The labor-intensive leather
industry is well suited to Bangladesh having cheap and abundant labor.
Bangladesh has a domestic supply of good quality
raw material, as hides and skins are a by-product of large livestock industry.
Adequate government support in the form
of tax holidays, duty free imports of raw materials and machinery for export-oriented
leather market
The industry lacks domestic technology and
expertise and local support industries such as chemicals are still under-developed.
Investment
Incentive:
Present Government is
in the process of setting up of separate Leather Zone relocating the existing
industry sites to an well-organized place.
New
FDI inflow is highly encouraged and foreign investors are welcome to have the
opportunity.
Industry Outlook :
There
is already a substantial domestic leather industry, mostly export-oriented. The
leather includes some ready-made garments, although that aspect is continued mainly
to a small export-trade in "Italian-make" garments for the US market.
Footwear is more important in terms of value addition. This is the fast growing
sector for leather products. Presently Bangladesh produces between 2 and 3 percent
of the world's leather market. Most of the livestock base for this production
is domestic which is estimated as comprising 1.8 percent of the world's cattle
stock and 3.7 percent of the goat stock. The hides and skins (average annual output
is 150 million sq.ft.) have a good international reputation. Foreign direct investment
in this sector along with the production of tanning chemicals appears to be highly
rewarding.
Having the basic raw materials for
leather goods as well as for the production of leather shoe, a large pool of low
cost but trainable labour force together with tariff concession facility to major
importing countries under GSP coverage, Bangladesh can be a potential off shore
location for leather and leather products manufacturing with low cost but high
quality.
