Photo: Messenger
The footwear industry, a potential export item of Bangladesh that witnessed growth in the past, is currently grappling with challenges as inflation affects global exports and imports.
Insiders believe that global consumers have reduced the consumption of various items, including footwear and leather goods.
Exports of the product dropped by 32.72 percent in the first half as the demand for leather products in the international market decreased due to high inflation.
According to the Export Promotion Bureau (EPB), footwear exports fell to $257.90 million from $383.31 million (YoY) in the H1 of July-December 2024 FY.
The sector had set a target for the 2024 FY leather and leather goods export at $703 million. The exporters aimed to export leather goods and footwear worth $10 billion by 2030.
“As world markets become unstable, the export of leather and leather goods continues to fall. Moreover, the largest markets in the EU are in an inflation crisis. This has resulted in the decline of leather and leather goods exports in adverse economic situations,” Syed Nasim Manzur, Managing Director of Apex Footwear Ltd, told The Daily Messenger.
He said that the potential sector needs the policy support of the government. If the sector receives a subsidy, it might grow like the RMG. In addition, Nasim wants a climate fund in the backward linkage sectors.
Belal Hossain, the former president of the Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh (LFMEAB), emphasized the government's role in financing the sector. He told The Daily Messenger, “We cannot ensure a water treatment plant for all the tanneries. If the government takes steps to provide financial support, the sector will contribute significantly to the economy.”
In the last couple of years, 40 percent of the 155 companies have stopped exporting due to complaint issues, according to LFMEAB.
Moreover, there is no policy on rawhide collection. The government has yet to provide the required facilities in the newly shifted Savar tannery.
Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue (CPD), said that as exports continue to fall regularly, it will be a challenge for the sector to overcome the economic crisis.
Meanwhile, the export of footwear reached $756.18 million in the 2022 FY, compared to $478.75 million in 2021 FY and $350 million in 2020.
Industry insiders think that if the export growth follows the trend, it would reach $1.5 billion by the end of the fiscal year. Unfortunately, the industry could not reach the target due to inflation.
Bangladesh has 2 percent of the world’s total livestock population and can meet 1 percent of the world market's leather demand.
The most promising markets for Bangladeshi leather, leather goods, and footwear products are Germany, Italy, France, Netherlands, Spain, Russia, Brazil, Japan, China, the UK, Singapore, Poland, the US, Canada, and Taiwan, etc.
Previously, exports depended on wet blue leather, made by separating the fur from the skin and preserving it with salt. However, if raw leather can be processed further to produce finished goods, it can add up to 90 percent value to leather goods.
Messenger/Disha
