Due to poor compliance, the price of domestic leather products in the international market is dropping by 30%-35%. This situation also affects the local market, where fair prices for leather goods cannot be ensured. Amidst these challenges, exports are not increasing significantly. Seven years ago, the export income from the leather sector was around $1 billion, and now it is only $1.2 billion. Environment Minister Saber Hossain Chowdhury on Thursdays discussed how exports can reach $10-12 billion in the next five years under these circumstances.
He expressed these concerns at a high-level national dialogue on “Greening the Tannery and Leather Sector of Bangladesh,” organized by Solidar Suisse, Prokriti o Jibon Foundation, OSHE Foundation, and the European Union in the capital on Thursday.
Regarding the upcoming peak season of leather processing (Eid-ul-Adha), he suggested that tannery owners should ration the use of the CETP (Central Effluent Treatment Plant) among industries in the four blocks of the tannery estate. Although the tannery authority claims the CETP's capacity is 25,000 sqm per day, its actual capacity is around 14,000 sqm, and it decreases with consecutive use. Rationing the CETP's use may help reduce pollution slightly.
Chowdhury also acknowledged that the partial transformation of the tannery and the incomplete CETP was a collective mistake. He urged stakeholders to stop the blame game and take collective action to restart the process, emphasizing the need for long-term planning rather than short-term solutions. He doubted that the sector could improve without upgrading the CETP.
He suggested seeking technological assistance from the EU and other developed partners to make the tannery sector viable and profitable.
Charles Whiteley noted that Bangladesh's economy is growing rapidly and becoming more integrated with the global market and the EU through trade and development collaboration. With Bangladesh graduating from LDC status in 2026 and the end of the three-year grace period, existing EU trade rules will apply. He emphasized the importance of complying with international standards, as new EU legislation will significantly impact the industry in Bangladesh. The EU is working to support the government and all stakeholders in preparing for these changes.
He also said that the due diligence directives comply with human rights, social issues, and environmental issues.
Moreover, there is ultimately a penalty if they don't comply with the above directives.
The leather is a huge potential for growth if the sector manages to meet environmental and social standards, he added.
Ainun Nishat, professor emeritus at Centre for Climate Change and Enviornmental Research of Brac University, said that if they want to increase exports, they must produce products as per the buyers' prescription. In tis regard, a compliant business process and compliant factories are mandatory as a bargaining position.
“Government is serious to make leather sector sustainable. It is important to bring an entire change in both technical, social, and environmental aspects,” he added.
He also said that skill and capacity also important to make industry green and sustainable. Entrepreneurs should focus on make industry MRV (measurable, reportable, verifiable).
Regarding CETP, he said that apart from government-formed CETP, the entrepreneurs can establish small single ETP or collective ETP by themselves.
“To make industry green, it is important to ensure worker’s health safety, safe sanitization and proper hygiene maintenance as per law and regulations,” he added.
Speakers also said that the leather is the second largest export sector in Bangladesh which employs 1 million people, and is an important sector for the country's development. .
It is possible to reach up to $12 billion by 2030.
Amanullah of Solidas Suisse said that Bangladesh will graduate from the LDC status in 2026 and in this regard, export diversification, environmental protection etc are important.
He also said that the PM is also giving priority to the leather sector. There is an export potential of $10-$12 billion yearly. Though the raw hides are produced in Bangladesh, the country cannot taking advantages of it.
“We cannot properly manage the waste and we cannot make it as asset. In this regard, united efforts of the government and the entrepreneurs are a must,” he added.
Zaki Rezwana of OSHE Foundation said that Bangladesh leather is internationally popular for its high-quality fine-grain leather uniform, fiber structure, smooth feel and natural texture.
She added saying that the main problem of the country’s leather sector is the lack of compliance. That's why this opportunity is not being used. In the international market, the products produced in Bangladesh are getting lower prices.
She also said that an international organization called Leather Working Group (LWG) certificate is crucial for export-oriented leather industry companies like waste management, eco-friendly and green leather sector.
Leaders and activists from various environmentalist organizations, and government officials from various ministries and departments were also present at the dialogue.
