The leather industry could emerge as a critical economic stabiliser through export expansion, employment generation and higher value addition.
“History rarely waits twice for a nation. Bangladesh now stands at a defining crossroads,” said Sadat Hossain Salim, hailing the sweeping electoral mandate secured by Prime Minister Tarique Rahman and expressing strong optimism about the country’s economic trajectory under the new administration.
Speaking at The Daily Observer’s National Print Dialogue titled “Ballot to Balance Sheet: The New Government, New Vision”, the leading leather goods manufacturer said the electorate had delivered not only a political verdict in the much-awaited February general election, but also a clear demand for economic justice, industrial renewal and inclusive prosperity.
He argued that the leather sector�"long overshadowed despite being one of Bangladesh’s most resource-rich export industries�"now stands at a strategic inflection point and could become a central pillar of the new government’s growth strategy.
At a time when Bangladesh is grappling with inflationary pressure, weakened external competitiveness and widening inequality, Selim said the leather industry could emerge as a critical economic stabiliser through export expansion, employment generation and higher value addition.
“Leather is not merely an export commodity; it is a national industrial asset,” he said, urging the government to elevate the sector as a priority growth engine capable of strengthening foreign exchange earnings and industrial diversification.
Salim, also former president of Dhaka Club and Managing Director of Craftsman Footwear & Accessories Ltd, noted that Bangladesh currently meets around 3.5% of global raw leather demand and already holds a significant position in global supply chains. However, he warned that structural inefficiencies continue to limit its potential.
He said the sector produces roughly 350 million square feet of leather annually and manufactures around 378 million pairs of shoes, supported by a domestic footwear market valued at nearly BDT 170 billion. Yet this production base, he argued, has not translated into proportionate export earnings.
Between July 2023 and May 2024, leather exports stood at approximately US$961.49 million, marking a 14.17% year-on-year decline, according to World Footwear data. Leather footwear exports fell even more sharply by 25.92% to US$477.24 million, falling nearly 30% short of strategic targets.
Despite this short-term decline, long-term projections remain positive. Market forecasts suggest Bangladesh’s leather sector could grow at an average annual rate of 8.9% between 2020 and 2026, potentially reaching US$7.3 billion. The luxury leather segment is also expected to grow steadily at around 2.51% annually between 2025 and 2029.
However, Salim warned that the gap between potential and performance remains wide. He said nearly 85% of exports are still concentrated in semi-finished leather, while only around 15% consist of higher-value finished goods such as shoes, bags and accessories�"limiting profitability and global brand positioning.
He emphasised that the sector’s competitiveness is being constrained by weak branding, limited design capacity and insufficient value addition, despite its strong domestic raw material base.
In response to these challenges, Selim welcomed the government’s early initiatives to expand industrial activity, revive dormant factories, diversify exports and create employment opportunities. He also referenced the draft Bangladesh Leather Industry Management Act 2024, which proposes the creation of a dedicated authority to coordinate sectoral development.
However, he stressed that policy intent must now be matched by execution. “In the past, the leather sector remained on the sidelines of national planning, resulting in underperformance in a high-potential industry,” he said, urging sustained, structured and priority-based policy support.
A central concern remains the relocation of tanneries from Hazaribagh to the Savar Leather Industrial Park, initiated in 2017 to address environmental degradation. While the move was widely viewed as a necessary reform, Selim said its implementation has fallen significantly short.
He pointed to the Central Effluent Treatment Plant (CETP), which remains critically underperforming. Designed to treat industrial wastewater, it processes only around 25,000 cubic metres per day, while an estimated 15,000 cubic metres continues to flow untreated into the Dhaleshwari River.
This shortfall, he said, has severely undermined Bangladesh’s ability to meet international environmental compliance standards, restricting access to premium export markets in the European Union, United States and other high-value destinations.
The industry leader also cited broader structural constraints, including policy instability, bureaucratic delays, infrastructure bottlenecks and shortages of skilled labour, all of which continue to suppress investment confidence and productivity.
Salim argued that meaningful progress will require a comprehensive upgrade of tannery infrastructure, stricter environmental enforcement, simplified regulatory frameworks and coordinated industrial governance.
He also criticised past implementation performance, saying that large-scale public investment in the Savar relocation project had not delivered expected outcomes. Key infrastructure components, he noted, remain incomplete or dysfunctional, raising concerns over planning, oversight and execution within relevant agencies.
As a result, most tanneries in Bangladesh remain unable to secure certification from the Leather Working Group (LWG), a globally recognised benchmark essential for entry into premium international markets.
“Without a fully operational CETP and verified waste management systems, LWG certification remains largely out of reach,” he said, adding that this has confined Bangladesh to lower-value export segments while regional competitors continue to advance in higher-end supply chains.
Salim also highlighted the need for stronger domestic coordination within the industry, noting that fragmented representation among trade bodies has weakened collective bargaining power�"unlike the more unified structure seen in the garment sector.
He further warned of growing domestic reliance on low-quality synthetic alternatives, arguing that such products pose environmental and health risks due to harmful chemicals and microplastics, particularly in children’s footwear and school accessories.
“With global consumers increasingly shifting towards natural and biodegradable materials, Bangladesh has a significant opportunity to reposition leather as a sustainable export alternative,” he said, urging policy measures to discourage low-quality synthetic imports and strengthen domestic leather manufacturing.
Among his key recommendations were the formation of an independent National Leather Board, full operationalisation of the CETP at Savar, accelerated LWG certification support, establishment of a modern Leather City, and relocation facilities for downstream leather goods industries.
He also called for business-friendly financial reforms, including single-digit interest rates, removal of compound interest burdens, long-term industrial financing, and targeted export incentives aligned with competing leather-producing economies.
The call arrives as the new government pledges to expand industry, reopen closed factories, diversify exports and create jobs.
Salim said that strong, visible government action on the CETP, certification and financing would quickly convert Bangladesh’s leather industry from an underperforming resource into a major engine of growth, employment and foreign exchange earnings �" a transformation the nation cannot afford to delay.
Concluding his remarks, Salim stressed the need for a unified national platform involving all stakeholders�"tanners, exporters, footwear manufacturers and leather goods producers�"to ensure coherent policy advocacy and coordinated sectoral growth.
“The opportunity is real, but it will only be realised through decisive reform, institutional discipline and strategic long-term vision,” he said.
