Power rationing: Savar tanneries counting huge production losses

Highlights:

• Tanneries already suffering losses due to
• Regular load shedding
• Fuel oil price hike
• Instability in the global market triggered by Russia-Ukraine war
• Decision of 3-day closure every week has added to the crises
• Authorities say the decision came after discussion with stakeholders
• Large portion of rawhides collected this year is still unprocessed and wasting
• Tanners say Bscic failed to make CETPs effective and pressuring them instead

Tanneries in the Leather Industrial City in Savar have of late been facing trouble due to the recent load shedding crisis, fuel oil price hike, and instability in the international market triggered by the Russia-Ukraine war.

And now a decision to stop production for three days every week for all the factories under a rationing system to prevent the overflow of the central waste treatment plant of the industrial area has come as a big blow threatening the survival of the industry.

The rationing system was imposed from 15 August by Dhaka Tannery Industrial Estate Waste Treatment Plant Company Ltd (DTIEWTPCL), the regulatory body of CETPs (common effluent treatment plants), on the claim of stopping environmental pollution.

Tannery owners say stopping production for three days a week is suicidal for the country's leather sector. If this continues, the country's second largest export sector will be up against disaster soon.

They say a large quantity of the rawhides collected during the last Eid-ul-Azha is unprocessed and still lying in warehouses in Hemayetpur, Savar.

On 10 August, a letter signed by Mostaque Ahmed, managing director of DTIEWTPCL, said that each of the three Effluent Pumping Stations (EPS) of the leather industrial city in Savar would be closed for three days per week one after another. Production in the tanneries under each EPS would also be stopped on these days.

The letter mentioned that this rationing system will be effective from 15 August to 30 September.

Later, on 22 August, another letter was issued saying the rationing system will continue until further instructions.

However, tanneries have failed to limit the production of liquid wastes to 30 cubic metres per tonne and 25,000 cubic metres per day despite repeated notices regarding making the waste treatment system more sustainable.

Inspectors from the National River Conservation Commission and the ministry of environment, forest and climate change have expressed their dissatisfaction over the situation. As a result, it has been hard to obtain CETP compliance and environmental clearances, the letter reads.

Mostaque Ahmed told The Business Standard that the decision on the rationing system has been taken after discussions with all stakeholders, including the leaders of Bangladesh Tanners Association (BTA), in order to stop environmental pollution.

"The factories have not reduced the consumption of excessive water despite repeated warnings, " he said.

Imam Hossain, managing director of ABS Tannery Ltd, termed the decision to stop production in the tanneries three days per week suicidal.

"During the business season we do not have any scope to stop production for a single day. The decision has already cost me a lot of leather which I could not process in time. We have collected more leather this year. If I knew that we would face this situation, I would not have collected such an amount," he said.

"We are facing multiple crises, including instability in the international market. We have been forced to buy chemicals with duties of up to 35% without bond license facilities. Now, we have to stop production for three days a week. I do not know how to continue doing business in this situation," said Imam Hossain. 

Nurul Islam, owner of RK Leather Complex, said, "Usually, we complete processing wet blue (moist chrome tanned leather) from leather preserved with salt within two months after Eid. But this year we have not been able to process even half of the leather." 

He said "Around 60% of 1,20,000 pieces of rawhide collected this year has been processed so far. The rest of the leather is lying in the factory and is being damaged due to load shedding and production closure."

He said that the industry has not faced such a disastrous crisis in the last four decades. 

Sakhawat Ullah, general secretary of BTA and owner of Salma Tannery, said that every entrepreneur in the industry is counting huge losses due to the decision of three day closure per week.

Mokhleshur Rahman Ripon, CEO and technical adviser of Samina Tannery told TBS, "After the first stage of tanning, the blood-stained rawhide can be preserved for a maximum of one month. If you cannot process it within this time, it requires re-washing and re-salting, which increases the costs."

Entrepreneurs say that the entire sector is under threat today due to the failure and disorganised work of the Bangladesh Small and Cottage Industries Corporation (BSCIC).

They claim that the factories were shifted to Savar from Hazaribagh to maintain environmental safety by reducing pollution. But BSCIC is now putting pressure on the tanneries instead of making CETPs effective.