Bangladesh spending huge foreign currency on importing finished leather
Remaining 2 percent construction work of the central effluent treatment plant (CETP) of Savar Leather Industrial Park has not been completed even in two years.
This is why the Park failed to apply for the certification of the Leather Working Group (LWG).
Preferring anonymity, a leather entrepreneur told The Business Standard, "A completely functional CETP is mandatory for LWG certification. The CETP construction work has remained postponed since 2017. For this reason we are gradually losing market share."
The government has invested Tk1,019 core in the last 16 years, according to the Ministry of Industries. However, the Bangladesh Tanners Association says the entrepreneurs have also invested Tk7,000 crore in the Park.
The Executive Committee of National Economic Council approved the "Savar Leather Industrial Park" project on August 16, 2003 with an estimated cost of Tk175.75 crore. It was scheduled to be completed within December 2005, according to the Ministry of Planning.
The project has been revised for the fourth time and the cost raised to Tk843.25 core, said industries ministry Secretary Md Abdul Halim at a workshop on the "Leather and Leather Goods Development Policy 2019" at the Economic Reporters' Forum in the city.
Halim said the ministry is working hard to achieve the LWG certification for the Park.
"All the unfinished work of the CETP and the Park will be completed by December this year," he said.
The CETP is just a fraction of the LWG certification's requirement; most of it is associated with the tanners, Halim claimed, while pointing out that the tanners must play their part.
Achieving the $5 billion leather and leather goods export target by 2024 will depend on the implementation of the Leather and Leather Goods Development Policy 2019, said tanners association's Chairman Shaheen Ahmed.
The government had to extend the tannery relocation deadline – to Savar from Hazaribagh – for the ninth time, Shaheen said.
"The LWG will extend its current protocol 6.6 to 7 by 2020," said Ibnul Wara, managing director of Austan Ltd, an LWG certified tannery based in Dhaka Export Processing Zone.
Environmental issues, housekeeping, chemical management module, less water consumption, salt use and recovery will get priority in the new protocol, he said.
To help boost leather export, Wara also requested the government to approve tannery owners' application for setting up a private effluent treatment plant.
Industries Minister Nurul Majid Mahmud Humayun said Bangladesh exports only $1.2 billion leather and leather goods while the global market size is about $220 billion.
Despite having huge raw materials Bangladesh is spending huge foreign currency on importing finished leather, State Minister for Industries Kamal Ahmed Majumder said, adding that the reason is capacity constraint of processing raw materials as per the international standard.