General

The tanning industry in Bangladesh took advantage of the rising prices of leather and leather products in the international market to survive the economic depression caused by the epidemic.

According to industry insiders, exporters of leather and leather products in most countries have to increase their prices due to the increase in raw material and transportation costs. However, Bangladeshi exporters enjoy a cost advantage because they stock up on large stocks of raw hides and provide foreign brands with competitive prices.

In the 2020-2021 fiscal year, Bangladesh's leather and leather products exports increased by 19%, and the export volume reached 568.88 million US dollars. Among them, leather exports increased by 21%, leather products increased by 14%, and leather shoes exports increased by 19%.

In this fiscal year, exports continued to grow. From July to September, the total export value of the tanning industry reached US$27134 million, an increase of 21%, returning to the level before the epidemic.

Md Saiful Islam, President of the Bangladesh Leather Products and Footwear Manufacturers and Exporters Association, said: “The global raw material prices and freight rates have soared. Because Bangladesh has accumulated a large stock of raw leather before the price increase, its products have been exported more. Competitive advantage. If the current trend continues, exports will maintain an increase of 20% in the future."

According to the "2021 World Footwear Yearbook", in 2020, Bangladesh is the world's 8th largest producer of footwear products (423 million pairs) and the 9th largest consumer market (366 million pairs). Bangladesh's footwear manufacturing is mainly for the domestic market. In 2020, only 72 million pairs of footwear products will be exported, ranking 16th in the world. Over the years, Bangladesh's leather industry exports have continued to grow substantially, but 2020 saw its first decline in a decade.

According to data from World Footwear, the global footwear market is worth US$394.12 billion, with China accounting for more than 60%.

In the past fiscal year, Apex Footwear, an important footwear exporter in Bangladesh, has seen a 67% increase in net profit to Taka 10.53 million. However, exports have been affected by the epidemic.

Syed Nasim Manzur, general manager of Apex Footwear, said: "We are in a recovery period. Exports have resumed in April this year. If the epidemic does not worsen, it is expected that exports will soon return to their pre-epidemic levels."

Manzur added: "But we need to increase our focus on new markets because we mainly rely on Europe and the United States."

Fortune Footwear, another 100% export-oriented footwear manufacturer, saw sales increase by 18% in the last fiscal year, while its exports fell by 23% in fiscal year 20. Apex tannery, a manufacturer of leather and leather products, has been at a loss until March this year. But in the fourth quarter of fiscal 2021, as exports grew, the company began to return to profitability.

In addition, because people's travel is restricted by the epidemic and the local market is severely affected by the epidemic, the sales of the local market brand Bata Footwear will drop by 41% in 2020. Now, it has gradually recovered from the impact of the epidemic, but it is far from the level before the epidemic. The company stated in its financial report that through discount promotions and inventory clearance, sales revenue increased compared with the same period last year.

According to estimates by industry insiders, the scale of the Bangladeshi footwear market is 170 billion taka, with annual sales of no less than 200 million to 250 million pairs, and the market is growing at a rate of 12% annually.