of the highest quality full grain natural
leather. Further developments to Bangladesh leather sector occurred in subsequent
years, like the building of Dhaka’s first Central Effluent Treatment Plant (CETP) for 30
years by the Bangladesh Export Processing Zone Authority (BEPZA) and FDC to build,
that began commercial operations on the 1st of February 2012. Following that, exports
of leather products in Bangladesh achieved 1 billion USD for the first time in its history
– a humongous achievement, no doubt, but one that still has a long way to go, with the
government currently targeting a growth to $10-12 billion by 2030!
To give reality to its ambitious dream, the Government began a strenuous process of
relocating leather products manufacturers in Bangladesh to the Savar Tannery Estate
from the capital 2016 onwards – an objective that has only seen completion on the
30th of June in 2021. Because of this, the CETP established was only able to start fully
functioning onwards of 2017. So, with all these developments taking place, where does
the Bangladesh leather sector stand presently?

Current Position of the Leather Industry in Bangladesh:

Presently, Bangladesh has been ranked as one of the top-ranking leather-producing

nations of the world. With 2 percent of the total livestock population in the world, the
production output of the leather industry in Bangladesh consists of 56% cowhide and
30% goatskin, the remainder being sourced from from buffalo hide. Not only is the
Bangladesh Leather Sector said to be self-sufficient in terms of rawhide sourcing, only
about 18% of its estimated annual supply of 300 million square feet and an output of
approximately 200 million square feet is used to meet local leather demand. So, nearly
76% of the production units in the leather industry in Bangladesh are geared towards
export.

The leather products manufacturers in Bangladesh, therefore, exports nearly 50

different types of leather and leather goods to more than 80 countries around the
globe. Leather products made in Bangladesh are also supplied to world-renowned
brands like ABC Mart, Adidas, Aldo, Armani, Bass, Esprit, Hugo Boss, H&M, Hush
Puppies, Kate Spade, K-Mart, Michael Kors, Marks & Spencer, Nike, Picard, Steve
Madden, Sears, and Timberlands. So if you’re asking if Timberlands are made in
Bangladesh, now you have your answer.

Leather products in Bangladesh include various divisions, including crushed leather,

blue wet leather, finished leather and split leather, as well as finished products like
garments, shoes, belts, bags, jackets, suitcases and wallets. But footwear is
undoubtedly the biggest, with the Bangladesh Leather Sector being the 8th largest
producer of footwear (423 million pairs) and 9th largest consumer market (366 million
pairs, generating over $3.0 billion from the domestic market alone) in 2020, according
to the World Footwear 2021 Yearbook. Internationally, the leather industry of
Bangladesh is estimated to have an export potential of US$1.0 billion, making it the
2nd largest foreign currency earner after garments.
Internally, the LFMEAB estimates that there are currently 200 tanneries and 3500
MSMEs in the leather industry in Bangladesh employing over 200,000 people directly
and around 0.85 million indirectly, amongst whom 60% are women.

Performance of the Leather Products Manufacturers in

Bangladesh in Recent Years.

Prior to 2017, investments in the

leather industry in Bangladesh
were thought to be rising,
motivated by the confidence of
environmentally compliant
factories and the promise of high
quality. The actual scenario of the
leather products manufacturers in
Bangladesh, however, was quite
different. Exports of leather and
leather products had declined by
more than 12% from 2017 to 2018
and missed the targeted amount
for the period by 20.15%. The Export Promotion Bureau (EPB) also estimated that
export earnings of leather products in Bangladesh declined by 16.11% in the fiscal year
2018-19.

But the biggest setbacks for the Bangladesh leather sector occurred during the initial
stages of the COVID-19 pandemic. RAPID Chairman Dr Mohammad Abdur Razzaque
expressed his concerns that domestic sales of the leather industry in Bangladesh had
fallen by 22% during that period. This was, in fact, proportionately much larger than the
10% fall in worldwide trade.
In the first 5 months of FY20, the Bangladesh leather sector’s export earnings from
crust leather fell by 5.42% and leather products a whopping 49%.

