Leather Industry of Bangladesh

The Leather Industry of Bangladesh is an established and attractive location to source and outsource the manufacture of finished leather products will be an ideal offshore location for low-cost and high-quality leather and leather products manufacturing hub in the world. Good quality domestic supply of raw materials, as by-products of large livestock industry, a large pool of low cost but trainable labor force together with tariff concession facility issued by entrepreneurs have created the right conditions for smooth development of the leather industry in Bangladesh.

The leather industry recently contributes a little above USD 1 Million to GSP in Bangladesh. Footwear is the fast growing category and a most important in terms of value addition for leather products. Our main leather products are leather garments, footwear and leather goods, such as office bags, purses, wallets, belts, luggage and finished leather which using for furniture, the automotive industry and leather-based garments industry. According to Bangladesh Tanners Association, in fiscal years 2015-16 leather industry earns USD 1160.95 Million by exporting leather, leather goods and footwear in global market. In fiscal years 2013-14 and 2014-15 these industry earns USD 1295.74 and 1130.51 Million respectively.

The world’s largest footwear manufacturing country China is now shrinking from the global leather products market due to labour cost has gone up in China leather industry. Bangladesh is ready with huge potentials to attract foreign investments in the sector for low-cost and high-quality leather, footwear and leather goods. The government is working to address entrepreneurs by establishing the new Savar Tannery Estate, which conforms to strict environmental standards, and set up Central Effluent Treatment Plant (CETP) for the primary waste management facility into the new industrial area. The modern infrastructural facilities through establishment of an integrated Leather Park and increasing global demand, opportunities of investing in and setting up export-oriented leather goods manufacturing industry in Bangladesh will be truly profitable and lucrative for enthusiastic entrepreneurs to invest their valuable capital; Foreign entrepreneurs are cordially welcome to capitalize on this opportunity of leather industry.

At present, Bangladesh produces between 2 and 3 percent of the global leather goods market. Most of the livestock base for this production is domestic which is estimated at 1.8percent of the world’s cattle stock and 3.7 percent of the goat stock. Our domestic livestock, which is by-product of Agro-based Industry, main source of leather & hides for leather industry of Bangladesh. Being Bangladesh is a beef and mutton eating Muslim majority country, hides and skins will be available all the year round to feed an expected prosperous and sustained leather industry that immensely contribute to the country’s economic prosperity all the way. Bangladeshi footwear & leather goods exports to the UK, Belgium, Spain, Germany, France, Poland, Italy, the US and Canadian markets.

Japan is very promising new destinations for us, as our export is increasing gradually in the market because of a duty-free advantages of Bangladeshi leather goods. Recent years Bangladeshi leather goods exporters have been doing well in Japan, Australian, India, Nepal and Russian markets; Russian leather market has large demands of Leather Jacket, Pant, leather camisole, gloves and leather camisole knee top shoes.

Basically, leather industry needs large or medium investment for this reason two or more entrepreneurs operating business for gathering big capital to setup leather Industry. Our country’s leather industry raw materials coming from Agro-based Industry as by-products and also Agro Products and Foods Business in Bangladesh, Frozen food export of Bangladesh. For opening Leather Industry in Bangladesh, first needs to collect Trade License from authority for Proprietorship Business or Single owner Business. If two or more entrepreneurs want to jointly operate the business must need to be Company Registration at RJSC/ Joint Stock Company in Bangladesh. Partnership Firm Registration is also possible of Joint Stock Company if entrepreneurs will be two to twenty of this business. Foreign direct investment is worm welcome in this sector, there setting up Foreign Company Registration (treat as local company) 100% investment coming from abroad. Local and Foreign entrepreneurs both are jointly operating the business & invest capital and setup Joint Venture Company Registration in Bangladesh.

After getting Incorporation Certificate (Certificate of Joint stock Company Bangladesh) from RJSC (Office of the Register of Joint Stock Companies and Farms), we take Company’s Trade License, VAT Registration Certificate and TIN Certificate for starting Leather business. Generally, our leather industry’s is export-oriented that’s why we establish of the manufacturing factory for producing finished goods to export foreign market. For setting up export-based, must needed Board of Investment permission and Export Registration Certificate for exporting goods to global market; Import Registration Certificate for importing the machinery, chemicals and raw materials which using in these industries. Bangladesh Footwear and Footwear Accessories Association (BFFAA) is essential before taking Import & Export Registration Certificate from CCI&E (Office of the Chief Controller of Imparts & Exports) to start the business of leather goods Export Import in Bangladesh. The VAT Registration Certificate (Value Added Tax) is another very essential business documents not only of Leather Industry nearly all businesses needed this certificate for deducting VAT at source.

Now Govt. wants foreign direct investment in this sector along with the production of tanning chemicals appears to be highly rewarding of competitive development for leather industry in global leather market and cost effective production of export-oriented leather goods in Bangladesh. At present Bangladeshi footwear industry shares 3 per cent of the global leather market in volume meanwhile around 95% goods is exported to the international market. The leading footwear exporters are Apex Footwear, Jennys Shoes, Bata Shoe, Orion, Leatherex and Bay Footwear of Bangladeshi leather industry.




Author: Aman123