Bangladesh Leather Sector and Impact of COVID19 On the Supply

Chain Management
Master’s Thesis
Graduate school of management (GSM)
Ritsumeikan Asia Pacific University

Submitted by: SUJOY Muhammad Nazmus Sadat

Student ID: 52119009

Master’s Thesis Presented to

Ritsumeikan Asia Pacific University

In Partial Fulfillment of the Requirements for the Degree of

Master of Japanese management / Innovation and operations management

Dated: January 2021

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Executive summary

The leather industry of Bangladesh is one of the major contributors of the country’s GDP growth.
There are a good number of people who are working directly or indirectly for this sector. The
number of jobs created by the manufacturer of leather goods are noteworthy. Leather is one of the
main items for export after RMG, leather is considered as the most valuable industries in
Bangladesh. The target was to make this industry of billion dollars by 2021. Because of the global
pandemic the process is hindered but not stopped.

The thesis is consisting of four main chapters. In the beginning the introduction of the industry and
a general overview is given. It is for better understanding of the current situation and different
aspects regarding the leather sector. Later the historical background and the gradual growth of the
industry has been discussed. The COVID19 pandemic has given me a great challenge during the
whole process of research. The panic and lockdowns made the situation more difficult in case of
interviews and data collection. In chapter two the condition of leather waste and management
system were discussed. The supply chain management is based on all the links of this huge
machine technically. The innovations and technological advancements are discussed in the
following section and in the end of second chapter a glance of COVID19 pandemic.

Chapter three is advancing more towards analysis. Since COVID19 started in the beginning of
2020, that is why the limitations of primary and tertiary data were obvious. The analysis consists
of SWOT. There are issues that were hampering the growth of this sector was safety, heath, toxicity
and pollution. Bangladesh is exporting raw cow hides, but this country is also very renowned for
their finished goods in the present world. The biggest customers are Japan and Germany, but
nowadays there are other countries from America or Europe that are taking interest in Bangladesh.

The leather industry has contributed to the Bangladesh economy on a great scale. After the
independence war the crisis of a new country was handled by some of the major industries and one
of those is the leather industry. In 2020, because of the COVID19 Bangladesh is facing that kind
of difficulty after a long period of time. The GDP growth is still not falling but the leather sector
adds more than 5% in the whole GDP of the country.

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List of Contents Page
EXECUTIVE SUMMARY 4
PART-1: INTRODUCTION 6
1-1:OVERVIEW OF THE LEATHER SECTOR IN BANGLADESH 8
1-2: INCEPTION OF THE INDUSTRY 11
1-3: COVID19 AND BUSINESS ASPECTS 13
1-4: RESEARCH APPROACH 14
PART-2: CURRENT SITUATION OF THE SECTOR 14
2-1: LEATHER WASTE AND POLLUTION IN BANGLADESH 17
2-2: INNOVATION AND PROCESSING 20
2-3: MANAGEMENT DURING PANDEMIC 22
PART 3: CLASSIFICATION OF LEATHER PRODUCTS 25
3-1: SMALL LEATHER MERCHANDISE 25
3-2: MEDIUM LEATHER MERCHANDISE 26
3-3: HEAVY LEATHER MERCHANDISE 27
PART 4: PURPOSE OF THE RESEARCH 27
PART 5: RESEARCH AND ANALYTICS OF THE INDUSTRY 27
5-1: SWOT ANALYSIS 28
5-2: HEALTH CRISIS OF LEATHER WORKERS 30
5-3: TANNERY PROBLEM AND TOXICITY 31
5-4: IMPACT OF COVID19 ON THE INDUSTRY 32
5-5: CHALLENGES TACKLED BY THE INDUSTRY 34
5-6: DEMAND OF BANGLADESHI LEATHER GOODS IN JAPAN MARKET 35
PART 6: CONCLUSION AND RECOMMENDATIONS 40
6-1: CONCLUSION 40
6-2: RECOMMENDATIONS 41
REFERENCES 43

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TABLE OF FIGURES PAGE
FIGURE:1-SOURCE: EXPORT PROMOTION BUREAU, BANGLADESH 13
FIGURE:2-DATA SOURCE: EPB, BANGLADESH 14
FIGURE:3-SOURCE: ENVIRONMENT POLLUTION IN BANGLADESH: 18,000
DIED IN DHAKA IN 2015 (THEDAILYSTAR.NET) 16
FIGURE:4-SOURCE: ENVIRONMENT POLLUTION IN BANGLADESH: 18,000
DIED IN DHAKA IN 2015 (THEDAILYSTAR.NET) 17
FIGURE:5-SOURCE: ENVIRONMENT POLLUTION IN BANGLADESH: 18,000
DIED IN DHAKA IN 2015 (THEDAILYSTAR.NET) 17
FIGURE:6-SOURCE: ENVIRONMENT POLLUTION IN BANGLADESH: 18,000
DIED IN DHAKA IN 2015 (THEDAILYSTAR.NET) 18
FIGURE:7-SOURCE: OUR WORLD IN DATA CORONAVIRUS PANDEMIC
(COVID-19) - STATISTICS AND RESEARCH - OUR WORLD IN DATA 21
FIGURE:8-SOURCE: OUR WORLD IN DATA CORONAVIRUS PANDEMIC
(COVID-19) - STATISTICS AND RESEARCH - OUR WORLD IN DATA 22
FIGURE:9-SOURCE: OUR WORLD IN DATA (CORONAVIRUS PANDEMIC
(COVID-19) - STATISTICS AND RESEARCH - OUR WORLD IN DATA.) 22
FIGURE1 (A): AGE GRAPH 34
FIGURE1 (B): GENDER GRAPH 34
FIGURE1 (C): PREFERRED PRODUCT GRAPH 35
FIGURE1 (D): COLOR GRAPH 35
FIGURE1 (E): DESIRED PRODUCT GRAPH 36
FIGURE1 (F): BASIC CUSTOMIZATION GRAPH 36
FIGURE1 (G): PRICE GRAPH 37
FIGURE1 (H): WRITTEN RESPONSE 1 37
FIGURE1 (I): WRITTEN RESPONSE 2 38

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1. INTRODUCTION

The leather business is viewed as one of the most encouraging areas everywhere in the world. In
the dissertation, I tried to put a light on the current situation of the leather industry in Bangladesh.
I also focused on supply chain management on the topic. This includes the entire process, from the
raw cow-hide collection to the finished product followed by the delivery. The twist that makes my
dissertation more concentrated is the covid19 involvement in the business world. Lastly, I
discussed the possible solutions and benefits which might rotate the situation positively.
Bangladesh is a Muslim country and very much saturated with cowhide. Slowly the country
developed its reputation on making quality leather goods. In addition, this sector provides a good
opportunity for employment in this developing country. Although the leather industry is the second
largest export sector and of one of the most prioritized sectors of Bangladesh, the revenue from
the leather and footwear sector have seen a decline in the year of 2020. This is due to the COVID-
19 situation, people had no option but to stay indoors in the pandemic. Also, this terminated the
export of the leather products from Bangladesh.

In the paper, I have also included a few processing stages of the cowhide. The cow-hide processing
system has three main stages: primer stages, tanning, and crusting. The animal conceals and hides
are spared by drying, salting, or chilling with the objective that rough stows away, and hides will
achieve cowhide tanneries in a commendable situation. The use of normally tenacious topics for
the conservation of rawhide up and skins is to be evaded. In the tanning system, creatures stow
away, and hides are managed to eliminate hair and shapeless proteins and fats, leaving a basically
unadulterated collagen group. They raw skin that is saved by infusion with tanning administrators.
Cowhide creation, by and large, incorporates three phases: arrangement (in bar-house); tanning (in
tanning yard), lastly completing the process of, including kicking the bucket and outside
management. A broad scope of methodology and synthetic compounds, as well as chrome salts, is
utilized as a piece of the tanning and completing techniques.

