Leather, tannery sector bearing the brunt of political turmoil


The country’s leather and tannery sector is bearing the brunt of the ongoing political turmoil as frequent blockades and strikes have badly affected their overseas business.

Expressing their worries over the prevailing situation, the sector insiders said that the future of the industry would be at stake if the violent political programmes continued for long.

The impact of political turmoil on the export of leather and leather goods, which have been among the top three products of Bangladesh’s export basket, has not yet been assessed. But certainly the violence has significantly hurt the export of leather and leather goods, they said.

“Our buyers have been leaving us, no new orders are being placed, previous shipments could not be made due to shutdowns, blockades… if this situation continues and is not resolved within December, we will really be doomed,” President of  Bangladesh Finished Leather, Leather Goods & Footwear Exporters Association (BFLLFEA) Mohammad Abu Taher told the FE Wednesday.

He said, “The November export data is yet to be released. Until October data does not bear the mark of the political crisis. Surely both export and local business were affected in November.”

According to Export Promotion Bureau (EPB) data, leather export grew by 49.54 per cent to $ 160.38 million in July-October of the current fiscal year (FY 2013-14) from $ 107.25 million in the same period of the last FY while the footwear export totalled $ 193.24 million with a 36.24 per cent growth and leather goods export totalled $ 60.34 million with a 13.94 per cent growth.

Though exports of finished leather and leather goods sub-sector showed an increasing trend, they were 7.66 per cent less than the target set for the first quarter of the current FY.

“We have to pay interest of our bank loans and wages to our workers and staffs and run the factory and production,” said Mr Taher, adding that the political leaders must understand the problem or the business leaders would be forced to make them realise.

Mr Taher, a leading exporter of footwear products, also said he himself was trying to send only 70 boxes of footwear products to Chittagong from Dhaka but could not make it.

“Tk 100,000 was asked as fare of a truck from Dhaka to Chittagong port. If I pay this fare, there will be no profit left,” he said. Tipu Sultan, managing director of Bengal Leather Complex, said they have not been able to deliver their shipments in due time according to buyers’ demand for political chaos over last two weeks.

“If political leaders can reach a consensus in the shortest possible time, we may recover our losses,” he said.

Mohammad Abu Taher said they are going to organise a press conference in a day or two.

They would put forward demands to the top executives of all commercial banks seeking special loans to pay the wages and block facility for term/project loans for next two years mainly to help the industry run the business as the apparel sector did a few days back.

“We will also appeal to the government high-ups so that the loans taken by leather and tannery industries are not categorised as classified within two years from fourth quarter of 2013 and onwards, continuation of letters of credit (L/Cs) and other facilities without any interruption and keeping their loan instalments blocked for next two years.”

The local leather goods exporters have been facing fallouts from the industrial disasters in the ready-made garment (RMG) sector, as the international buyers have become cautious about the safety standards in the leather processing industry as well.

In addition to that, the tanneries have to be relocated to Savar from Hazaribagh of Dhaka within one year.

BFLLFEA former president Haji Belal Hossain said, “We have been trying to get term loans at a low interest rate for the relocation purpose. How can we bear the expenses of running the factories if there is no export?”

“We want immediate solution to all political problems within a short period or else we will take to the streets to press home our demands,” Mr Hossain added.

Source: The Finacial Express


Please enter your comment!
Please enter your name here