One of the largest manufacturing industries in Bangladesh
is the footwear industry. Over the past decade, the industry has been growing
steadily. Significant economic growth, increasing consumer purchasing power and
increasing fashion consistency are the main reasons for the growth of this
industry. In recent years, the sector has also been able to make some
investments, which have helped increase production units and increase
production capacity. At present, Bangladeshi shoe makers have created their
position in the foreign market by meeting the local demand.
From 2009 to 2018, Bangladesh's economy grew at an
average rate of 6.5 percent. Exports and remittances are the main drivers
behind this growth. Over the years, the ready-made garments (RMG) sector has
maintained a strong dominance over the country's total exports. To maintain
high economic growth and prevent Dutch disease, diversification of key economic
drivers is essential. Apart from RMG exports, which constitute about 85 percent
of the country's export basket. Leather and footwear together account for 3.3
percent of the overall export basket.
Exploiting Bangladesh's abundant supply of raw materials
and labor intensity, the country's leather sector is meeting domestic demand
and actively participating in the global value chain. According to Rawhide
Industry Insights, 50 percent of rawhide in Bangladesh is harvested during Eid-ul-Azha.
In 2019, ahead of Eid-ul-Azha, the government of Bangladesh fixed the price of
cowhide at Tk 45-50 per square foot within Dhaka region and Tk 35-40 for other
regions of the country. Besides, the price of raw goat skin was fixed at 18 to
20 taka. The year 2019 was not in favor of the industry due to price shocks
caused by decline in global demand, delay in construction of industrial park
for Savare Tannery, expansion of Leather Working Group, despite fair pricing by
the government. LWG) certification, and the lack of financing available to
tannery owners resulted in the wastage of about 100,000 pieces of rawhide.
However, one of the main reasons behind not being as
agile as its neighboring countries is the lack of Leather Working Group (LWG)
certification. On this note, in 2019, the Government of Bangladesh mentioned
the continuation of incentives during the Bangladesh Leather Footwear and
Leather Goods International Sourcing Show (BLISS). The leather industry of
Bangladesh developed in the 1970s and now, according to the Leather Goods and
Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB),
footwear is one of the major products of the industry. Considering the huge
opportunity to earn foreign exchange and to expand the country's market, the
Seventh Five Year Plan of Bangladesh Government has projected export earnings
of at least US$ 5 billion from the leather sector consisting of leather,
leather products and leather footwear.
-SZK
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