The cowhide and its connected descending organizations know how to profess to be the world's
greatest present-day, big business area by taking a gander at its items. Inside the calfskin industry,
the crude fabric is an aftereffect of the red meat industry. In Bangladesh, tanneries, and cowhide,
calfskin items, and foot-wear makers are to put on combat for additional provisions in the global
business sectors (Sarkar, 2000). They stow away, skins, and calfskin industry are one of the key

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rural sub-areas with a high potential towards item progression that watches out for relevant issues
of budgetary significance in the public arena and emphatically impacts on the nearby turn of
events, the production of riches, and business.

COVID19 has made the year of 2020 challenging for almost every sector of business. The effect
of the pandemic was clear on the supply chain area of the leather sector. Bangladesh got the first
case of death on 8th March 2020, but after that there was long time panic and crisis followed. The
government tried to control the situation but could not handle it because of various reasons.

1.1 Overview of the Leather sector in Bangladesh

Bangladesh has significant points of interest in building up its leather industry. Cowhide from
Bangladesh is exceptionally presumed for its great quality, and leather merchandise and footwear
processing plants are progressively ready to meet the high requests of unfamiliar buyers. The
leather business has the potential to build up the whole inventory network from crude cowhide to
cowhide handling, followed by creation of footwear and leather items, locally.

There is an exceptional scope for the leather business in Bangladesh as it can provide adequate
amounts of high-quality raw material as well as low-cost labor. The business can contribute
essentially to the export sector and gain huge revenue from it.

This cowhide industry is having a basic influence in our public economy, picking us up as an
enormous measure of unfamiliar settlement. A large portion of the leather products and footwear
delivered here are primarily sent out situated. According to the Export Promotion Bureau (EPB)
data, “Bangladesh earned $1.01 billion exporting leather, leather goods and leather footwear, the
only billion-dollar export earner after the apparel goods, in the fiscal year 2018-19”. (Export
Promotion Bureau-Government of the People\'s Republic of Bangladesh (epb.gov.bd)). “The
leather sector includes 200 tanneries, 3,500 SMEs, 2500 footwear making units and 90 large firms.
The sector generates direct and indirect employment for about 860,000 people, 53% of the
workforce are women in the leather product industries”.(Leathergoods And Footwear
Manufacturers & Exporters Association of Bangladesh (lfmeab.org). The small medium
enterprises (SMEs’) are defined in various aspects all over the world, mostly it is identified by the
commonly used yardstick of total numbers of employees and capital investment.

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To modernize this calfskin industry, and furthermore to make it a decent option, in contrast with
the ready-made garment fragment, the specialists received the representation to shift the most
seasoned cowhide shrubbery from the current place to Savar, in the year of 2003 and started
conveying plot to industrial facility proprietors in 2009. An additional uplifting news broadcast is
that the 'green processing plant' thought in the leather shoe industry has likewise started in the
country Bangladesh.

Since it is shown by Tanners Association of Bangladesh, "the country makes 215 million square
feet (about 15 million square meters) every year, 64.82 % of it is cowhide, 2.25 % wild ox cover-
up and 1.2 % of sheep skin. The greater part of which is secured since creatures relinquished
throughout the Eid-ul-Adha celebration. An additional investigation says 17.5 million bits of
covers up are gathered each year in this nation.

In relation to the verifiable foundation of the cowhide business, "The calfskin business was begun
in Narayanganj by celebrated business visionary Ranada Prasad Shaha before the Second World
War. After 20 years, it was moved to Hazaribagh from Narayanganj in 1960. By the request of the
High Court, and with the assistance of Bangladesh Small and Cottage Industries Corporation
(BSCIC), it was migrated from Hazaribagh to Hemayetpur in Savar on around 200 sections of
land. Our nearby speculators contributed about Tk 250 crore (Tk 2.5 billion) to move their
tanneries. It caused a momentary hole. Around then, our unfamiliar purchasers disappeared from
our nation to our neighboring nations. Presently, it is our principal obligation to get them back at
the earliest opportunity."

Mohiuddin Ahmed shared his arrangement about calfskin sent out within this area and understood
that "Our current objective is to guarantee USD 5 billion in fares by 2021 for our 50th year of
freedom. On the off chance that we are fruitful, around 2 million individuals will be utilized in this
area. For this, the public authority needs to pull in new business visionaries and speculators in this
area. Obviously, there are a few constraints as individuals are picking plastic or counterfeit
cowhide items now. Yet, the interest in calfskin products in our nation is expanding step by step.
One overview says that 20% of our populace is purchasing shoes worth Tk 4,000 consistently. In
this way, there is likewise an incredible chance in the neighborhood market. The greatest business
sectors for Bangladeshi calfskin and cowhide products are Italy, England, Spain, France, Germany,

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Poland, China, Japan, the USA, and Canada. We trade fundamentally men's shoes to these
nations," regarding fares in this sector.

The organization of Leather Engineering and Technology (ILET) of the University of Dhaka is the
principle specific informative establishment in Bangladesh exclusively committed to the cowhide
business. "ILET concedes 150 understudies each year who are similarly partitioned into three
streams. The future status of the understudies of this foundation is ordered into three classes _ 10%
of the understudies will travel to another country for higher degrees, 60% will be utilized at various
neighborhood and global calfskin, footwear, and cowhide item processing plants, as Youngone,
Picard, Timberland, Pauma, Decathlon, Nike, ABC Mart, Bata, Apex and others, as quality control
official, specialized official, research official, item advancement official, creation administrator,
merchandiser, industrial facility supervisor, etc. while the rest (30%) may go for government and
different positions, such as working at cowhide research organizations, worldwide testing labs
(SGS, Bureau Varitus, ITS), and nearby and global NGOs." All the big international companies in
Bangladesh such above mentioned are helping Bangladesh to grow internationally.

About work openings, the chief of ILET expressed: "The cowhide business includes a place of
observable quality in the economy in context of its phenomenal potential for work and
improvement of fares. An adequate number of appropriately talented people is fundamental to tap
the ability of the entire calfskin regard chain, despite extended interest in development and
displaying. Truly, the cowhide part is one of just a small bunch of territories that expects a basic
piece of the fare upgrade action of Bangladesh and offers a high business opportunity."

In Bangladesh domesticated animals have a genuinely colossal populace to help a strong and
creating tanning industry. The fragment extent is dairy creatures (Cow) conceals represent 57% of
all the creation, goat leather for 20% and wild ox and others balance the rest. The current amount
of calfskin in the country is around 150 million square feet yearly. Beside cow-like covers up, wild
ox, goats, and sheep; a lot of kangaroo conceals is bought from Australia and completed in
Bangladesh for manufacturing excellent footwear to trade abroad. The greater part of the shoes is
produced using that kangaroo calfskin for by and large exchange to Japan. Similarly, ostrich
cowhide is bought from abroad (from countries like China and Australia) for the creation of high-
quality and top-notch packs and leather products for replacement to those nations. As per the world
leather industry division, Bangladeshi cow hides are well recognized all over the globe. Afterward

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at that point, in 2002, Bangladesh Environmental Lawyers Association requested a claim from the
Supreme Court as for migrating of calfskin tannery business at Hazaribagh and arranging at a
naturally neighborly region. The claim also explains about re-using the colossal measures of
tannery removals, (Writ Petition no. 891 of 1994) starting today and into the foreseeable future,
constructing a tannery re-using business at the territory of the latest cowhide and tannery region,
that was, afterwards, shifted to Savar locale. This has accepted a constructive function, used for
the abroad financial specialists to put extra into this calfskin business, especially Italy and Japan,
to notice the latest regions, and work near to the present cowhide and tannery business. At the time
when Bangladesh is extending its calfskin marketplace in Italy, it has a solid chance of entering
the EU (European Union), by and large shifting the nation's exchange alliances, giving it an
optimistic beginning to the job and to rule the cowhide marketplace close in prospective years.
Mechanical progression: Chrome-tanned cowhide tends on the way to be milder and further
adaptable than vegetable-tanned calfskin. It has an elevated warm soundness, is uncommonly
consistent in the water, and sets aside low effort to make than vegetable-tanned leather.

