Tannery industry still struggling 8 years after relocating to Savar from Hazaribagh

Highlights:

• Savar tannery estate still suffers severe pollution, untreated waste disposal
• Incomplete CETP contaminates Dhaleshwari River and surrounding waterways
• Industry leaders demand separate ministry or powerful governing board
• Bangladesh lacks sufficient LWG certification for premium export markets
• Tanneries sell cheaper leather to China without direct Western exports
• Experts say Bangladesh could exceed $5 billion leather exports

The tannery industry continues to face major challenges in environmental compliance, waste management and access to global markets nearly eight years after its relocation from Hazaribagh to Savar to reduce pollution and ensure planned industrialisation, according to stakeholders. 

The same environmental problems once associated with Hazaribagh are being repeated in Savar because the Central Effluent Treatment Plant (CETP) remains incomplete and ineffective, they alleged.  

As untreated waste continues to pollute nearby rivers, sector leaders have renewed calls for the formation of a separate ministry for the industry or a powerful board to oversee policy, planning, environmental compliance and export growth.

The demands were raised at a discussion "Leather Industry in Crisis: Exploring Ways for Recovery," at the Economic Reporters' Forum auditorium yesterday.

Infograph: TBS

LIDFB Convenor Sadat Hossain Salim said the CETP in Savar has yet to become fully operational, resulting in untreated wastewater flowing into the Dhaleshwari River and contaminating nearby rivers.

"For years, discussions have taken place, but little progress has been made. Now the premier must directly intervene to resolve the sector's problems," he said.

Criticising a recent remark by Industries Minister Khandakar Abdul Muktadir on leather export, he said, "Simply saying that $12 billion in export earnings is possible is not enough. Authorities must explain how this target can be achieved and address the sector's structural problems."

He noted that unlike the garment sector, which depends heavily on imported raw materials, leather is a domestic resource capable of generating up to 40% value addition through leather goods manufacturing.

The LIDFB placed a 13-point reform proposal which included preparing long-term development plans through expert committees, introducing short-term loans for rawhide preservation during Eid-ul-Adha, setting up government-run cold storage facilities and rawhide collection centres, increasing domestic use of leather products, and strengthening international marketing and export capacity.

According to data, more than 9.1 million animals were sacrificed in the country last year. Industry insiders said 40-45% of the country's annual rawhide supply comes during Eid, making proper preservation and management critically important.

To address this issue, LIDFB proposed establishing 10 to 15 modern government-run "rawhide preservation hubs" across the country during Eid to ensure proper collection, storage and management of hides. 

It also recommended establishing at least 10 to 15 government cold storage facilities, either directly managed by the state or operated through lease agreements, to preserve rawhide for longer periods.

According to data, the country's leather sector exports rose to $1.145 billion in FY2024-25. Meanwhile, global market research firm Fortune Business Insights estimated the global leather goods market will reach $738.61 billion by 2030.

Despite this potential, Bangladesh continues to lag in obtaining Leather Working Group (LWG) certification, considered essential for entering premium European and American markets. 

Only eight Bangladeshi companies have achieved LWG certification, said Md Afzal Hossain, a sustainable leather expert.   

He said, "When initiatives are taken from the highest levels of the government, many problems can be solved. For this reason, it is important to draw the prime minister's attention to important issues."

Although nearly 140 of the 162 allocated tanneries in the Savar Tannery Industrial Estate are operational, most cannot export directly to Europe and the US due to the lack of certification.

As a result, many are forced to sell leather to China at lower prices, where it is processed and later exported to Western markets at a much higher value.

Abdul Muttalib, a professor of the Institute of Leather Engineering and Technology at the University of Dhaka, said, "If Bangladesh captured even 1% of the global market, exports would exceed $5 billion."