The End of the Tannery Industry of Bangladesh-from Second Largest Source of Foreign Earnings to "on the Brink of Collapse"

 

Bishnu datta | Session 2020-21 | Department of Finance

Every year when Eid-ul-Adha comes, a very common repetitive topic arises and shows in the media that seasonal sellers of rawhide are not getting the fair price, and millions of dollars of rawhide are wasted because of the unfair price scale.

 

In 2023, the export of leather and leather products in Bangladesh was $1107.35 million. That depicts the international market has significant global interest in Bangladeshi leather products. According to the data of the Department of Livestock Services, a total of 1.07 crore animals is sacrificed this year. If it is true, why are the rawhide seasonal businessmen not getting paid? What are the key factors behind the downfall of the tannery industry in Bangladesh?  

 

This Eid, I talked with my uncle about this and he said, "In the early 2000s,  we used to sell a cowhide for over Tk1,000 when the cow itself cost us  between Tk15,000 and Tk25,000, but now he sells it over 100-200 taka  when the cow is over 1 lakh" 

 

If we observe the supply chain, after sacrifice, some local vendors collect the leather of the animal at a fixed price that the government decides or we donate to an orphanage. Then the main story begins.  The local vendors and orphanage authorities sell it to the wholesalers.  They syndicate to buy the raw leather at a cheap price from local seasonal sellers and those poor people have no other options without accepting the price and selling it at a loss.  

 

Tannery owners claim that the depreciated value of rawhide today is due to the insufficient environmental standards in the tannery sector. The abundance of rawhide during Eid, creates difficulties for them to obtain and process the material and the increased price of preservative chemicals. 

 

5 key problems were found, which are responsible for this tannery industry crisis are discussed in the following paragraphs.

 

Firstly, lack of machines that are needed to preserve and furnish the rawhide. In this session, many rawhides come to tannery but don’t have enough capacity to manage all.  

 

Secondly, international certification ensures that the process of storing and making goods of leather doesn’t harm the environment without which international buyers don’t buy the leather. We don’t have it as the chemicals are thrown into Buriganga River and in Dhaleswori River and it causes harm to the whole ecosystem of those areas. As a result, the US and UK don’t buy any of our leather. Tannery owners need to sell it at a 1 dollar price to China and other neighboring countries.  

 

Thirdly, the chemical price and sale price are increased automatically when the occasion comes. Syndicates of that sector are accused of this price hike and inflation is also responsible which is now very much uncontrollable. As a result, the cost of preserving the rawhide is increased.  As a result, they need to pay a good amount of money to preserve it and afterward, they need to sell it at a cheap price.  

 

The fourth one is the lack of skilled labor. We already have a vacancy for skilled labor in processing the rawhides. Those working people don’t know the proper way to do this. For this, the quality of the leather cannot be maintained and any local or international company is not willing to buy the downgrade quality leather. For that tannery owners don’t get enough price.  

 

Finally the lack of supervision of the government, ministries observing this industry are very reluctant to take effective steps that will help to grow this industry. Whenever the occasion comes, they give the assurance of solving all the problems but it's harsh but true that they still failed to ensure that tannery waste will not damage the environment. Even if they transfer the largest tannery in Bangladesh from Savar to Himawetpur.  Once waste from Savar is dumped into Buriganga it damages the whole nature of Buriganga but after transferring it to Himawetpur the question is “In the new area, people don’t live here? What about the nature of the new area?” the answer is nobody cares. Now the waste is dumped into the Dhaleswary River without purification and damages the whole ecosystem of this area. Also, the government cannot control the syndicate of the chemical and salt industry. What they do is set a minimum price to sell the rawhides but it is ignored completely by the wholesalers.  

 

This industry has a huge opportunity to contribute to foreign income sectors. But for the mismanagement and syndicate of the middleman, this whole industry is now on the verge of death.  

 

Once it was the second source of earning foreign income but now see where it stands. In 2023, the export of leather and leather products in Bangladesh was $1107.35 million which is 16% less than in 2022.  And this downfall continues till now.  Still, the government has time to take effective measures to protect this industry or we lose another vital revenue stream.