1.2 Inception of the Industry

Cowhide preparing is an old collecting sub-fragment in Bangladesh with a long tradition of over
sixty years. The openness of indigenous crude material (stows away up and skins) empowered the
making of the business during the 1950s in East Bengal. Throughout the Pakistan period (1947-
1972), the trade was directed by the people from India, who had the skill of calfskin getting
complete industry. Around that point, cowhide handling was restricted to the creation of wet blue
calfskin (semi-prepared tanned calfskin) and the non-Bengali sellers traded an enormous piece of
the product to West Pakistan for furthermore getting ready and age of cowhide stock. Several small
tanning units were claimed by the Bengali finance manager, who prepared calfskin transcendently
on behalf of the neighborhood market.

After the autonomy of Bangladesh, the organization expected power in excess of the tannery
business surrendered by pulling out non-Bengali trade visionaries, however had restricted
achievement in working them in the public area. Fare of prepared calfskin made totally out of wet-
blue cowhide till 1980-82. After the year 1980, arrangement uphold dealings pointed toward
growing the degree of significant worth expansion in the business gave the impetus to latest private

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interest in the calfskin business. The denial on the fare of wet-blue cowhide in June 1991 provoked
the background of present-day calfskin tanning divisions for the creation of exterior cowhide
(tanned cowhide after additional preparing of wet-blue cowhide) and conclude calfskin and this
was trailed by latest interest in calfskin items business, particularly calfskin shoe industry.

Nonetheless, till 2005 the calfskin business includes only an unassuming situation in Bangladesh's
economy that was underneath its genuine potential. Thus, in 2001-02, regard development in
cowhide attempts within any event 10 authorities amounted to Tk. 8,837 million ($153 million),
which was about 2 % of amassing regard incorporated in that range of social occasions of
organizations. Calfskin shoe wear spoke to 29% of the reasonable benefit from cowhide and
cowhide things in 2008-09, whilst the proposal of cowhide and other calfskin things were 69%
and 5% independently. Subsequently, notwithstanding its small size, the calfskin business in
Bangladesh seems to have encountered an enormous change in the midst of the past twenty years
from a low-regard alternative tanning activity to a producer of cowhide footwear and calfskin stock
close by high regard included external layer and finished cowhide.

By 2011-2012, the commitment of the calfskin business to the Bangladesh economy was More
than US$500 million, speaking to 3% to 4% of the country's fare. Ongoing fare patterns show that
the shoe wear sector is turning into the quickest. The figure shows that exhibition concerning
footwear is expanding impressively. Also, development in such a way is needed in the future.
Starting now, there are in excess of 20 mechanized shoe associations in the land, most make
calfskin shoes for an overall fare. A huge number of semi-mechanical and non-mechanical shoe
sectors are working in the homegrown market as well. Someplace close around 15 or 20
organizations produce top-notch cowhide items that are reliably traded in great interest. Fare
execution can be predicted to increase in the accompanying 4 years with no under 13-15%
development in revenue for every annulus. In the next few years, the recent shoe market or
footwear processing plants are likely going to send out shoes. The new limit [stretched and new
plants] that will proceed stream from late 2018 will give expanded development. The fare
preparing regions (all through Bangladesh) currently have in excess of 30 shoe and calfskin items
in modern offices and there are in any event a few huge processing plants under development.

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1.3 COVID19 and Business Aspects

According to UNDP, “The COVID-19 pandemic is the characterizing worldwide wellbeing

emergency within recent memory and the best test we have looked at since World War Two. Since
its development in Asia toward the end of last year, the infection has spread to each mainland aside
from Antarctica. Cases are rising every day in Africa, the Americas, and Europe. Nations are
dashing to slow the spread of the illness by testing and treating patients, completing contact
following, restricting travel, isolating residents, and dropping huge social occasions, for example,
games, shows, and schools. The pandemic is moving like a wave one that may yet crash on those
most un-ready to adapt. In any case, COVID-19 is substantially more than a wellbeing emergency.
By focusing on all the nations, it contacts, it can possibly make annihilating social, financial, and
political emergencies that will leave profound scars. We are in a strange area. Huge numbers of
our networks are unrecognizable from even seven days prior. Many of the world's most prominent
urban areas are abandoned as individuals stay inside, either by decision or by government request.
Over the world, shops, theaters, eateries, and bars are shutting. Consistently, individuals are losing
positions and pay, with no chance to get off knowing when ordinariness will return. Little island
countries, intensely subject to the travel industry, have void lodgings and abandoned seashores.
The International Labor Organization gauges that 25 million positions could be lost.” (Coronavirus
disease COVID-19 pandemic | UNDP in Bangladesh).

According to the financial express, “The financial area will confront liquidity pressure as store
development and advance recuperation likewise decays. Private area credit development may go
down from March 2020 to June 2020. Cutting the money hold prerequisite (CRR) by 1 percent
would add around infuse Tk. 130 billion into banking area liquidity. Other than this BB has taken
some solid activities, for example, a decrease in repo financing cost, repurchase of government
protections, advancement of installment administrations, renegotiate plot BDT 50bn for
horticulture area at a concessional rate, quarterly reimbursement for imports under
supplier's/purchaser's credit, renegotiate plan of BDT 30bn for low-pay experts, ranchers,
miniature finance managers, delay of charging revenue on advances, limitation on profit
installment by banks, the denial of laborers lay-off, most extreme edge limit for import of kid food,
relaxations for holding gatherings and administrative detailing. Likewise, Bangladesh Bank
additionally loosened up the bar of Advance-Deposit Ratio (ADR) from 83.50 to 87 percent.

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Although the monetary market particularly the financial area is battered vigorously because of the
direct cap of the pace of revenue of stores and advance very before this pandemic. Numerous
obstinate borrowers may fall back on exploiting this guideline and the business may confront this
on a greater scale during the pandemic. An edge might be started to recognize the veritable victims
and pass a goal for protecting them”. (COVID-19 and its impact on Bangladesh economy
(thefinancialexpress.com.bd)

1.4 Research Approach

The report has been readied dependent on information gathered from optional resources and
tertiary sources and have been referred to where fitting. It was unrealistic to depend on essential
resources as getting information from this source needs a difficult situation and chose power
authorization. The optional data came predominantly from sites, Different organizations of
Bangladeshi government, Ministries, Bangladesh tanner’s association, Bangladesh leather goods
exporters association. Export promotion bureau, chamber of commerce, books, articles, journals,
related to cowhide business and COVID19 data were mainly collected from authentic online
sources.

2. Current Situation of the Sector

The modest work and homegrown crude materials advanced the second biggest fare exchange
department of Bangladesh with an aggregate sum of $2.34 billion USD. After the RMG area, at
present, the Leather Products and shoe business is one of the biggest creating areas of Bangladesh.
The country is set to ascend as the following assembling center for the overall calfskin industry.
The modest work and homegrown crude resources are lifting top creators to migrate their
manufacturing plants in the nation. Luckily the different number of unfamiliar speculators, just as
unfamiliar expansion buyers, purchasers have just indicated an interest in Bangladesh's calfskin
and footwear area.

