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Bangladesh has established itself as a key player in South Asia’s leather sector, supported by an abundant supply of raw hides, low labor costs, and strong government support. Though once hovering around the $1 billion export mark, the industry still trails its true potential—a gap driven by certification challenges, fragmented supply chains, and environmental compliance issues.
Raw Materials & Manufacturing Backbone
The country annually produces 350–400 million sq ft of hides, translating into around 378 million pairs of shoes a year. With 165 tanneries and an equal number of finished leather and footwear firms, Bangladesh is steadily evolving from exporting basic materials to finished, value-added goods.
Export Trajectory
Recent data shows:
- FY 2023–24: Footwear exports reached $960 million
- FY 2024–25 (July–May): Total leather exports stood at $1.058 billion, up 12.6%
While leather footwear saw a 26% increase, other leather goods and finished leather faced slight declines.
Key Constraints
Despite improvements, several major challenges persist:
- Tanneries without Leather Working Group (LWG) certification face barriers in entering high-value international markets, limiting the industry’s global competitiveness.
- Environmental and waste compliance: Central Effluent Treatment Plant (CETP) installation and waste management remain incomplete
- Fragmented raw hide collection: Inconsistent preservation (especially post-Eid) leads to quality loss
- Skill and finance gaps: Lack of modern training and limited access to capital stifle competitiveness
Strengths in the System
- Natural resource advantage: Domestic hides reduce import dependency and add value
- Workforce scale: Over 850,000 workers (direct & indirect) support production
- Government initiatives: Policies have shifted focus from raw hide to finished goods
Educational infrastructure plays a vital role, with the Institute of Leather Engineering & Technology under Dhaka University driving research, innovation, and workforce skill development.
Future Outlook & Growth Potential
There’s a clear shift toward value-added processed and finished leather, which can increase per-unit returns by up to 90%. Targeted actions could help leather exports soar from current billion-dollar levels to $5 billion within a decade, provided improvements in certification, infrastructure, value-chain integration, training, and environmental compliance.
Strategic Takeaways
- Get certified – LWG accreditation will unlock premium markets.
- Ensure full implementation of infrastructure projects—especially the CETP and waste management systems—to meet environmental standards and support sustainable growth.
- Professionalize raw-hide logistics – Standardized collection and storage ensure better quality.
- Upskill and finance – Invest in technical training and provide affordable credit.
- Expand export offerings by focusing more on footwear and finished leather products, which offer higher profit margins compared to raw or semi-processed materials.
