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Dhaka Tribune

Can a Bangladeshi leather shoe company exporter earn $100m in the next few years?

Craftsman Footwear has already received two ISO certifications for product quality and factory environment

Update : 02 Nov 2023, 07:24 PM

The goal of Gazipur-based Craftsman Footwear and Accessories Limited, a 100% export-oriented shoe manufacturer, is to progressively export shoes valued at $50-$100 million over the next several years.

They have also taken the initiative to raise roughly Tk5 crore from the stock market in order to improve the factory's manufacturing capacity in this regard. 

They set a goal to export goods worth $8–$10 million in the current fiscal year, having shipped $7 million worth of leather goods in the previous fiscal year (FY22).

The company's managing director, Sadat Hossain Selim, was hopeful when speaking to journalists visiting their factory. 

Craftsman’s journey 

Ever since its inception in 2017, Craftsman has operated as a manufacturer solely focusing on exports. The factory unit is in Joina Bazar of Sreepur Upazila of Gazipur. 

The unit began with 35 employees and now employs over 750 people in its 100,000-square-foot factory. About 340,000 pairs of shoes have been exported by the company so far.

In addition to founding Craftsman and acting as its managing director, Sadat Hossain Salim was the president of Dhaka Club Limited.

Additionally, he has professional experience working for several domestic and international companies, including Apex, Pertex Group, HRC Group, and Duncan Brothers. 

Rezina Begum serves as the chairman of the company while Sara Hossain, Rumana Begum, Mahe Alam, Sabrina Zaman, Md Zahirul Islam and Abu Saeed are directors.

“80% of the shoes available in the country are made of synthetic or artificial leather. As a result, there is huge potential for manufacturing, export and growth of leather products in the country. But we are unable to use this possibility,” said Sadat Hossain.

Current capacity of the factory

Mahe Alam, director of operations, said that their facility can already make more than 1500 pairs of shoes in a single shift per day. 

In the following six months, the facility is supposed to begin producing shoes in two shifts.

According to Craftsman Footwear officials, there are a minimum of six phases involved in the manufacturing process of leather shoes. 

First, leather is brought in and kept in the factory's bonded warehouse. Next, the employees cut and thickness the leather based on the shoe design and the needs of the customer. 

After that, the shoe's upper is sewed together with it, and a different machine is used to make the shoe's soles. Shoes are packed for shipping after being joined in the lasting department.

State-of-the-art factory 

Craftsmen put cutting-edge machinery they had purchased from overseas in their factory. Italian manufacturing is well-known for producing leather and leather items, and Craftsman Footwear is adopting this approach as well. 

In addition to Italy, Germany and China are providing technological support.

Another director, Zahirul Islam, stated that in their factory, skilled foreign and domestic designers create a variety of designs of shoes that meet global standards. 

Some of the best authorized and compliant tanneries in Asia provide the leather for their shoes. 

Additionally, they purchase leather from Reef Leather, a domestic tannery in Chittagong that has been approved by the Leather Working Group (LWG), a worldwide certification body for the leather industry. 

Craftsman Footwear has already received two ISO certifications for product quality and factory environment. 

They also have certificates from C-TIPAT and Amfori. For the convenience of the workers, the corporation has set up a canteen, a healthcare facility, a child care center, and a prayer room.

Moreover, they have a training facility close to the factory where unskilled workers can receive training before joining. 

The majority of the workers are locals. Sadat Hossain said that it has expedited employment in the neighborhood in this regard.

For its clientele, the company produces a wide range of shoes, including formal, casual, oxford, moccasin, derby, and high heels.

Currently, they export shoes to Italy, Germany, Sweden, Spain, Belgium, and the Netherlands. 

Their customers include some of the world’s best-known brands such as Bata, Hush Puppies, One Sprint, Klondike, Tata Italia, Primadonna, Pace, Fifth Avenue, Parato, Excellent and Glaudio Conti.

Craftsman eyes stock market to arrange capital

Sadat Hossain Selim said that they exported shoes for $7 million in FY22. 

The Ukraine-Russia war has somewhat reduced demand in the European market. He anticipates exporting up to $8 million in the current fiscal year.

“In the next two to three years, we want to raise the export volume to a sufficient level. For this, we intend to construct new production buildings and separate warehouses. We owe a sizable sum to the bank as well. Furthermore, interest rates have lately increased at banks as well. Thus, we wish to arrange capital from the stock market,” he continued.

He also said that they have already submitted application to the BSEC for enrollment in the SME board. 

“We will be able to collect Tk5 crore from the market through 50 lakh shares of Tk10, which will be spent on the company's modernization, expansion, and bank loan repayment,” he went on.

Green Delta Capital Limited (GDCL) is acting as the issue manager to bring the company to the capital market, he added.

Challenges in the sector

Sadat Hossain Selim said that the leather sector is dealing with some difficulties. 

Among them, the non-compliant issue is the biggest because if a tannery does not have a complete and functional CETP then they fail to obtain a LWG certificate, which in turn means less orders.

In order to address the problem, the authority ought to replace the Savar tannery's non-operational and incapable CETP.

"Even though our nation is a significant supplier of raw hides, we are losing to China, Pakistan, and India in the competitive market because we do not have LWG-certified leather producers," he continued.

He also urged to take initiatives for skill development, upscaling, vocational training arrangements for the workers as the leather sector is an extremely worker-intensive industry.

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