As of late, another door has opened to furthermore expand the scope of the country's fare stand by
remembering shoe industry and other cowhide items, particularly to the (EU) marketplace.

Moreover, the nation as of now has been exchanging completed calfskin and different sorts of
cowhide things to the abroad business sectors. These items additionally appreciated extensive

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interest because of their great help. The essential reason behind this was the normal bit of leeway
of cowhide that Bangladesh makes. Disregarding the elevated caliber of neighborhood creature
conceals simultaneously in crude and completed structure, the country Bangladesh was all the
while dragging along countries like China and Vietnam in the fare of the shoe industry and other
calfskin items in different abroad business sectors.

The graph below shows the target and performance of the leather industry for 2018-19.

Figure:1-Source: Export Promotion Bureau, Bangladesh

The unstable political, social and economic condition affects the leather industry. Most of the items
produced are for the foreign market. The local market is big but not enough to contribute that much
for the industry. Many of the scholars of Bangladesh have given their opinion about this sector and
the gradual improvement but the government is still not putting that much effort in this arena.

According to Export promotion bureau (EPB), “In FY’2018-19 (July- November), the overall
export target of the leather and footwear industry was 636.19 million USD, which is underachieved
by 9.62 million USD with an overall export performance of 626.57 million USD. The major
decline happened in the leather category (HS code: 41) with a negative growth rate of -29.81%
compared to the same period of last fiscal year (FY’2017-18), which has achieved export earnings
of only 80.61 million USD, when the projected export target was 92.54 million USD. Similarly,
the leather goods category (HS code: 42-43) had a negative growth rate of -0.77% compared to
the same period of last fiscal year (FY’2017-2018), which has achieved export earnings of 184.73
million USD, when the projected target was 208.21 million USD”(EXPORT – Leathergoods And
Footwear Manufacturers & Exporters Association of Bangladesh (lfmeab.org)

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Figure:2-Data source: EPB, Bangladesh

According to LFMEAB, footwear (calfskin and non-cowhide) accomplished positive

development, cowhide footwear (HS Code: 6403) had a positive development of 8.65% and fare
profit was 262.81 million USD, which is 21.57 million overflows than the focused-on fare income.
Likewise, non-calfskin shoe (barring HS code: 6403) and footwear frill accomplished a positive
development pace of 6.29% with send out profit of 109.42 million USD, which is 4.33 million
excesses contrasted with the focused-on fare income as needed. (EXPORT – Leathergoods And Footwear
Manufacturers & Exporters Association of Bangladesh (lfmeab.org)

A review information shows that a total number of 19061 manual workers are straightforwardly
working with the calfskin area units having in excess of 16 working power. Of them, around 70%
are remarkably gifted (with work experience of more than 4 years), about 22% are semi-talented
(with work experience of 4 years), about 18% are on an amateur level (having a basis for months)
and about 6% are experts. More than 70% of the calfskin area workers (about 84%) are whole
workers, and almost all of them have a specification with intensely talented expert’s classification.
Countless specialists around 14% of the workers are periodic laborers. Out of all the laborers,
about 55% is applied in the cowhide handling sectors, 38% in the shoe business delivering sectors,
and the leftover 5% are in calfskin goods producing firms. Amongst all the workers about 72% are
male workers. About 98% of the female workers are whole day workers; notwithstanding, about
30% of the male specialists are periodic or low maintenance workers.

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 2.1 Leather Waste and Pollution in Bangladesh

Bangladesh's environment is polluted in various ways. The increasing ratio of harmful materials
in the air, water and soil of Bangladesh is alarming. The key factors responsible for the situation
are pollution due to transports, dumping waste directly to the river or open space, unsupervised
chemical supply and so on. Since we are working with the leather industry, we will be more
focused on how this industry is polluting the environment. After doing the on-ground research the
waste rate and pollution rate both are raising

(Fig 01: Leather waste) (Fig 02: Water pollution by dumping

chemicals)
The environmental pollution is one of the main reasons that a lot of foreign buyers’ loose interest
in Bangladesh. This country has a lot of potential but there is no system to maintain such resources.
There are several skilled workers who are willing to work but due to these types of issues they are
not able to show their full potential.

It was found that the actual environmental condition of Bangladesh is far worse than anticipated.
According to one of the most reliable newspapers of Bangladesh “The daily star” an article
which will support the claim. The related pictures are given below

In the graph we can observe that among all the countries of South Asia, Bangladesh has the
highest percentage of deaths attributed to environmental risk. Water pollution is one of the
biggest reasons for the environmental issues of Bangladesh.

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FIGURE:3-Source: Environment Pollution in Bangladesh: 18,000 died in
Dhaka in 2015 (thedailystar.net)

The monetary expense of the passing’s and incapacity regarding work yield is assessed at $1.5
billion in all metropolitan territories of Bangladesh and at 210 million in the capital city alone,
comparable to 0.7 percent and 0.2 percent of the nation's GDP in 2016.

Also, developing ecological difficulties that the urban communities face, the WB examines the
effects and reasons for contamination stages and debasement of regular assets in the capital city of
Bangladesh and other quickly developing urban areas. The urbanization has touched almost every
corner of the country and the development work is proceeding with a tremendous speed. The mass
awareness is required to stop the pollution and continuous growth of the country.

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FIGURE:4-Source: Environment Pollution in Bangladesh: 18,000 died in
Dhaka in 2015 (thedailystar.net)

FIGURE:5-Source: Environment Pollution in Bangladesh: 18,000 died in

Dhaka in 2015 (thedailystar.net)

Dhaka the capital city of Bangladesh is known around the globe for different aspects, some of
which are not positive. Dhaka is one of the world's most densely populated cities, corruption rate
is also very high and last but not the least pollution rate is increasing at an alarming rate. People
need to be careful about themselves as well as the environment. The deforestation to make space

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for the residential and factories is increasing day by day. Death trolls are increasing every day.
Coronavirus is also spreading because people are not responsible.

FIGURE:6-Source: Environment Pollution in Bangladesh: 18,000 died in

Dhaka in 2015 (thedailystar.net)

During recent many years, Bangladesh has encountered a sensational expansion in contamination
connected to urbanization. The quick development of the readymade article of the clothing
industry and expansion in metropolitan populace from under 40 millions of every 2006 to in
excess of 55 million out of 2015 had been key factors in uncovering the developing metropolitan
populace to ecological dangers.

2.2 Innovation and Processing

One notices wide between firm varieties of innovation levels in the cowhide preparing and
completing sub-areas, going from crude to profoundly advanced handling. The cabin area
delivering wet-blue and furthermore, the cowhide plants creating completed calfskin designed for
the nearby shop (neighborhood quality cowhide) are originated to utilize manual or hand-crafted
methods widely, for example, sun-drying. hand-covering and hand-showering. Then again, the
medium-and huge scope plants which number around 30 are found to utilize refined hardware and
gear in numerous activities, for example, shaving, parting, splashing, and estimating, the apparatus
are bought from some well-known producers from Europe. Both machine-driven and water-
powered apparatus and gear are seen in tasks. Utilization of the pressure-driven media is a typical

18 | Page
component in the completing plants; roughly have also introduced roto-press, a refined bit of
apparatus. In marking. The cutting-edge vibratory activity is presently supplanting the old
framework. In some countries are driving wellsprings of apparatus and hardware, while France is
limping along. Some south Asian countries and nearby foundations are discovered predominantly
in tasks requesting less complex apparatus and gear. Privately manufactured drums, made up of
wood, are perpetually utilized; this thing is gotten at 33% of the trade in expense. Lately, a few
neighborhood cowhide hardware firms have been creating switch driers of the normal kind, which
the calfskin producers have discovered agreeable. The calfskin producers at the medium-and huge
scope level are discovered to be sensibly very much familiar with the innovation.