Many reasons have been cited for this gradual decline in the earnings of the leather
products manufacturers in Bangladesh, like:

• Declining demand for the crust and processed leather.

• Increasing use of artificial leather.
• Lack of proper waste management facilities.
 • Safety and compliance issues.
• Lack of new investment during this period.
• Lack of diversity in product portfolio.

The chairman of the Bangladesh Tanners Association also stressed on the massive 40%
decrease in work orders for finished and processed leather from Spain, Italy, Hong
Kong, and South Korea due to the pandemic, which accounts for nearly 60% of the
Bangladesh leather sector’s exports. Additionally, 30% of the leather and leather
products in Bangladesh are exported to China at prices 40% lower than the prices paid
by European or US clients. Furthermore, the US-China trade war has also had its
repercussions behind this negative export growth rate of the Bangladesh leather
sector.

In the later stages of the pandemic, however, individual categories of the leather
industry in Bangladesh has started to show improved performances. Leather footwear,
for instance, showed a 4.54% growth in FY20, while finished leather exports went up by
34.67%, actually overcoming the monthly target (11.19 million US dollars). Other
leather goods too showed an increase by 14.33% from the performance in July 2020.

Apex Footwear Limited Managing Director Syed Nasim Manzur reportedly estimated
that daily global footwear sales amounted to $300 million and this demand would not
be decreasing. He further emphasized that the leather industry in Bangladesh’s export
for the six months ending June 2021 grew 54%.

Not only that, Mohammed Nazmul

Hassan, Vice President of the
LFMEAB and Managing Director of
Leatherex Footwear Industries
Limited has expressed his
confidence that, “Every year, 15–20
new leather products and footwear
factories are being opened in the
country.” There might be light at
the end of the tunnel after all.
Opportunities for the Bangladesh leather sector:

Currently, the leather industry in Bangladesh is on a promising trajectory. Now, there

are 4 strategic areas for leather products manufacturers to develop the industry and
grab more market share: chemical imports, leather exports, compliance with foreign
markets and environmental regulation. The general manager of Solidaridad Asia,
Tatheer Zaidi, said that around 200-220 million sq ft of leather is produced by the
Bangladesh leather sector, netting around 3% share global market. This, however, can
be extended in ways like:

• Proper rawhide management during Eid-ul-Adha, the primary season for the
supply of raw materials for the leather industry in Bangladesh.
• Carrying out solid waste management at the Savar facility in an environment-
friendly way to improve the image of the industry.
• Partnering with the Netherlands to introduce the technology of using surface
water at an affordable cost.

In fact, the Bangladesh

ambassador in the
Netherlands, Riaz
Hamidullah, said,

“Why is the conversation

regarding the leather
industry limited to effluent
treatment only? It should
be discussed in Dhaka
among the industry owners
and relevant ministries … we should discuss more about understanding the
global trend to increase leather export.”

His belief is that the strategies recommended above can help increase export
volume of the Bangladesh leather sector to European countries. The
opportunities for the leather products manufacturers in Bangladesh are
much more expansive, some of which are highlighted below:

• Huge untapped international market.

• Increasing global demand for value-added, diversified products.
 • Strong backward linkage and estimated 95% value addition.
• Significant employment opportunities as the industry is labor intensive.
• Interest by local and foreign direct investors in the value-added leather
products in Bangladesh sector.
• China, Vietnam, India and Indonesia are losing competitiveness owing to
wage increases, forcing foreign manufacturers to look elsewhere.
• GSP, cash incentive and other government policies to benefit leather products
manufacturers in Bangladesh.
• Increased international fashion and sourcing houses previously in Bangladesh
for RMG now interested in leather products (are Timberlands made in
Bangladesh? Yes, yes they are).
• Bangladesh exports footwear at zero percent tariff rate, attracting foreign
buyers.
• Exports to non-traditional markets: Australia, Singapore, Japan, South Africa,
India, and Spain, have increased, especially during the pandemic.
• Government renewal of export permits for wet-blue hides onwards of June
30, 2022 to ensure fair prices and reduce wastage.
• Growing demand and potential from the domestic market.
• Several leather products manufacturers in Bangladesh are working on making
exotic skin (like python, crocodile and lizard) lookalikes using domestic animal
skins.
• Companies designing and tanning process of leather is being done in an eco-
friendly way.
• Japan-Bangladesh bilateral Free Trade Agreement (FTA) for the RMG and the
leather industry in February 2022 opened a new horizon for expansion and
growth of the Bangladesh Leather Sector.

