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Sights set on $10 billion leather and footwear exports soon
International, local experts show ways, suggest dos
FE REPORTDeborah Taylor (2nd from left), managing director of Sustainable Leather Foundation (SLF), speaking at a discussion on 'Leather: The Truly Sustainable Material' during the 4th Bangladesh Leather Footwear & Leathergoods International Sourcing Show (BLISS-2023) at International Convention City Bashundhara in the city on Friday. Ibnul Wara, managing director of Austan Ltd, Werner Lange, coordinator of Textile Cluster, GIZ, and Carl Flach, supervisory board member of Leather Naturally and senior director operational strategies, international tanning group, ISA TanTec, were present —FE photo
Industry leaders appear upbeat that US$10 billion worth of export of leather and footwear products from Bangladesh is possible soon through sound integration into global value chain, as the world market holds huge potential.
To make that happen people in the industry have to act collectively as a team with self-confidence-and by complying with developed-world buyers' requirements as listed at an international meet on Friday.
They also said exporters and manufacturers need to review their strengths and weaknesses to find out why, despite all potential, the country's leather and footwear exports are worth only $1.7 billion.
They said global compliance is a very much prerequisite to get integrated into the global value chain, and urged fellow manufacturers and exporters to review their limitations and work on target-oriented markets.
The speakers came up with the observations at a breakout session titled 'Linking Bangladesh to Global Value Chain' at BLLISS 2023.
The 2023 edition of the three-day Bangladesh Leather Footwear and Leather Goods International Sourcing Show (BLLISS) began at the International Convention City Bashundhara in Dhaka on October 12.
The Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh in collaboration with the commerce ministry organised the show.
Sandeep Das, Regional Managing Director - South Asia-and President, Global Softlines and Hardlines, Intertek, moderated the session.
Indicating dominant export-item ready-made garments, Mr Das said Bangladesh is no more a one-product country. Integration into the Global Value Chain (GVC) will allow Bangladesh to tap into the vast global market for leather products and footwear.
"This would lead to increased exports and overall economic growth, subsequent improve of the country's international competitiveness and foreign investment."
Speaking as panelist, managing director of Maf Shoes and Maf Footwear Ltd Hasnat Md Abu Obida Marshall recalled that 10 years back, they had to import hundred-percent materials for a finished product. "Now it is around 50 per cent," he said, adding that the volume of export will increase gradually with the increase in percentage of local backward sourcing.
He sounded upbeat while expressing his hope that the exports would come to $2 billion by next year and $10 billion in a few years.
Project Manager of GIZ Dr Silvia Popp said compliance with increasing global rules and regulations alongside ensuring decent workplace, human rights and labour rights would play a prominent role in the days to come.
She said buyers would have to think before sourcing from Bangladesh whether international compliance is ensured.
Another panel speaker, Commercial Director of Amann Bangladesh Ltd Mir Ehsanul Huq, stressed self-belief and collective address of limitations if the industry has to bring success.
"The industry needs to identify gaps and find unique selling proposition for further growth of the exports," he told the business meet.
The session got off to a formal start with association president Syed Nasim Manzur introducing the panel speakers and guests at the international leather-trade show.
In another session of the meet, experts suggested that leather exporters in Bangladesh should focus on the other compliance requirements of buyers to get themselves prepared until the Central Effluent Treatment Plant (CETP) is readied by the government at the new leather hub near the capital.
Apart from CETP, there are 32 areas where they can work on their own and under their control to proceed to securing Leather Working Group (LWG) certification-a key requirement from international buyers.
To enhance its global competitiveness, production and management of leather in responsible and sustainable manner is also necessary for Environmental, Social, and Governance (ESG) stands.
Speakers and leaders of leather sector made the observations at a breakout session titled 'Leather-the truly sustainable material' at the BLISS-2023 at the venue.
Ibnul Wara, Managing Director of Austan Ltd, moderated the panel discussion attended by Deborah Taylor, Managing Director of Sustainable Leather Foundation (SLF), Werner Lange, coordinator of GIZ Textile Cluster Bangladesh, Deutsche Gesellschaft for Internationale Zusammenarbeit (GIZ) GmbH, Carl Flach, supervisory board member of Leather Naturally and senior director-operational strategies, International Training Group, ISA Tantec.
Leather Working Group (LGW) accreditation is not only dependent on single criteria, CETP, but also other 32, too, said Ms Deborah.
SLF is working on the areas to support industries in ensuring sustainability and help better profitability.
Accessible, inclusive and modular approaches are needed to focus on compliance requirements, she added.
She called for working on the areas where industries have direct control to ensure sustainability and compliance.
LWG is a non-profit organization, responsible for the world's leading environmental certification for the leather-manufacturing industry. The audit protocol carefully accesses the environmental performance of leather manufacturers from all over the world.
"...we need profit. It's a currency as long as sustainably is connected to profit; then it works," said Mr Werner.
It's consumers who have to pay for sustainability, he said in response to a question.
Mr Wara, who moderated the session, said other market players in leather industry can consider Apex as a best example to ensure compliances as the company has achieved Business Social Compliance Initiative (BSCI) certification, an "A"-grade certification, as the first factory in Bangladesh manufacturing for the domestic market.
"Of course profit is important, but it's not everything," he added, to put emphasis on quality and sustainability of products for business success.
In the panel discussion all discussants agreed that leather is a sustainable material, and that now industries just need to concentrate on best practices of ESG as well as prepare complying with legislative and regulatory changes, particularly in the European Union (EU).
"ETP discussion is ongoing discussion that would come up when we talk about leather but there are 32 other elements that are completely in our hands," Mr Wara said about dos for the entrepreneurs.
"It's high time we started focusing on 32 elements," he added.
"World cannot have no-inclusive approach if tanners work for green certification by archiving other 32 goals," he said. "This itself would change the narrative of the country and it will give us voice to the world not to take a non-inclusive approach when it comes to Bangladesh because it is possible in Bangladesh."
Deputy Managing Director of Picard Bangladesh Amrita Islam said organised farming is absent in Bangladesh but it has big environmental impacts.
Saiful Islam, Managing Director of Picard Bangladesh, said Bangladesh does not have industrial farms so industry procures raw materials on their own otherwise these may leave other impacts on environments.
Ms Deborah made it clear that "sustainability is using your own raw materials, not to import for meeting certification standards".
On negative talk on leather, Carl Flach said the world is getting more complex but everything is possible in Bangladesh.
He said leather is sustainable like handbag-shoes can be repaired and it is made from waste products.
"Leather itself a sustainable product but challenges lie in how we process leather responsibly. Perception on leather is the major issue," he told his business audience from the sector.
Deborah explains a set of existing legislative requirements of the EU and new ones under pipeline for the leather-goods exporters.
Mr Lange of GIZ spoke some home truths on the future of the industry: "Comply or die (commercially), comply and fly."
In his words of advice, as such, he said: "Governments should work more closely in the areas. Otherwise, Bangladesh would lose its advantage to the EU now or later and EU would lose its carrot too."
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Sights set on $10 billion leather and footwear exports soon
Industry leaders appear upbeat that US$10 billion worth of export of leather and footwear products from Bangladesh is possible soon through sound integration into global value chain, as the world market holds huge potential. To make that happen people in the industry have to act collectively as