This is because of various components. Right off the bat, they are every now and again in contact
with unfamiliar clients and numerous movements in countries and socially call worldwide cowhide
fairgrounds. Also, the calfskin makers are again visited by the agents of some driving cowhide
hardware makers. Thirdly, around twelve of the businesspeople are carrying on doing business for
more than 30 years. Next, the magnitude of the business is sensibly huge with more than 300
foundations, including 4 dozen of huge scale plants. Then, the Institute of the Leather Expertise,
presence midway found, has ended up being extremely convenient for getting data just as for
giving ability through the standard gracefully of prepared calfskin technologists. At long last,
various basic sorts of hardware like oars, timber barrels, and freshening gear privately
manufactured for a very long time, frequently by the calfskin producers themselves, and some type
of mechanical ability, however at a low level, has just been accomplished.

The outside layer from goatskin and cowhides are likewise in more worldwide request. Definitely,
a large portion of the calfskin bought from Bangladesh originated to have set up a decent
connection with merchants and various additional created nations. All the information is set up to
provide a thought of total-fare income completed creation cost in covering and completed calfskin.
There was no identity of fare obligation of the different fare, impetuses advertised. It is,
nonetheless, obvious that an enormous minor advantage exists in preparing crude - covers up and
leather in the outside, the underlying phase indicating undesirable net advantage. This is,
obviously, the assembling of completed cowhide from crude covers up and leather, that is
submission the most elevated only advantage per square feet in the area. This is confirmed that the
expense of region unrefined packs missing and leather well over the worldwide worth, because of
composed undertakings by some tricky western dealers who should implement the creating

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finished calfskin a piece of the country by stopping the planned limitation admission. Because of
the force applied by the government the industry had to relocate into a different location. It was
not only beneficial for the people residing in the previous area rather it was positive for the whole
sector. Leather processing requires discrete planning and implementation.

2.3 Management During Pandemic

Although a couple of countries have failed in their response to the COVID situation, others met
the test essentially more successfully. Some people died out of the virus (Coronavirus). The
virus not only affected people’s health but also ruined their emotional state. Many business and
official work has been hampered due to this virus exposure all over the world. Students are
sitting at homes as the schools get closed. People could not eat properly due to loss of income.
Mostly affected areas were the business sectors. The export and import business had to face a
lot of downfalls. Many people lost their business and money. Slowly people learnt how to deal
with diseases. People became more concerned and protective. Possibly the primary concern to
consider the pandemic is that it is possible to fight the COVID (Coronavirus Pandemic (COVID-19) -
Statistics and Research - Our World in Data).

Responding adequately infers two things: limiting the direct and the underhanded impact of the
COVID situation. Countries that have responded most successfully had the alternative to do
whatever it takes not to pick between the two: they avoided the tradeoff between ascending
mortality and monetary impact of the plague. The country New Zealand had the choice to chop
pollutions down and open their country inside. Other island nations were also prepared to
generally thwart a scene (like Taiwan, Australia, and Iceland). Nevertheless, not simply islands
had the alternative to curve the twist of pollution and hinder gigantic flare-ups. All of the
countries persevered through a more unobtrusive direct impact; in any case, they moreover
limited the unusual impacts since they had the alternative to convey lockdown measures earlier.

The graph of daily reported deaths around the world (Coronavirus Pandemic (COVID-19) - Statistics and
Research - Our World in Data)

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FIGURE:7-Source: Our world in Data Coronavirus Pandemic (COVID-19) -
Statistics and Research - Our World in Data

This implies that we should have the option to screen the quantity of affirmed cases and the testing
that a nation does. Since no scholastically stable association manufactures information, we spend
a lot of our labor on construction the necessary worldwide testing data set that permits us to figure
out the accessible tallies of affirmed situations.

‘Underneath is the explanation in extra viewpoint that we can increase in this layout, yet the quick
summary of this chart is that each line in this diagram shows you the new avowed cases as time
goes on – that bit of the diagram is basically the excellent epi twist – while the line concealing
shows you the idea of the data at each point true to form: the movement of tests that are positive.
Hazier shades of blue show a low certain rate, which suggests that a country is attempting
commonly so the avowed case check is likely closer to the certified total number of
cases’(Coronavirus Pandemic (COVID-19) - Statistics and Research - Our World in Data).

Daily new confirmed cases around the world for COVID19

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FIGURE:8-Source: Our world in Data Coronavirus Pandemic (COVID-19) -
Statistics and Research - Our World in Data

‘A couple of countries, like Australia, South Korea, and Slovenia do hundreds, or even enormous
numbers of tests for each case they find – the positive movement of these countries is therefore
underneath 1% or even 0.2%. Others, for instance, Mexico, Nigeria, and Bangladesh don't have
numerous tests – five or less – for each attested case. Their positive rate is particularly high’
(Coronavirus Pandemic (COVID-19) - Statistics and Research - Our World in Data)

FIGURE:9-Source: Our world in Data (Coronavirus Pandemic (COVID-19) -

Statistics and Research - Our World in Data.)

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In the beginning of the pandemic the mass population of Bangladesh were very reluctant.
Gradually the fear and awareness increased with time when the spread got out of control. Being in
the country from the very beginning of the COVID19 situation Bangladesh I can See the whole
picture. All the industries and related authorities were very much negligent about the seriousness
of the condition. It is safe to say that Bangladesh got 3 months as head start because the spreading
started from march in this country according to the above data. By visiting the different factories
during the coronavirus time period, it was observed that the management of the companies are not
well equipped to face such challenges. This has been one of the most difficult aspects of
Bangladeshi leather industry which is ensuring the health and wellbeing of the workers. The
handmade products of Bangladesh are well recognized all over the world and from that perspective
the works of the company are the main powerhouse of the company. If the safety and security will
not be provided and the required basic needs will not be met, then definitely it will be a backward
motion for the whole industry and there will be less interested parties from other countries even
after this pandemic is over. There are many companies that tried to follow the government’s policy,
but the majority of the people did not follow as such. The rate of spread of coronavirus is
tremendous and the economy took the blow because of unevenness. Here in the above map it is to
be observed that the size of the country compared to other countries are very small, but the
population rate is extremely high. It is in the second danger zone from the right because of this
situation many foreign buyers do not even want to hold the business meeting in Bangladesh.

