B'desh's leather sector loses billions due to poor infra, poor compliance

Despite producing roughly 4 per cent of the world’s rawhide, an estimated 350–400 million square feet annually, Bangladesh captures only a fraction of its leather sector's financial potential. According to industry leaders, decades of neglected infrastructure and compliance failures at the Savar Tannery Industrial Estate have locked the country into low-value exports, shutting it out of premium global markets, The Daily Star reported.

Md Mizanur Rahman, director of the Institute of Leather Engineering and Technology at the University of Dhaka, estimates that the sector could generate $10–$12 billion in export earnings from existing raw materials alone. Because most raw materials are sourced locally, the industry offers a massive 90 per cent value-addition opportunity. Currently, however, foreign buyers purchase Bangladeshi leather for a mere 40–50 cents per square foot, processing and reselling it internationally for around $2.

This steep value loss is driven by three systemic bottlenecks: pervasive waste, The Eid-ul-Azha surge and the compliance gap. Nearly 30 per cent of the country’s leather is wasted due to poor preservation, inadequate processing capacity, and unutilized by-products. Transforming tannery waste into lucrative sub-industries like collagen, gelatin, fertilizer, and animal feed would spike the market value of rawhide. Moreover, a staggering 40–45 per cent of the annual rawhide supply floods the market within a three-day window during Eid-ul-Azha, routinely overwhelming processing capacities and crashing prices.

Md Tipu Sultan, chairman of the BFLLFEA, flags compliance as the ultimate barrier to growth. Only a handful of local factories hold the international certifications required by lucrative US and European markets. Unlocking the sector's multi-billion-dollar potential hinges on rapid infrastructure modernization and rigorous compliance upgrades. As Rahman notes, "Nothing from leather should go to waste. Every part has economic value."