Home ›› 29 Oct 2021 ›› Front
Bangladeshi footwear manufacturers are gradually getting a foothold in export markets, meeting domestic consumption needs and transcending the national periphery.
According to the World Footwear Yearbook 2021, Bangladesh’s position in global footwear export moved two notches up to 16th in 2020 from 18th in the previous year.
On the other hand, the global ranking in footwear consumption improved by four notches to 9th in 2020 which was 13th in 2019.
In terms of production ranking, the country, however, showed no change, thereby remaining at 8th in 2020, but footwear production has increased by 1.5 times over the last decade.
The ranking is done based on the quantity of footwear exported and consumed by a country. In 2020, Bangladesh exported 72 million pairs of footwear, which were 79 million pairs in 2019.
Exporting footwear, the country earned $943 million in 2020, which was $1,067 million in 2019. The downtrend was due to the Covid-19 pandemic.
In 2020, Bangladesh sold a pair of footwear at $13.08 on average, which was $13.52 in 2019.
China is the number one exporter of footwear with 54.3 per cent market share, with India holding 10.2 per cent share followed by Vietnam 6.4 per cent and Indonesia 5.1 per cent, Brazil 3.7 per cent, and Turkey and Pakistan 2.4 per cent respectively.
Why Bangladesh performs well
“The footwear sector witnessed a good investment in the last few years. With the new investment, the number of factories increased, so did the capacity,” said Md Mizanur Rahman, chairman, Fortune Shoes.
The businessman pointed out that there is more space to grow both in domestic and global markets for which infrastructure development and policy support were required.
“If this happens, Bangladesh will be closer to Vietnam in terms of footwear and leather goods export,” observed Mizanur.
“On the other hand, if all factories in Leather Industrial Park in Savar go into production, exports will double.”
The exporter called for steps to remove barriers and obstacles to leather processing industry, making it environmentally friendly and compliant.
Saiful Islam, president, Leather goods and Footwear Manufacturers and Exporters Association of Bangladesh, told The Business Post that the leather and footwear industries grew mostly due to strenuous efforts of the private sector requiring government policy support to expand further.
“We have performed better in local as well as global markets. For retaining the growth momentum, we have to continue production, if necessary, by importing raw materials for which policy support is the key,” said the leader.
Footwear production and consumption
In 2020, Bangladesh entered into the top 10 clubs in terms of production capacity, grabbing more market share – some 2.1 per cent, which was 1.3 per cent in the previous year.
Bangladesh produced 423 million pairs of footwear in 2020, up by 3.93 per cent over 2019 when it made 407 million pairs.
The global footwear market was estimated at $365.5 billion in 2020 and is expected to reach $430 billion by 2031 growing at the rate of 4 per cent.
In terms of consumption, Bangladesh consumed 366 million pairs of footwear in 2020, up from 350 million pairs in 2019.
Exports turning around
According to the Export Promotion Bureau (EPB) data, during July-September period of FY22, the exports of leather and leather goods were worth $271 million, up by 20.52 per cent over the same period of the previous fiscal.
The footwear export earned $169 million, which was $148 million in the same period last year.
Import dependency declines
Over the last couple of years, imports of footwear showed a downturn. In 2020, the country imported 15 million pairs of footwear worth $72 million. In 2019, 22 million pairs worth $74 million were brought from abroad. In case of import, Bangladesh ranked 84th in the world.
How to grow further
The country is yet to avail itself of the opportunity from enough supply of raw materials to become an export leader in the global market, according to Khandaker Golam Moazzem, research director, Centre for Policy Dialogue.
“This is because the leather processors fail to meet their buyers’ requirement of complying with the international standards,” said the economist.
On the other hand, most tanners are not certified by the Leather Working Group (LWG), which is a requirement of the global buyers to ensure environmental and health safety.
Experts suggest setting the Centre Effluent Treatment Plant at Savar Leather Industrial Park to improve compliance issue in order to gain certification from LWG and meet the buyers’ terms and conditions.
They also asked the government to take joint initiatives with stakeholders to improve compliance and environmental safety.
In this regard, Leather Goods and Footwear Manufacturers and Exporters Association President Saiful said Bangladesh will be able to grab more global market share if compliance is ensured and LWG certification obtained.
“With an export diversification plan, the government has to set a target to earn $5 billion by 2025 from leather and leather goods. It is quite possible if we can improve our compliance and quality of goods,” he said.
Before Covid-19, leather and leather goods export were over $1 billion. During July-September of FY22, Bangladesh exported leather and leather goods worth $271 million.
Sources said the Central Effluent Treatment Plant does not function properly, which is a problem for the leather sector, and it requires to score 200 for CETP compliance before getting tannery accreditation or LWG certification.
The stakeholders urged the government to appoint EU consultant to improve CETP alongside taking steps for solid waste management in Savar tannery estate.
“Now buyers are presumably turning to single country dependency. Therefore, it is an opportunity for Bangladesh to produce diversified products and increase the volume of export,” they said.