3. Classification of leather products

There is a wide assortment of cowhide merchandise created in Bangladesh. The primary gatherings
are underneath:

3.1. Small leather merchandise

3.2. Medium leather merchandise

3.3. Heavy leather merchandise

3.1 Small Leather merchandise

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Little calfskin products or in some cases called individual cowhide merchandise which is normally
conveyed in pocket or satchels, including totes, wallets, key case, identification case, notecase,
card case, cigarette case what's more, stogie case, matchbox case, thus others. The greater part of
those items is made with no inside hardening of support. These calfskin merchandise require
cowhide having a thickness of about 0.5 mm to 1.00 mm. various sorts of covers up and skins
which are normally utilized in making little cowhide merchandise are, bovine softy, goat coat,
sheep napa, calfskin, and so on. (http://jbbc.co.jp/wp-content/uploads/2014/08/A-Report-on-
Leather-Leather-Goods-Industry-of-Bangladesh.pdf)

The Calfskin Industry was created in Bangladesh for a huge scope for the most part during
the 1970s as probably the biggest business of Bangladesh. The public authority considers 'cowhide
merchandise and footwear' as one of the principal development generators for the nation.
Bangladesh's calfskin industry makes cowhide-based items, for example, pieces of clothing, shoes,
belts, packs, and coats, bags, wallets, and some extravagant things. These items are sold both in
the homegrown and unfamiliar business sectors. Cowhide footwear is the quickest developing
section of the calfskin business. Bangladesh satisfies the need for about 10% of the world's
complete cowhide market. (An overview of Bangladesh leather industry (textiletoday.com.bd)

3.2 Medium Leather Merchandise

It incorporates purses, shopping packs, shoulder sacks, report cases, joint cases, etc. These packs
are produced using calf, goat, sheep and extraordinary skins and shrouds got done with a scope of
shadings which creates a decent appearance and look refinement and advancement. Calfskin,
which has a thickness of 0.8 mm to 1.2 mm, is utilized in the creation of medium cowhide
merchandise. Bovine softy, dry processed, dairy animals napa, sheep napa, goat, and buff softy
cowhide are generally utilized in making medium calfskin merchandise.( http://jbbc.co.jp/wp-
content/uploads/2014/08/A-Report-on-Leather-Leather-Goods-Industry-of-Bangladesh.pdf)

As of now, Bangladesh has 167 footwear and calfskin manufacturing plants, furthermore,
the nation has 163 tanneries that cycle crude stows away into completed cowhide. Interest in

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calfskin merchandise and footwear has been rising essentially. Bangladeshi businesspeople are
putting resources into consistent processing plants to deliver excellent footwear that will at last
decrease the reliance on the import of calfskin merchandise (Leather industry and its future in
Bangladesh - GRIN)

3.3 Heavy Leather Merchandise

These parts are made mostly from cow and wild ox covers up, which are solid and tough. The
covers up have unmistakable surface grain, the size goes from 20 to 30 sq. ft is a full cover-up.
Dairy animals and buff stow have a thickness of 1 to 1.5 mm are utilized for making hefty calfskin
merchandise. The sort of calfskin merchandise for making weighty cowhide products are, box
sides, Katti Leather, Split Leather, Cow Upper, Upholstery, Buff Softy, and so
on(http://jbbc.co.jp/wp-content/uploads/2014/08/A-Report-on-Leather-Leather-Goods-Industry-
of-Bangladesh.pdf)

4. Purpose of the Research

• This study will identify the main export related problems of the leather industry of
Bangladesh.

• The study will emphasize on the Japanese market and related aspects to enter the leather
industry.

• It will help us to understand the reasons for failure for SMEs and support us to do further
research.

• COVID19 situation and the analysis of the management style in the supply chain.

5. Research and analytics of the industry

The Government of Bangladesh has recognized the cowhide area as one with significant
development and venture potential positioned fifth in the fare acquiring area. Right now,

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Bangladesh creates and trades quality ox-like and ovine, caprine (wild ox and bovine; sheep and
goat) cowhides that have gained notoriety for fine-finished skins. In any case, the whole calfskin
area meets just 0.6% of the world's cowhide exchange worth US$78 billion.

5.1 SWOT analysis

Strength

● High development and speculation potential

● Accessibility of exceptionally presumed great calfskin
● Government pushed as a need area—arrangement of motivations and exporter-
accommodating approaches
● An enormous pool of cheap labor
● An exceptionally positive business climate guarantees the smooth working of the modern
units particularly in the Hazaribagh Tannery Area and the EPZs of the nation.
● Statement by the public authority making the area a "push area" and expanding the
● impetuses accessible to the area including 8% financing cost, reinforced stockroom office,
17% money motivations, Generalized System of Preference offices, and so on
● Quality instructional hubs like COEL and University.
Weakness

● Lacking utilization of better innovations and proper creation techniques

● Absence of R&D and preparing
● Reliance on costly imported crude materials
● Wasteful crude material acquirement and firms' absence of market data, and information
on business advancement openings and promoting systems
● Trouble in getting bank credits
● The accessible preparing establishments like COEL are new and can't take into account the
immense and ever-developing industry.
● With an absence of conspicuous neighborhood brands to go up against driving worldwide
brands in the global market.

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 ● With the proposed movement of the tanneries to Savar, the miniature and little firms will
confront an issue as migration is expensive and the public authority has just guaranteed
movement of just the tanneries and not different producers.

Opportunities

● Potential to duplicate RMG example of overcoming adversity

● Enormous and developing worldwide calfskin trade market and expanding interest for
Bangladesh's cowhide-based items
● Rising potential in the homegrown market
● Calfskin trades picking up energy lately
● Huge interest in developing business sectors
● Foundation and advancement of financial zones everywhere on the nation
● Foundation of new tannery domain in Savar
● There is an immense market in the side-effect section.
● Being biodegradable, clean, and dependable, there is an immense market for the items in
the nearby market.
● Migration of the whole tannery area to Savar will expand the agreeableness of the
neighborhood items in the global market and consider premium estimating.

Threats

● Stricter global principles

● Solid rivalry from other Asian economies
● Lifting of exchange special treatment, the not-so-distant future
● Significant expenses of working together
● The accessibility of substitute low evaluated imported homogeneous items made of Rexene
and other counterfeit strands.
● The pirating of crude stows away and skins to India and other neighboring nations is
prompting a shortage of crude materials in the nearby market for the creation of cowhide
merchandise and footwear.

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 ● Ineffectual and lacking measures taken to address the ecological contamination, wellbeing,
and security issues by the tanneries and makers of footwear can be a colossal danger to the
climate and human carries on with specifically.

Highlighting the strengths and opportunities, it is possible to continue to keep the reputation and
position of the leather industry as before, even in the Covid situation. Bangladesh has an adequate
amount of high-quality leather and cheap labor. This makes the country more powerful in this
section. Although there are threats of rivalry with other competitors but with the potential and
opportunity of building new tanneries and the homegrown market makes the leather sector
stronger.

5.2 Health crisis of leather Workers

“Most laborers in Bangladesh's fare arranged calfskin industry experience the ill effects of
extraordinary wellbeing risks because of perilous working conditions, another examination says.
Around 61 percent of laborers at Savar Leather Industrial Estate, close to capital Dhaka, are
confronting a wellbeing and security emergency, as per the Occupational Safety, Health and
Environment Foundation, a Bangladeshi work rights gathering. Its investigation, delivered in
Dhaka on Jan. 26, depended on meetings with 105 laborers with over eight years of work
involvement with tanneries, cowhide products, and footwear organizations. Somewhere in the
range of 93 percent of respondents said they had no preparation prior to joining the business, while
61 percent said they have been experiencing medical issues because of the nonappearance of any
formal or casual security systems at their work environment. Around 27 percent of laborers said
they were experiencing migraines, 19 percent from skin consumes, 16 percent from hand and leg
torments, 14 percent from sensitivities, and 11 percent from knee and back torment, the
investigation appeared”. (Bangladeshi tannery workers face health and safety crisis - UCA News)

"Most proprietors have no compassion toward laborers — they simply care for cash. Individuals
become ill, face mishaps and even kick the bucket. From the earliest starting point, the business
has been ineffectively controlled and it proceeds with today,". Shaheen Ahmed, administrator of
the Bangladesh Tanners Association (BTA), the primary exchange body, said the examination is
overstated. "It is genuine the business was not sufficient in the old spot; however it has improved

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a ton now. There may be a few tanneries that disregard laborers' privileges however most
consideration for laborers' privileges and security. Through our affiliation, we screen and tackle
ecological and working environment wellbeing issues in the business,"(Bangladeshi tannery workers
face health and safety crisis - UCA News).

