1.

Factor Endowments:
1.1 Labor

The large population of Bangladesh always helps to boost the labor intensive industries in
the country and it is not different for leather industry. Our leather industry has currently a
labor force of 0.5 million which includes both skilled and non-skilled labor force. To enhance
productivity and attain international standards, Bangladesh College of Leather Technology
offers various academic programs towards leather industry related workforce. As this
production factor is abundant, it is the cheapest amongst others. That’s why, according to
Factor-Proportion theory, emphasis on labor can give Bangladesh competitiveness and
which is the real scenario as well.

1.2 Land and Raw materials

The geographic environment of Bangladesh is very suitable for animal husbandry.

Consequently, Bangladesh dominates 1.8% of world’s cattle stock and 3.7% of world’s goat
stock. Here, farms don’t use wire fence to breed animals as a result the quality of raw hides
and skin is world class and the price is relatively cheaper. The annual average output of
processed leather is 200 million sq. feet here. The government provides subsidies and low
tariff barrier for the chemicals needed in this industry, but domestic production can further
reduces the cost.

1.3 Capital

Firms usually import all the necessary machineries required to process leather and produce
leather goods. Bangladesh mainly imports these machineries from Italy and Republic of
Korea. The following table summarizes these imports for 2009.

Table: Top 5 Countries from where Bangladesh Imports Machinery for Leather Industry
Country Imported value(Thousand $)
Italy 2770
Republic of Korea 2751
China 950
Germany 474
Chinese Taipei 360
Source: international Trade Center

1.4 Infrastructure

The government considers leather industry as one of the most booming export sectors.
Thus, government is providing various infrastructural supports for flourishing the industry.
The government in 2003 took the initiative to build ‘Leather Industry Estate (LIE)’ in Savar
which holds all the facilities necessary for international standard leather processing unit and
expected to complete by 2012. Moreover, eight EPZs (Export processing Zone) of the

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