Wednesday, September 20, 2017 | ePaper

Tannery relocation hits export earnings

Disruption in output blamed

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Badrul Ahsan :
Country's earnings from exports of crust leather in the just-concluded financial year (2016-17) dropped more than 16 percent.

Sector people attributed such a drop to the disruption in production because of the relocation process of tanneries.

They say their earnings from the sector was positive in the 2015-16 fiscal year but only relocation anomalies brought down their performance in the last fiscal.

The government had cut the utility services to tanneries located at Hazaribagh in capital Dhaka on April 8 this year in compliance with a High Court directive to speed up the long-awaited tannery relocation to the newly constructed Leather Industrial Park at Savar, on the outskirts of the capital.

Export Promotion Bureau data show export earnings from crust leather exports declined by 16.30 percent in FY 2016-17 to $232.61 million from $277.9 million in the previous fiscal.

Such earnings had been on the decline in the FY17 but the situation mainly worsened after the disconnection of gas, water and power supply to tanneries located at Hazaribagh in April.

Before cutting the utility services to the tanneries, such export earnings in the July-March period of FY17 fell by only 4.79 per cent to $201.05 million from $211.17 million in the same period a year earlier.

The earnings from leather and leather product exports in July-March of FY17 grew by 8.41 per cent to $922.96 million from $851.33 million in the same period of FY16.

In April-June of FY17, export earnings from leather and leather products registered a minimal 0.46 per cent growth to $311.04 million from $309.62 million in the same period of FY16.

"The utility cut hit the sector as a good number of tanneries are yet to start production in the new location," Bangladesh Tanners Association Chairman Shaheen Ahmed told The New Nation on Saturday.

He said crust leather production will face disruption for another year as the tanneries were not getting gas connection after their relocation to resume production.

Shaheen said that leather goods and footwear maintained its export growth in the period as exporters imported crust leather to retain market share in the globe.

He said only six to seven tanneries got gas connection and were producing crust leather in the Leather Industrial Park at Savar and most of the factories were producing wet blue leather.

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