Leather goods and shoe manufacturing industry experiencing continuous growth

After the Liberation War, Bangladesh’s leather and shoe manufacturing started to grow in the late 1980s. Today Bangladesh has transformed itself from a shoe and leather goods importing country to shoe and leather goods exporting country. This didn’t happen overnight, and this sector had to overcome various difficulties to reach this position. The annual export of footwear items has increased from a Tk 0.14 million in 1972 to Tk 1.9 billion in 1997. This sector started to see real growth and development in the 1990s when exports exceeded the Tk 1 billion mark. Exports of leather footwear grew by 527 percent between 1990-91 and 1996-97, which was extraordinary. Back then, we still lacked funding, essential machinery, and not to mention skilled labour and supply chain managers. According to Banglapedia, the list of export markets of footwear from Bangladesh includes Japan, the volume leader with a market share of 34 per cent, followed by the UK at 11 per cent, Spain at 9 per cent, Germany at 8 per cent, Russia at 7 per cent, Italy at 5 per cent, and USA 2 per cent.

According to media reports, the market size of the local footwear market in Bangladesh in 2020 was around Tk 17,000 crore. Every year 378 million pairs of shoes are manufactured in Bangladesh. The local footwear market demand is 200 to 250 million per year. Again the Export Promotion Bureau informs that Leather Products and Leather Footwear accounted for about 12.5 per cent, 27 per cent and 60 per cent of total exports from the sector in fiscal 2020-21. In the first seven months of the current financial year, the export earnings from the leather industry stood at $687.4 million, an increase of 29.66 per cent from a year ago. In the corresponding period of the previous financial year, the income was $526.6 million.

The history of shoe and leather manufacturing in Bengal goes back a long way and can be traced back to the early 1700s. Different groups of people have been associated with this trade for centuries. A group of Chinese craftsmen first settled in Bengal, and then the Urdu-speaking Bihari people settled here learned the crafts from them. When the Chinese craftsmen left Bengal, the Biharis took over, and subsequently when the Biharis left, Bengali craftsmen took on the task. To put this industry’s history in chronological order and give some perspective that today’s youth can relate to, it is important to mention that there were no large-scale footwear firms; thus, there was no mass production. However, area-based cottage-type footwear industries met the local demand. To meet the demand for luxury leather goods and footwear, people who could afford it used footwear imported from Kolkata. After the 1947 partition, footwear was imported from West Pakistan to East Pakistan. Bata was and still is now a household name in Bangladesh. The company started its first factory in Tongi in early 1962.

Bata was founded back in 1894 in Zlin, Czechoslovakia, by Thomas Bata. Thomas Bata, who was the ninth generation shoemaker in his family, had quite an interesting life and revolutionised the shoe manufacturing industry at that time. The reason he had a successful business life is that he followed a business principle that was not only good for his businesses rather, they proved to be extremely helpful for his community and other people in various parts of the world. Maybe we will be able to discuss more about him in another article in the future. Back in the 1960s, Eastern Progressive Shoe Industries (EPSI) also established its production plant, to be precise, in 1967 and started exporting footwear to USSR, Czechoslovakia, and England. Bata and EPSI held a significant share in the Bangladesh footwear market also. Just imagine shoes made in the country are being exported to different parts of the world.

The irony here is that even back in the 1970s, the purchasing capacity was not that much, and many people in the country could not afford footwear. Even in the early 2,000s, many rickshaw-pullers or day labourers didn’t wear slippers or ‘chappals’. Things have changed for the better. According to health experts, hookworm infection-induced anaemia is no longer a public health concern in our country. Thanks to non-brand shoe manufacturers, people with limited income can afford to buy shoes and leather goods. Nowadays, 22,000 factories and 12 lakh people are involved in the non-brand footwear industry. Small entrepreneurs have flourished gradually in this sector, along with the big companies.

According to the 2016 data from SME Foundation, around 5,000-6,000 shoe factories were located in old Dhaka, 200 in Dhaka’s Mirpur and Pallabi area, and more than 10,000 in Kishoreganj’s Bhairab, 600-700 in Chattogram’s Madarbari, 300 in Brahmanbaria and 100 in Rajshahi. There are footwear factories also in Cumilla, Gazipur, Narsingdi, and Narayanganj. Another positive news that came out in the print media is that a top footwear manufacturer is setting up a shoe industrial park, the first of its kind in Bangladesh, to supply import substitute raw materials and accessories to producers, boost exports and attract foreign investment. The Bangladesh Investment Development Authority (Bida) permitted the establishment of the Bangladesh Shoe City Ltd in September. Nasir Khan, chairman and managing director of Jennys Group, is the park’s founder.

After the Liberation War, the leather and shoe industry experienced massive setbacks because people didn’t have enough money, and the demand was down. However, from the 1980s, Bangladesh’s footwear and leather industry started to make a comeback. Nowadays, many new big or small footwear-manufacturing factories have been established in our country. Notable among them are Apex Footwear, Bay Emporium, Legacy Footwear, and Paragon Leather and Footwear Industries. Today the industry is experiencing robust growth.

Despite the growth in the sector, the traders’ associations have often expressed their dissatisfaction over specific issues. As per several media reports, Dhaka Small Footwear Industry Owners’ Association, stated how factory-made shoes brought from China and India under low tariffs are hurting the local industry. They want the government to take immediate action on these matters, for example, policy support, easy and low-cost bank loans, training, and modern equipment, and the introduction of more import tariffs on footwear imports to save the local manufacturers. They also stated that according to their estimates, the number of small shoe factories in the country would increase to 30,000-35,000 in the next 10-12 years, provided that the government supports them with the necessary policy measures.

This sector is doing quite well in terms of export, and given the proper support, it will only move forward in a positive direction. The leather and shoe manufacturing industry is making a comeback after the normalization of the Covid-19 pandemic. We would urge the authorities concerned to take concrete actions and implement policies that will secure the continuous growth of this sector.

The writer is a journalist. He can be contacted at aizanbaba.gmail.com