Tanneries in Bangladesh are still seeking assistance
According to foreign media reports, after the Bangladeshi government cut export incentives for the leather industry, a number of tanneries in the country were in trouble. The Bangladesh Tannery Association (BTA) told reporters that in an attempt to remedy the situation, a letter had been sent to the Ministry of Finance in Bangladesh asking for incentives to be reinstated for the sector.
On January 30, 2024, the Central Bank of Bangladesh announced the complete elimination of the 10% cash incentive for grey leather exports and the reduction of the incentive for finished leather from 10% to 7%.
The Bangladesh Garment Manufacturers and Exporters Association said that domestic garment companies are currently facing challenges such as rising wages and falling international orders, and the government's introduction of this new policy in difficult times will only "add to the situation".
BTA Chairman Shaheen Ahmed said in an interview, "If export incentives for the leather industry are not continued, whether it is the 154 tanneries in Dhaka that use the Central Sewage Treatment Plant (CETP) or the tanneries that use their own sewage treatment plants (ETPs) outside Dhaka, the production and export of leather may be stopped in the future." In this case, the country's annual export earnings from grey leather will also be reduced by about $200 million. ”
"This will make it harder for us to get LWG certified," Ahmed said. Compliance is a major challenge for the leather industry, and now, because our tanneries are not yet up to standard, we are not able to get more overseas orders, and our products are being priced under. ”
"If we can get LWG certified, leather that costs 75 cents now can be sold for $1.5," Ahmed said. Since the tannery moved from Hazaribagh to the leather industrial park in Hemayetpur, all tannery owners have wanted to be LWG certified, but this requires some financial support. If the government does not provide support through incentives, it will be more difficult for our tanneries to obtain LWG certification. ”
According to BTA, Bangladesh's leather industry is expected to create jobs for 3.5 million to 4 million people by 2030, working together to achieve an export target of US$12.5 billion.
Total U.S. leather exports continued to decline in February 2024
According to the latest data from the Leather and Leather Council of the United States (LHCA), total U.S. leather exports continued to decline in February 2024. From January to February 2024, the United States exported a total of 4,357,706 pieces of leather, down 8.68% year-on-year, and the export value was $178.48 million, down 3.9% year-on-year.
According to LHCA data, from January to February 2024, the total export volume of fresh/salt wet cowhide in the United States was 3,705,371 sheets, down 13% year-on-year, and the export value was $116.26 million, down 11% year-on-year. China (including Hong Kong) remained the largest buyer of these leathers, importing 2,554,801 sheets, but down 10% year-on-year, with imports of US$78.9 million, down 7% year-on-year.
From January to February 2024, U.S. wet blue leather exports totaled 652,335 sheets, up 26% year-over-year, and the export value increased 12% to $62.22 million.
Nepal's homegrown footwear industry is being squeezed
According to the latest data from the Nepal Footwear Manufacturers Association, Nepal's annual demand for footwear is 100 million pairs, more than three times higher than pre-pandemic demand. But despite the impressive growth in demand, Nepal's homegrown footwear companies are struggling to survive.
Rudra Prasad Neupane, President of the Nepal Footwear Manufacturers Association, said: "The market is now flooded with low-cost shoes, and at the same time, the number of smuggled shoes is staggering. Many local Nepalese footwear companies are now just trying to make ends meet. We estimate that 50% of the shoes traded in the Nepalese market are parallel imports or smuggled goods. This means that the government will lose almost Rs 1,100 crore in tax revenue every year. ”
Neupane, chairman of Run Shoes, said that after the decline in demand for traditional footwear products, footwear manufacturers are also developing products that are suitable for the current market demand. "Our company now produces an average of 1,000 pairs of shoes and 1,500 pairs of sandals a day, which is 25% less than a few years ago. ”
Dinesh Shrestha, a regional distributor for Black Horse Shoes, said: "We are facing month after month of losses. The main reason is that there is a significant decrease in the number of consumers who buy domestic products, and at the same time, the market is flooded with a large number of cheap shoes. ”
"Shoes imported from India are so cheap that many domestic shoe companies, especially smaller shoe factories, have closed down," Shrestha said. ”
Ram Krishna Prasai, General Manager of Shikhar Shoes, said, "We lost Rs 20 million during the pandemic. Until now, our business has shown no signs of recovery. At our peak, we had 700 employees, but now we have reduced to 50 and our production capacity has been reduced to 20%. At the same time, the severe shortage of working capital is also one of the reasons why Nepali footwear manufacturers are in a difficult situation. ”
Rudra Prasad Neupane, president of the Nepal Footwear Manufacturers Association, said that although those shoes were made in Nepal, about 60 percent of the raw materials were imported from China, Singapore, India and Malaysia.
Neupane said that due to negligence in border checks and lax enforcement of rules and regulations, illegal imports have emerged. "The Association has been lobbying foreign ambassadors to pay attention to this issue to ensure the normal trade of Nepal's footwear import and export. ”
"We are running a campaign to promote Nepal's indigenous brands by requiring all Nepali civil servants, ministers and district governors to choose Nepalese shoes when wearing formal attire. Neupane said.