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Bangladesh sees leather trade growth

DHAKA: Bangladesh is modernising its leather industry and plans to export $1 billion worth of leather by 2003, four times higher than current export earnings, a key industry official said on Monday.

"We expect to be able to export $1 billion worth of leather and leather goods in the year 2003 when the modernisation programme will be completed," said Abdus Sattar Bhuiyan, president of Bangladesh Finished Leather, Leather Goods and Footwear Exporters' Association.

Leather is Bangladesh's third biggest export item. The country exports leather and leather goods worth $250 million, mainly to Italy, Thailand, South Korea, Brazil, France, Germany and Japan, Bhuiyan told Reuters in an interview.

He said the World Bank offered $39.22 million to finance the modernisation of 187 of the country's 207 leather factories in Dhaka's sprawling Hazaribagh area.

A U.N. development programme is offering technical support under the project.

Bhuiyan said the modernisation project also intended to reduce environmental hazards and improve the living conditions of more than one million residents in and around Hazaribagh.

Industrial waste and chemicals from Hazaribagh tanneries are mostly released to the Buriganga river, polluting the water and threatening the environment in and around the Bangladeshi capital, environment officials said.

The population of Dhaka is estimated at more than nine million.

Bhuiyan said Bangladesh exported only finished leather and leather products, mainly footwear.

"Our products have a strong and growing demand in global markets because of their quality...but we face stiff competition from India and Pakistan," he said.

He said Italy alone imported 60 percent of Bangladesh's total export of leather and leather goods. Bhuiyan said Italy was helping Bangladesh set up a footwear design and development institute but he did not give further details.

Bangladesh, which declared the leather industry a key export sector after readymade garments and jute, has also undertaken a 330 million taka ($6.47 million) expansion and modernisation programme of its own.

He said annual availability of hides and skins in the country is estimated at 190 million square feet.

"The leather industry is one of the most promising export sectors in Bangladesh," Sattar said, adding that 15 percent of the export income is spent on importing chemicals for the factories.

"We can raise our exports to any volume because the demand is unlimited and there is no quota restriction for our products."

About five million people are involved directly or indirectly in the Bangladesh leather sector, Bhuiyan said.

Bangladesh's total annual exports are around $5.5 billion, officials said.-Reuters