Experts for partnership with Vietnam to develop leather industry

Salman F Rahman, private industry and investment adviser to the prime minister, has expressed interest in working in partnership with Vietnam to develop the leather industry.

He said Vietnam has made progress in the leather industry but it does not have raw materials.

"On the other hand, although there are a lot of raw materials in our country, we cannot use them," he said.

Salman said this at a webinar organised by the Economic Reporters Forum on Tuesday.

Syed Nasim Manzur, head of Apex Group, said, "Despite having raw materials for leather products, we were unable to make the expected progress. However, despite the lack of raw materials, exports in this sector in Vietnam have gone a long way."

He demanded that responsibility for the development of this sector be given to a single organisation.

In 2017, the tanneries were shifted from Hazaribagh in the capital to the leather industrial city of Hemayetpur in Savar. Many tanneries were closed for some time due to the relocation and setting up of new factories. As a result, many buyers started buying products from other countries.

The main goal of relocating the factories from Hazaribagh was to protect the environment. However, as the central effluent treatment plant (CETP) set up in the leather industrial city is not functioning properly, and other infrastructure has not been developed, it has not been possible to protect the environment. Therefore, the potential of the leather industry cannot be utilised.

The novel coronavirus has worsened the situation. It has reduced the demand for all types of products and services worldwide. The demand for leather products has declined significantly.

Speakers at the webinar raised the issues of the leather industrial city not being fully developed, a lack of solid waste management and environmental pollution due to the dumping of waste into the River Dhaleshwari. They said Leather Working Group (LWG) certification has not been obtained for these reasons, adding that action should be taken against those responsible for this.

Some said considering the current reality, the project is going to end in a failure. In this situation, they called upon the authorities concerned to take immediate and appropriate steps to safeguard the future of this sector as the second major export sector.

Blaming the contractors implementing the project for the current situation of the leather industrial city of Savar, Salman said they did not do their work properly.

Also, he said there was a problem as the tanneries were forced to move from Hazaribagh to Savar as per the court order before the project was ready.

"I went there last year and saw that the project, including the CETP, was not ready yet," he explained.

He said excessive water is being used in the project at present. "If it is not controlled, we will be forced to impose a tax on water."

Salman said a company was formed for the management and administration of the CETP, and a professionally qualified person would be appointed as its executive.

"Tannery owners need to keep in mind that they have to be involved in the management of the company. The government will just provide subsidies. The companies that will set up their own ETPs in Savar or elsewhere will be given incentives from the government. Now, the leather industrial city's main problem is solid waste, and the government is working on that. Already, a company was hired and later dismissed. New tenders have been invited."

He said a quick partnership with Vietnam is needed to advance the leather sector. "This is because even though Vietnam has progressed in the leather industry, it does not have raw materials."

Salman said, "Bangladesh will benefit if the new list of products granted duty-free entry by China includes leather products. The capital market has become dynamic since the new chairman of the Bangladesh Securities and Exchange Commission took over. In the last few years, the stock market received various criticisms, which is not the case anymore. It is necessary to increase domestic and foreign investment for the economic development of the country. A strong and dynamic capital market is needed to attract investment so that investors can withdraw their money if they want. To this end, the capital market is the best system."

Commerce Secretary Dr Jafar Uddin told the webinar the government is working for the development of the leather sector. "The export readiness fund is going to be launched. This will benefit entrepreneurs in the sector."  

Mohiuddin Ahmed Mahin, president of the Bangladesh Finished Leather, Leather Goods and Footwear Exporters Association, said not all those responsible for implementing the government's vision are working properly. "That is why the tannery industry is now in its present state. Entrepreneurs need to be encouraged. Therefore, short-term loans should be made long-term, compliant factory awards should be given out and non-compliant factories should be subjected to punishment."

The chairman of Research and Policy Integration for Development (RAPID), Dr Mohammad Abdur Razzaque, said a realistic policy is needed considering export and domestic market demands.

"Additionally, the leather industrial city should be developed as a full compliance project for exports," he added.

He recommended increasing foreign direct investment in the leather sector to boost exports.

Professor Dr Mohammed Abu Eusuf of the Department of Development Studies at the University of Dhaka said compliance is essential to take the leather sector forward.

"Environmental protection should not just stay on paper. People have to see and understand that the leather industry is not harming the environment. This is what we need to ensure," he said. 

He continued that an independent body needs to be set up under the Prime Minister's Office or the Bangladesh Export Processing Zones Authority (Bepza) that will work solely to develop the leather sector. "Like other export sectors, long-term policy benefits must be offered to the leather sector."

Bangladesh Tanners Association President Md Shaheen Ahmed said the leather industry is a victim of policy discrimination and that needs to stop. "The leather industrial city needs permanent measures to remove solid waste. Solid waste is ruining the environment. There are many problems with the CETP. If these problems are not solved, tannery owners will not be able to cope."

Dr Mohammed Mizanur Rahman, director of the Institute of Leather Engineering and Technology at the University of Dhaka, said they were tailoring the curriculum according to industry demand.

Abul Kalam Azad, president of the Tannery Workers Union, demanded implementation of the existing labour law in the tannery industry as well as ensuring overall compliance.

Kazi Faisal bin Siraj, country director of The Asia Foundation, delivered the welcome address at the webinar while Economic Reporters Forum General Secretary SM Rashidul Islam was the moderator. Journalists took part in an open discussion. Saiful Islam Dilal, president of the organisation, presided over the event.

The Asia Foundation and research firm RAPID were co-organisers of the webinar. The keynote paper was presented by RAPID Chairman Dr Mohammad Abdur Razzaque and Executive Director Dr Mohammed Abu Eusuf.