Challenges of the Bangladesh leather sector:

While compliance is easy to advise, it
is difficult to execute, especially in the
case of the leather industry in
Bangladesh. The industry is currently
losing out on many of the
opportunities due to the delay in
construction of the Central Effluent
Treatment Plant (CETP) in the Savar
Industrial Tannery Estate. Because of
this, leather products manufacturers
in Bangladesh have been unable to
capture the opportunity of the US-China trade war as well. Besides CETP, other
significant challenges to the development of leather products in Bangladesh include:
• Lack of sufficient solid waste management facility, discharging their untreated
waste into a nearby river in Savar and causing significant pollution.
• Child laborers employed in almost all processes along the leather supply
chain – from animal slaughter and skinning to dyeing, waste disposal and
manufacturing of leather products and by-products such as glue and meat –
on less than 13% of the average salary.
• Absence of integrated policies regarding Common Facility Center (CFC), SME
cluster development or branding and promoting leather products in
Bangladesh.
• Political instability & corruption
• Lack of backward linkage industry for chemicals/accessories and substandard
quality of the products.
• Illegal export of raw hides/skins.
• Stringent compliances from buyers.
• Opposition from animal rights organizations around the world to stop the use
of animal skins, like snakes and crocodiles. This is resulting in brands looking
for leather alternatives as well.
• Machinery & chemicals required for leather preparation imported at high
overall costs.
• Inefficient and outdated procurement, preservation, and processing systems
of hides resulting in declining quality of skins.
• Lack of skilled workforce.
• lack of funding for small and medium-sized tanneries due to the high rate of
loan default in the Bangladesh leather sector.
• Small and medium-sized tanneries heavily dependent on brokers for their
leather sales, thus failing to reach foreign markets like conglomerates.
• Poor work environment and non-compliance with Basic Health Compliance
Guidelines.
But having said all of that, a “Made in Bangladesh” leather is all about its finished
quality, refined polish, and fine grain texture that the leather industry in Bangladesh is
renowned and reputed for. The making of this high-quality fine grain leather requires
the most carefully salted hide, tanned with the elbow, grease and sweat of the
concentration that a labour pours in, the correct processing practices and polishing
before being passed on to the craftsman. It requires the most sophisticated skills &
techniques and the perfectly trimmed edges & stitches before being approved as a
“Made in Bangladesh” leather.
 Leather industry and Its Waste Management Plan

In fact, in a presentation titled “Back to the Future: Towards a sustainable leather

industry,” the leather industry magnate Syed Nasim Manzur said that the ‘Made in
Bangladesh’ tag has already gained ground for shoes and bags around the
world. Brands desire sustainable leather, and new investment, talents and effective
policy focus are the way forward. Plus, the government is already planning to establish
a full-fledged ‘leather industrial city’ of 400 acres will have a tannery, forward and
backward linkage industry, and a proper waste management system, alongside two
tannery villages, next to the BSCIC Tannery Industrial Estate.
All these give leather products manufacturers in Bangladesh as well as investors
immense confidence. It is time to showcase the story behind the famed “Made in
Bangladesh” leather around the globe. It’s time to make these high-quality fine grain
leather products in Bangladesh accessible to fashion retailer & startups, leather &
leather goods enterprises everywhere across the world.