Ctg rawhide businesses languish over poor prices

A large number of rawhide traders in Chattogram have shut their businesses as they suffered losses through not getting buyers inside the district and failing to collect their dues from the tanneries in Dhaka.

According to the traders, there were 22 tanneries which bought rawhides in Chattogram even a few years ago. All but one of those tanneries have closed due to losses and inability to set up effluent treatment plants (ETPs).

Currently, only Riff Leather operates in Chattogram by setting up an effluent treatment plant as per the regulations related to tanneries, but it buys only a small portion of all the rawhides collected in the district.

Riff Leather has a demand of only one lakh pieces of rawhide, while around six lakh pieces are collected from Chattogram and the surrounding districts on the day of Eid-ul-Azha alone. As a result, rawhide traders in Chattogram have to sell their products at a low price and often on credit to tanneries in Dhaka.

In addition to poor prices, collecting dues from the Dhaka tanneries is a big problem. It takes around eight to 10 months or even a year to collect the dues. Consequently, these traders incur huge losses as they run their businesses by taking loans from banks or money lenders, said rawhide traders in Chattogram.

Muslim Uddin, president of Chattogram Rawhide Traders' Association Limited, said the association had 112 registered members. Aside from them, there were around 80 other rawhide traders in the district. Many of these traders have wrapped up their businesses in the last few years after counting losses for a long time.

At least 10 rawhide traders have closed their businesses in the last one year. Currently only around 30 rawhide traders are somehow surviving in the business.

Ayub Chowdhury closed his business Nur-e-Madinah last year. He told TBS, "I had run a rawhide business since 1982. In the last eight years, I faced great difficulties in this sector. Poor price was a problem, but collecting dues from traders in Dhaka was an even bigger problem. Businessmen in Dhaka owe me at least Tk2 crore.

"I kept the business running despite suffering losses since 2015, but I cannot manage to do it anymore. Fifteen workers have become unemployed along with me."

Mohammad Iqbal, owner of another closed company named Ayub-Iqbal Aratdar, said, "I suffered continuous losses since 2015-16. Ever since the tanneries were closed, we had been selling rawhides to parties in Dhaka, often on credit. So I have wrapped up the business. Two parties in Dhaka owe me around Tk1.5 crore."

Muslim Uddin, a rawhide trader in Chattogram, said last year he bought cow rawhides at Tk40-44 per sq ft, and goat skin at Tk12-20 per sq ft, but later he had to sell it at a price lower than that. Despite lowering the price many rawhides remained unsold for a long time.

Mokhlesur Rahman, director (operation and sales) of Riff Leather Limited, said, "The price of leather has been on a downward trend in the international market since 2015. Before 2015, processed cow rawhide was exported at a price of over $2 per sq ft in the international market, but recently it has dropped to $1.

"Many are leaving the business due to the poor condition of the industry. To save the industry in this situation, the relevant organisations, including the industries ministry, have to take the initiative."

Tannery owners and rawhide traders said the major markets for rawhides and leather products of Bangladesh are Germany, Italy, France, Netherlands, Spain, Russia, Brazil, Japan, China, Singapore, Taiwan, South Korea, and the United States. But in these countries, leather and leather products currently sell at 20% lower prices than before. This has also affected the domestic leather industry.