👜 An In-Depth Overview of Bangladesh’s Leather Industry

The Bangladesh leather industry stands as one of the country’s most significant and promising sectors after ready-made garments (RMG), contributing to economic growth, job creation, and export earnings. Known for its high-quality raw hides, competitive production costs, and skilled workforce, the sector has the potential to become a global leader in leather goods manufacturing.

However, while the industry has many strengths, it also faces pressing challenges—particularly in environmental compliance, infrastructure, and branding. With growing international demand for sustainable and ethically sourced products, the industry is at a critical crossroads.

This detailed overview covers the history, economic impact, strengths, challenges, and future opportunities of the Bangladesh leather sector.

 

📜 Historical Background

Leather processing in Bangladesh dates back to the 1940s when small-scale tanneries began operating in Dhaka. The sector initially focused on raw hide exports to global markets, particularly Europe and the USA.

By the 1970s and 1980s, leather manufacturing expanded to include tanning, finishing, and leather goods production, catering both to local consumers and export markets.

For decades, Hazaribagh in Dhaka was the main hub for tanneries, but due to severe environmental pollution and health hazards, the government decided to relocate the industry to the Savar Tannery Industrial Estate (STIE) in 2017. This move aimed to modernize facilities and improve compliance with global environmental standards.

 

📊 Economic Importance

The leather industry is one of Bangladesh’s top export earners.

• Contribution to GDP: Around 3% of Bangladesh’s total GDP.
• Export Value: The sector has consistently earned over $1 billion annually in recent years, with a target to reach $5 billion by 2030.
• Employment: Over 850,000 people are directly or indirectly employed, with around 60% male workers and 40% female workers in manufacturing units.
• Ranking: Bangladesh is among the top 10 leather producers globally in terms of production volume.

 

🛠 Product Categories

Bangladesh’s leather industry offers a wide range of products:

1. Finished Leather – Cow, buffalo, and goat hides, known for durability and fine texture.
2. Footwear – The largest sub-sector, exporting to Europe, North America, and Asia.
3. Leather Goods – Bags, belts, wallets, gloves, and fashion accessories.
4. Industrial Leather Products – Safety gloves, aprons, and other protective gear for factories.

 

🌍 Export Markets

Bangladesh exports to more than 60 countries, with key destinations including:

• Europe: Italy, Germany, Spain, the UK
• North America: USA, Canada
• Asia: Japan, China, South Korea, India

Major international buyers include Apex Footwear, Picard, Bata, and Bay. Bangladesh has also attracted interest from high-end brands seeking cost-effective yet high-quality manufacturing partners.

 

💡 Strengths of the Bangladesh Leather Industry

1. Abundant Raw Materials – The country produces around 350 million square feet of leather annually due to its large livestock population.
2. Competitive Labor Cost – Lower wages than many competitors like China and India.
3. Skilled Workforce – Generations of experience in leather tanning and craftsmanship.
4. Strategic Location – Shorter shipping times to Europe and the Middle East.
5. Government Support – Recognition as a thrust sector under Bangladesh’s export policy.

 

⚠ Challenges Facing the Sector

Despite its potential, the industry faces several challenges:

1. Environmental Compliance

• The relocation to Savar Tannery Industrial Estate was meant to improve waste treatment, but the Central Effluent Treatment Plant (CETP) is still not fully functional to international standards.
• Failure to meet compliance can lead to export restrictions, especially from the EU.

2. Infrastructure Gaps

• Incomplete facilities in the tannery estate hinder production efficiency.
• Insufficient testing laboratories for chemical and quality checks.

3. Lack of Branding

• Most exports are under foreign labels; Bangladesh lacks globally recognized leather brands.

4. Limited Market Diversification

• Heavy reliance on a few major markets makes the industry vulnerable to demand fluctuations.

 

📜 Government Policies and Support

The Bangladesh government has recognized leather as a thrust sector and offers several incentives:

• Cash Incentives: Up to 15% for export earnings from leather goods.
• Tax Benefits: Duty-free import of certain raw materials and machinery.
• Infrastructure Development: Investment in the Savar Tannery Estate.
• Skill Development Programs: Training in tanning, footwear design, and production efficiency.

 

🚀 Opportunities for Growth

The global leather market is expected to grow steadily, and Bangladesh can capitalize by:

1. Focusing on Value-Added Products – Exporting high-end finished goods instead of raw hides.
2. Adopting Green Tanning Technologies – Using vegetable tanning and chrome-free processes to appeal to eco-conscious markets.
3. Building Local Brands – Developing Bangladeshi labels that can compete internationally.
4. Market Expansion – Targeting emerging markets in the Middle East, Africa, and Latin America.
5. Collaboration with Global Brands – Partnering with luxury brands for premium leather goods manufacturing.

 

🔮 Future Outlook

If Bangladesh addresses environmental compliance and branding, the leather industry could rival RMG as a top export earner. With sustainable practices, modern technology, and skilled labor, the sector could reach $5–7 billion in export revenue within the next decade.

The future will depend on government policy enforcement, private sector innovation, and sustainable development—ensuring that leather production is not only profitable but also environmentally responsible.

 

📌 Conclusion

The Bangladesh leather industry is a sleeping giant in the global market. It has the raw materials, skilled labor, and cost advantage to dominate in leather goods manufacturing. But for the industry to fulfill its potential, it must overcome compliance challenges, invest in branding, and focus on value addition.

If these steps are taken, Bangladesh could transform its leather sector into a world-class, sustainable industry—a source of national pride and a driver of long-term economic growth.