‘Lack of LWG certification main challenge’

Tannery owners are unable to pay fair rawhide prices as they cannot export finished leather to renowned buyers, especially in the West, for not having the Leather Working Group (LWG) certification, says Bangladesh Tanners Association.

Its Chairman Md Shaheen Ahamed told a press briefing in the capital on Wednesday tanners would be able to pay fair prices after obtaining the LWG certification.

Bangladesh had 222 tanneries before the industry’s relocation from the capital’s Hazaribagh to the Savar tannery estate began in 2017. But Bangladesh Small and Cottage Industries Corporation allocated land for 156 tanneries in Savar.

Bangladesh is yet to get the LWG certification due to some unfinished work at the Savar estate, including building the central effluent treatment plant and arranging waste management.

Shaheen said Bangladesh’s main finished leather export destination is China, which pays $1 per square foot while renowned brands pay $2.

“The global demand for leather and leather goods has increased, but we cannot sell to reputed buyers as we do not have the LWG certification. That is why exporters are bound to export at below the production cost,” he explained.

He also said most tanneries processing goatskin had not got plots in Savar, except for five to six, after the relocation.

“On the other hand, goatskin demand in the global market has decreased. That is why demand has fallen in our country as well.”

Shaheen expected the rawhide sector would turn around and prices would also increase when 30-40 tanneries would get the LWG certification.

He further said tannery owners had bought 5.5 lakh strips of rawhide so far this year, expecting they would buy 95 lakh strips at year end.

The government increased sacrificial animals’ hide prices by Tk 7 to Tk 47-52 this year, but the move did not impact the market as expected.

As the initiative failed to attract seasonal traders, especially in rural areas, owners mostly donated hide to madrasahs and charities.

Moreover, like in the last three years, thousands of strips of goatskin and byproducts of cowhide were buried or dumped on the street this time due to a lack of buyers.

Wholesale cowhide prices increased slightly this year in the capital. A 25-square-foot strip was sold at Tk 750 on average, up from Tk 700 last year.

But prices did not increase outside Dhaka, and many rural areas faced a shortage of seasonal traders, causing prices to decline there.