Govt to allow 6 cos to export rawhide, wet blue
They have orders worth $100m from countries including China, Italy and Japan
HIghlights:
- 6 companies have received orders for rawhide and wet blue from countries in the EU and East Asia
- Exporters have to ensure quality through consultation with industry associations
- Domestic market saw sale crisis for rawhide of sacrificial animals in past few years
- Tanneries have huge stockpiles of unsold leather
The government is going to permit six companies to export rawhide and semi-processed leather – widely known as wet blue – as limited local demand leads to wastage of the basic raw material during Eid-ul-Azha.
The Ministry of Commerce has shortlisted these companies that want to export around 7 crore square feet of rawhide and wet blue worth around $100 million in three years.
Keep updated, follow The Business Standard's Google news channel
The export of rawhide has been banned since Bangladesh's independence to protect the tannery industry here. Export of wet blue has also been stopped since 1989.
The companies have informed the ministry that they have received orders for rawhide and wet blue from several countries in the European Union and East Asia, including Italy, China and Japan.
There are also orders from India, but the ministry is reluctant to export leather there – keeping in mind the issue of smuggling.
Once exports start, the government will review the impact on the domestic market and decide whether to continue with the export permit.
Usually, the skin of a large cow is 35-40 square feet, that of a medium size is 25-30 square feet and small size 16-20 square feet. Seven crore square feet of leather will need about 20 lakh cows of large size.
The commerce ministry announced it would start allowing exports of rawhide and wet blue on a case-to-case basis before Eid-ul-Azha this year.
For the past few years, there has been a crisis in the domestic market sale of rawhide of sacrificial animals and the tanneries have been filled with huge stockpiles of unsold leather, prompting authorities to explore the possibility of leather exports.
Officials from the commerce ministry said several companies have applied for export permission but the ministry is currently considering the applications of six of them.
They said the ministry at a meeting on 24 November decided to allow these companies to export rawhide on some conditions.
"We have decided to allow export of rawhide and wet blue on some conditions. At the next meeting, the companies will be given final permission to export," Additional Secretary of the Ministry of Commerce (Exports) Md Obaidul Azam told The Business Standard.
A meeting of the Ministry of Commerce with representatives from the Bangladesh Tanners Association and Bangladesh Finished Leather, Leather-goods and Footwear Exporters Association decided to ensure strict international standards in the export of rawhide and wet blue.
Exporters need to consult with the industry associations to ensure quality. However, it is not mandatory for them to be members of these two organisations.
The export should be done by taking advance payment through LC or TT. The commerce ministry will check if the exporter owes money to the tannery, warehouse keeper or anyone else concerned before permitting export. If the arrears are not paid, export permission may not be given.
Leather Industries of Bangladesh Limited said they have orders for 3.70 crore square feet of wet blue from Italy. The organisation has applied to the commerce ministry for permission to export the wet blue in the next three years.
Kalam Brothers Tannery Ltd has received orders for 1.55 crore square feet of wet blue from China and EU countries. They have also applied to the ministry to export it within the next three years.
Quader Leather Complex has sought permission to export 1.30 crore square feet of wet blue to China and the EU in three years.
Sajedul Khair, director of Kalam Brothers Tannery, told TBS, "China, India, Japan and three countries in the European Union have shown interest in importing wet blue from our company.
China, India, Japan and three countries in the European Union have shown interest in importing wet blue from our company
"Buyers from countries affected by the Covid-19 pandemic are also showing interest in importing wet blue from us. This is a very positive development for the leather industry in Bangladesh."
AKS Investment has received orders to export 20 lakh square feet of wet blue from East Asian countries.
During Eid-ul-Azha this year, an organisation named Rumi Enterprise bought a large amount of rawhide and kept it in its warehouse. The company has applied for permission to export 50,000 units of rawhide.
Badal Traders Hide and Skin Merchant has sought permission to export an unspecified amount of salted rawhide and wet blue to China and India.
