Tannery estate: Pollution hinders untapping of export potentials
Pollution has emerged as the prime setback on the way to untapping the export potentials of the leather and leather products in Bangladesh.
The Central Effluent Treatment Plant (CETP) of the Tannery Industrial Estate at Hemayetpur in Savar is yet to begin operation at its maximum capacity, while no permanent dumping yard has been developed yet for solid waste disposal.
Hence, pollution remains a bottleneck for the industry as it restricts the tanneries from obtaining international quality certifications and grabbing the global market. And Bangladesh is failing to tap into the export potentials of the leather sector.
The government, however, has a plan to scale up exports of leather and leather products. At the maiden meeting of the new cabinet, Prime Minister Sheikh Hasina issued necessary instructions for diversification of exports and exploration of new markets for the leather products.
The authorities had provided special assistance to the readymade garment sector for its development. In the same way, they are now considering special initiatives and assistance to promote exports of three particular commodities – leather and leather products, jute and jute products, and agri-products.
In 2003, the government undertook a project to shift the tanneries from Hazaribagh in Dhaka to a planned industrial estate on 200 acres of land at Hemayetpur in Savar. It has been 21 years since then, but the authorities could not make the leather industry environment-friendly.
Industries Minister Nurul Majid Mahmud Humayun said the government laid emphasis on increasing the leather sector exports. Speaking to Prothom Alo on Tuesday, he assured that all possible assistance, including increased stimulus, will be arranged to promote exports of leather products.
Regarding the CETP, he said it is not a major setback in the process of increasing exports. Still, the government is working to improve the capability of the CETP.
However, Abu Yusuf, executive director of the Research and Policy Integration for Development (RAPID), believes that the leather sector of Bangladesh is yet to be fully prepared to grab the international market.
He told Prothom Alo that stimulus and other facilities would encourage local manufacturers, but foreign buyers will not compromise on environment issues and product quality. Hence, the waste management system should be fixed ahead of all. Once it is done, exports of leather and leather products can easily be taken to $10-12 billion.
CETP incomplete even after 21 years
In 2003, the government undertook a project to shift the tanneries from Hazaribagh in Dhaka to a planned industrial estate on 200 acres of land at Hemayetpur in Savar.
It has been 21 years since then, but the authorities could not make the leather industry environment-friendly. Since the Tannery Industrial Estate’s CETP is yet to be fully operational, the nearby Dhaleshwari River is being polluted with the leather wastes.
Against such a backdrop, the leather sector is failing to solidify its foothold in exports, despite having an adequate local supply of raw materials. The tanneries here deem ineligible for the Leather Working Group (LWG) certification due to pollution. The certification is a must for selling leather and leather goods to the leading global brands.
Some tanneries would obtain LWG certificates after fixation of the issues associated with CETP and solid waste management. It would enlarge the leather market in the country and gear up exports gradually.
Traders and exporters believe that there is a significant potential to increase the export of leather and leather products. The prevailing obstacles are also identified. The CETP needs to begin full-swing operation and modernisation. Besides, a dumping yard is required for solid waste management in a planned way. After improvement on some other grounds, the tanneries need to submit applications for LWG certification.
Currently, there are 142 tanneries in the tannery industrial estate in Savar, with Simona Tanning being the only one to receive LWG recognition last November. The tannery produces leather from the crust at the finishing stage and has its own effluent treatment plant (ETP). The other tanneries in the estate use CETP, and none has become eligible for LWG recognition yet.
Outside the estate, Apex Footwear, Riff Leather, ABC Leather, Superex Leather, and SAF Industries have received LWG certification. Industry insiders noted good business performance of the LWG-certified entities.
Tiny share in global market
Bangladesh is the second-largest garment exporter in the world, despite having no local source of raw materials. The total garment exports amounted to $46.99 billion in the last fiscal year.
In the leather sector, there is an abundance of raw materials in the country, but exports are only $1.22 billion, down by 38.5 times from garment exports.
According to Fortune Business Insights, the global market for leather products was estimated at $468 billion last year, with the European market alone worth $166 billion. The market is expected to swell to $738 by 2030.
However, the current share of Bangladesh in the global market is only 0.26 per cent.
Tannery owners said the LWG-certification is a precondition for exporting leather products, including shoes, to Europe and many other countries. Now, the tanneries without the certificate export each square foot of processed leather at an average price of 85-90 cents. With LEG-certifications, they could export the products to the European market at double the price.
China chased in on the situation and emerged as the biggest buyer of Bangladeshi leather.
Situation in the estate
During a spot visit on Monday, solid wastes of the tannery industrial estate were seen being dumped into the temporary dumping yard. It was in an open space and was producing a strong stench.
On the other hand, the liquid wastes were being pumped into the nearby Dhaleshwari River, after treatment at the CETP. The CETP's daily liquid waste treatment capacity is 25,000 cubic meters, while the tanneries regularly produce 17,000 cubic meters of waste on average, and 40,000 cubic meters on the occasion of the Eid-ul-Azha.
The tannery industrial estate has been implemented by the Bangladesh Small and Cottage Industries Corporation (BSCIC). It said in a report in September last year that the CETP is operating at below half of its capacity.
Golam Shahnewaz, managing director of Tannery Industrial Estate Waste Treatment Plant Company (DTIEWTPC), said they activated some machinery of the CETP last month, raising its operating capacity above 50 per cent. Also, they are trying to take the capacity to 80 per cent within the next four months.
Tannery traders said a meeting took place at the prime minister’s office (PMO) recently, with the participation of leather sector entrepreneurs and others concerned. They demanded an extended timeframe for bond licenses and audit, arrangements for loans with easy terms, and assistance for some factories to build their own ETP.
The general secretary of Bangladesh Tanners Association, Sakhawat Ullah, said to increase leather and leather product exports, firstly, the CETP and solid waste management in the tannery estate must be improved to the international standards. It is not a complicated task.
He further said some tanneries would obtain LWG certificates after fixation of the issues associated with CETP and solid waste management. It would enlarge the leather market in the country and gear up exports gradually.