Shah Alam Nur :
Leaders of tannery owners have said that they need more time to relocate their industrial units from Hazaribagh area of the capital to Savar Tannery Estate.
“It’s not possible to relocate tanneries from Hazaribagh within 72 hours,” Bangladesh Tanners` Association (BTA) President Shaheen Ahmed told The New Nation on Monday.
He said the construction of the Central Effluent Treatment Plant (CETP) is underway in Savar. No environment of relocating tanneries is created there yet.
“We need soft loan for relocation as tanners are going through liquidity crisis,” Shaheen said.
He said the tannery owners will have to invest around Tk 5,600 crore to establish new plants and begin commercial production.
“We are sincere in our efforts to relocate tanneries soon. But we need access to low-cost funds as leather is a capital-intensive industry,” said M Abu Taher, Chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters’ Association.
He urged the government, especially Bangladesh Bank, to take necessary steps to arrange soft loans for the tanners.
He said most tannery owners will be able to start the relocation if the government arranges loan at a 5 per cent interest rate and disburses the compensation money of Tk 250 crore immediately.
He said the tanners will have to invest around Tk 6,000 crore to relocate the factories, set up new plants and begin commercial production.
Saiful Islam, Senior Vice President of Leather Goods and Footwear Manufacturers and Exporters Association of Bangladesh, said tanneries need to be relocated as soon as possible for the sake of environment and exports.
He said many international buyers are not giving orders to Bangladesh mainly due to a long delay of the tannery relocation.
He said “Bangladesh will be able to earn at least $5 billion in exports from leather, leather goods and footwear annually by 2018 if it can properly address environment and compliance issues and give policy support for higher value added products in the sector by this year.”
Other leader of the sector said most tanneries have been working since January 2015 to set up their units at the Savar Tannery Estate.
He said, “We are not sitting idle. It takes time to set up a factory. It cannot be done overnight.”
About 50 per cent of the tanneries would be ready to start commercial operation by May and the rest by the end of 2016, he added.
He said the CETP is not ready yet although 26 months have passed against 18 months as fixed earlier. The pipeline to bring pollutants from factories to the CETP is not ready yet.
According to insiders, more than 50 per cent of the work to set up the CETP has already been completed, making two of the four units of the plant ready to process pollutants. The CETP now can process pollutants from 50 factories but only 20 factories will be ready in the next one month.
The Industries Ministry has allocated plots on the 200-acre leather estate to 155 tannery owners through BSCIC, a wing of the ministry that is implementing the project.
The US and European nations, key customers of Bangladeshi leather and leather goods, want to source products from factories that have a clean production process and safe working environment.
In 2014-15, Bangladesh exported leather and leather goods worth $1.13 billion, against $1.12 billion in the previous fiscal year, making it the second highest contributor to national exports after apparel.
Bangladesh has some 3,800 micro, small and medium enterprises and 110 large firms in the sector, employing about 70 lakh people. About 95 per cent of leather and leather products made in Bangladesh are sold abroad.
Of total exports from the leather industry, 60 per cent go to European markets, 30 per cent to Japan and 10 per cent to the rest of the world, according to industry insiders.