According to Dhaka tribune, “The examination was directed at 16 tanneries, two cowhide
merchandise creation production lines, and two footwear ventures. Studies were led at a sum of 20
businesses to decide the word related wellbeing and security status in the cowhide flexibly
anchored from October 11 to November 20 a year ago in Dhaka and Savar. As indicated by the
investigation, 93% of the laborers didn't get any sort of preparation ever. Among the respondents,
32.7% saw deficient lighting, 22.1% synthetic gases, 21% contaminated climate, 19% synthetic
compounds of assembling measure, 17.3% residue, and the rest are guaranteeing commotion, ill-
advised ventilation frameworks, warmth, and absence of defensive gear are the reason for the
referenced medical conditions. Around 28.6% of laborers have guaranteed to utilize risky
hardware, 20.2% dangerous treatment of synthetic substances, 16.3% heedlessness, 12% elusive
floors, 11% materials, 10.6% helpless housekeeping, and 1.9% respondents likewise asserted open
needles as seen factors identified with wounds and mishaps. The investigation found that 67% of
laborers got security hardware from the proprietors. Among the laborers, 53% wear gloves, 53%
covers, 28% boots, and 10% of laborers use goggles as wellbeing gear”(61% leather workers have
health problems | Dhaka Tribune).

5.3 Tannery problems and Toxicity

According to Asian foundation, ‘The cowhide area is probably the most seasoned industry in
Bangladesh, and tanneries are the predominant business, representing 92 percent of all calfskin
laborers. As a wellspring of public fare income, calfskin is second just to instant articles of
clothing, and Bangladesh cowhide trades represent 10% of world interest. However, the business
has been disturbed lately, particularly the tannery subsector. Tanned cowhide tumbled from almost
$300 million in FY 2016 to under $90 million today. There are a few foundations for this
disquietude—including helpless showcasing, an incompetent labor force, and absence of
financing—yet boss among them has been exploitive work conditions and damaging natural

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practices that have brought global analysis and approvals’(In Bangladesh, Tanneries in Trouble | The Asia
Foundation).

Again, as per the Asian foundation, ‘For quite a long time, contamination from tanneries at the
principal mechanical site in Dhaka filled the Buriganga River, clearing out oceanic life and
constraining the city to depend vigorously on groundwater for washing and drinking. In any case,
in 2017, finishing an administration crusade that started in 2001, the leather treaters had to move
their plants to the recently constructed Tannery Industrial Estate (TIE) situated in Savar. Of the
220 manufacturing plants at the Dhaka site, around 90% of all tanneries in the nation, exactly 123
finished the move and are as of now working in Savar. To forestall the hazardous contamination
that happened at the old Dhaka site and carry the business into better consistence with client natural
necessities, the new area incorporates a focal effluent treatment plant (CETP), ready to treat
30,000m3 of fluid effluents daily, and extra offices for chrome recuperation, water treatment, and
slop treatment. However, some arranged abilities are not yet introduced, and the CETP isn't yet
running at full productivity, with the outcome that mucks are presently unloaded in an open yard,
and untreated water is routinely unloaded into the neighboring Dhaleshwari River, causing serious
contamination. It was trusted that the tannery move would expand in the calfskin area by carrying
the business into consistency with objective market prerequisites, however the hurried,
complicated, and fragmented development of the TIE seems to have defeated this expectation. For
the laborers, lodging, transportation, and food are more costly in Savar. Most specialists are as yet
impermanent, without any advantages or remittances for their higher costs. The majority of them
work without formal business arrangements, processing plant character cards, or arrangements for
leaves of nonattendance. Ladies get no maternity leave. Most specialists need individual defensive
hardware and must work devices and apparatus without sufficient wellbeing measures. Most
tanneries, aside from a couple of bigger ones, don't adhere to public or global principles for putting
away, shipping, or utilizing destructive synthetic compounds, and laborers and managers normally
experience the ill effects of sicknesses of the skin and lungs, cerebral pains, the runs, and weakness.
Some little and medium-sized production lines don't give unadulterated drinking water or sex
touchy washrooms.’ (In Bangladesh, Tanneries in Trouble | The Asia Foundation)

5.4 Impact of COVID19 on the industry

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According to The Dhaka Tribune, ‘Exporters of calfskin items and footwear were likewise
antagonistically influenced by the pandemic, which made the worldwide economy endure.
Neighborhood footwear and cowhide items goliath Apex Footwear's net benefits saw a sharp
decrease in the 2019-20 financial year, with the organization's deals dropping both locally and
globally because of the pandemic. As indicated by their budget summaries for FY20, Apex
Footwear made a net benefit of Tk6.32 crore, somewhere around 48.49%, which had been Tk12.27
crore in FY19. Thus, income per portion of the organization additionally declined by 48.50% to
Tk5.62, which was Tk10.91 in the past monetary. Organization Secretary of Apex Footwear Md
Omar Faruque said that the sharp fall of income was brought about by lower deals during the April-
June period. Then, another freely recorded organization, Bata Shoe Company (Bangladesh)
Limited's deals dropped 85.37% to Tk41.24 crore in the subsequent quarter (April-June) of 2020.
Deals additionally dropped 55.37% to Tk204.92 crore in the initial half year (Jan-June'20) of 2020.
Bata likewise revealed a misfortune for each offer at Tk89.23 for a very long time (Jan-Sep'20),
bringing about a Tk112.74 misfortune contrasted with Tk23.51 in income per share during a
similar time of the earlier year. Organization Secretary of Bata Shoe Md Hashim Reza said that
the huge deviation in EPS was because of lower benefit after duty contrasted with a year ago in a
similar period, accordingly, to bring down deals volume during the pandemic. Presently, the
footwear area represents 3.3% of the general fare container.’ (Covid-19 fallout: Footwear, leather
products sector yet to recover | Dhaka Tribune).

As per The Dhaka Tribune, ‘The homegrown market size of footwear is around Tk17,000 crore.
Homegrown interest in the footwear business is around 200 to 250 million sets per year. In 2018-
19, Bangladesh sent out $607.88 million worth of cowhide footwear and $271.53 million worth of
non-calfskin footwear. The worldwide footwear market was esteemed at $246 billion out of 2017
and was relied upon to reach $320 billion by 2021. There are as of now 220 tanneries, 2,500
assembling units, and 90 bigger firms working in the nation. Contrasted with the earlier year,
during the main quarter (Jan-April), by and large, fare profit from calfskin items and cowhide
footwear was $248.25 million out of 2019 though in 2020 it sent out $200.43 million, a 19.26%
fall, as indicated by the Leather goods and Footwear Manufacturers and Exporters Association of
Bangladesh (LFMEAB). LFMEAB President Md Saiful Islam said that their absolute fares had
decreased by half in the April-August period this year. Saiful Islam stated, in such basic conditions,

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part manufacturing plants of their affiliation were confronting tremendous financial effect as a
result of declining business and current requests in the midst of the pandemic. Organizations were
probably not going to return to common levels for in any event one more year if the pandemic
proceeded, he dreaded. For the most recent few years, Bangladesh's cowhide industry has been
experiencing an emergency regarding natural and social consistency issues, which have pushed
send-out profit down. In the last FY20, sends out from the area fell by 22% to $798 million. The
emergency developed with the moderate movement cycle of tanneries from Hazaribagh to the
Savar Leather Industrial Park (Covid-19 fallout: Footwear, leather products sector yet to recover | Dhaka
Tribune).

According to The Financial Express, ‘Examination head of the Center for Policy Dialog Dr.
Khondaker Golam Moazzem communicated his disappointment over the moderate advancement
of building up the key modern center. He said cowhide is one of the nation's most encouraging
areas through which the nation could get an attractive measure of fare profit every year. "The
public authority should act immediately and prepare the site at the earliest opportunity with the
goal that the area can pivot emphatically," he added. As indicated by the Export Promotion Bureau
(EPB), calfskin and cowhide items sent out declined by 21 percent in FY'20 to the US $798 million
which was $1.019 billion in FY'19. The fares essentially declined over the most recent half-year
(January-June) of FY '20 during the Covid-19 pandemic over the globe. The fare profit likewise
indicated a declining pattern in the continuous monetary year as generally shipment declined by
in excess of 15 percent in the period of July contrasted with that of the most recent year. Cowhide,
calfskin items, and footwear sent out enlisted a fare procuring of $89 million in July 2020 which
was $106 million in the comparing time of 2019, the EPB information appeared’(Covid spells leather
woes (thefinancialexpress.com.bd).

COVID19 has affected the leather industry from every angle. During the FY2019 the condition
was going up with the leather goods and footwear. The leather goods industry is relatively new
compared to the footwear industry in Bangladesh. In such conditions COVID19 has impacted not
only on the lives of workers rather in the whole supply chain management. The raw materials,
chemicals, accessories everything became scarce during this pandemic.

5.5 Challenges Tackled by the Industry

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‘Calfskin merchandise makers face comparative requirements. For small and medium-sized
footwear ventures, credit access is likewise a significant issue, as they have to put resources into
apparatus and present-day innovation. The absence of capital, costly imported apparatus, and a
shortage of talented labor force and chiefs are boundaries to moving into higher worth-added items.
In addition, preparing offices are insufficient and should be extended. Plan ability and item
development of these organizations is low, and quality control is incapable. The linkages and
coordination between the little and medium-sized firms and the lead firms for which they
subcontract are frequently powerless and uphold administrations are inadequately evolved. the US,
the largest importer of leather and leather goods, Bangladesh’s exports face steep tariffs.
Moreover, in the Doing Business surveys, Bangladesh typically is outperformed by most of its
regional neighbors. Costs of getting the requisite permits and approvals for business remain high,
including those that impact the leather and leather products sector. These permits include
numerous procedures and formalities involving trading across borders, which continue to amplify
the sector’s weaknesses and hinder investments’ (Developing the Leather Industry in Bangladesh (adb.org)

‘Current fare income from the calfskin business shows that there are clearly numerous difficulties
for which it couldn't get its focused-on sum. The nonappearance of incorporated approach; no
drawn-out strategy with respect to. Normal Facility Center (CFC), SME group advancement,
Branding/advancing. Bangladeshi calfskin items Political insecurity, defilement absence of in
reverse linkage industry for synthetics/frill, and inadequate nature of the items Illegal fare of crude
stows away/skins. Possible purchaser's rigid represents compliances, and postponement in building
Common Effluent Treatment Plant (CETP) at the cowhide town, Saver, Dhaka’(An overview of
Bangladesh leather industry (textiletoday.com.bd)

5.6 Demand of Bangladeshi leather goods in Japan Market

To understand the actual demand and other aspects about the Bangladeshi leather
products a survey was conducted. The survey was based on nine questions, 7 multiple choice and
2 written. Keeping in mind about the students' condition the survey was interesting. Their survey
was provided to the students with different types of pictures and diagrams. General graph of the
questionnaire is as follows:

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 Figure1 (a): Age graph

The first question was to understand the age range and ratio of the students. It was surprising that
APU graduates also took part in the questionnaire 12.6%. Not only the current students took part,
but many alumni members also took part. Almost all the age groups were covered with a good
ratio.

Figure1 (b): Gender graph

The ratio of the gender is very close which made our questionnaire a balanced one and easy to
understand.

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 Figure1 (c): Preferred product graph

Third question was with the picture of our current products. To understand the consumer
behavior and our designs it was vital. The answers are also very conclusive.

Figure1 (d): Color graph

Color is one of the basic requirements. Currently we are prepared to provide 25 colors but what
kinds of colors are liked by young people as well as our potential consumers was found by the
answers.

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 Figure1 (e): Desired product graph

The studies of the future projects lead us to this question. People wrote the names of their desired
products such as long wallet, folding wallet, laptop cover, and iPhone case so on.

Figure1 (f): Basic customization graph

Printing name of the consumers on the products is a very interesting concept and the majority of
the people have a positive comment about that.

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 Figure1 (g): Price graph

Students and job holders have different incomes. The idea is to know how much students can
afford. About the Bangladeshi leather and leather goods, the image of Japanese students was
very upward. They wanted to get premium quality leather and understood that the big brands
from Italy or France also take leathers from Bangladesh.

Figure1 (h): Written response 1

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We gave them the opportunity to express their idea in their own words. Most of the people
responded in positive. Most of them want to get a memento from the university during
graduation or entrance.

Figure1 (i): Written response 2

The responses of the students were very clear and helpful for the research. It is always very
difficult to rely on the survey because of the honesty behind the opinions. But in this case all
members of the university were very helpful and understanding.

6. Conclusion and Recommendation

6.1 Conclusion

Calfskin is the main area, which procures over a billion-dollar and is the second-biggest worker of
unfamiliar monetary forms after the attire area. It contributes 2.57% to public fares. Also, the
downtrend is an extraordinary worry for the economy," a previous consultant to an overseer
government AB Mirza Azizul Islam. In reestablishing the worldwide purchasers' certainty and
guaranteeing consistency, he proposes, the public authority needs to finish the CETP just as the
entire cycle of the movement. Past this, he adds, the public authority needs to begin marking the
area to modify the picture previously discolored by non-compliances. In the interim, makers

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encouraged the public authority to follow the proposals of the LEG in finishing the CETP and
absolute waste administration.( Bangladesh Leather Sector Needs Attention To Return On Positive Growth. |
FASHION PRESS24)

ETPs are practically non-existent in the tanneries prompting significant concerns expressed by the
bringing in nations, influencing the cost cited by them. The public authority is taking a shot at the
moving of the tanneries to Savar, from Hazaribagh which will consider the items to be set apart as
more eco-accommodating and costs correspondingly at the more exorbitant cost range. Be that as
it may, the moving of the tanneries will influence the miniature and little endeavors creating
calfskin merchandise as they won't be obliged in the public authority endorsed land and should
benefit costly terrains outside the tannery area (Leather industry and its future in Bangladesh - GRIN)

6.2 Recommendation

The COVID19 has created a very challenging situation for the Bangladesh leather industry. There
are still many scopes to improve and ample demand for the goods in the world. The quality and
the supply chain should be managed properly. The government must impose strict rules and
regulations to avoid such disasters in the future. Technological advancement is also required. The
machineries used in the factories are mostly installed after the liberation war of Bangladesh. There
are several traditional ways which should be maintained but the mixture of the tradition and
technology can bring a revolution in this sector. The organizations like BTA, LFMEAB, etc. must
play a more effective role and participate actively.

Also, social media can be a big uplift for the leather business in Bangladesh. The social media
platform has been ruling the show since the Covid-19 situation. As the export sector of the country
is suffering due to the pandemic, business can be carried out inside of the country via social media.
People can order sitting at home and at the same time the laborers can continue working taking
safety precautions. The leather footwear industry can also choose the social media route to
advertise and sell their products.

Lastly in my point of view, the key need is to create an effective and environment and work
agreeable homegrown tannery industry. To understand the leather business’s maximum capacity,

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all around composed strategy activities are required. With appropriate venture and strategy
changes, the leather industry can draw in huge interests in the area, differentiate and significantly
help its fares, and accomplish its objective.

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industry, An overview of Bangladesh leather industry (textiletoday.com.bd)

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