Flaws In The Leather Industry

Lack of certification and flaws in design Hold back the leather sector from doing fine.

Grievance of rawhide traders and rotting of unsold rawhide have become a recurrent image after Eid al Adha, when millions of animals are slaughtered in a religious ritual. This year is no different. Despite Bangladesh being the top Muslim majority country where highest number of animals is sacrificed during Eid, its leather export is still hovering around $1 billion. This year 9.3 million animals were slaughtered and 3.1 million rawhides were destined to rot near road side. This is a govt furnished data.

The reason for stagnating leather export is bizarre. Government relocated most of the tanneries at tannery estate,built by the govt,in Savar. Later it was found that its Central Effluent Treatment Plant (CETP) does not meet the criteria,set by EU, to deal with chromium laden sludge(see "Compliance Failure Costs The Bangladesh Leather Sector Up to $10 billion",Shafiun Nahar Elma,Textile Today,January 01,2026,https://textiletoday.com.bd/compliance-failure-costs-the-bangladesh-leather-sector-up-to-10-billion). This failure in compliance leads to Leather Working Group (LWG) certification, which is crucial to get international clients. In addition, LWG certification is needed at various levels in the industry including traceability of leather,use of chemicals etc. More than 50% of our tanneries are not compliant.

UNDP in a study titled " Investing In Bangladesh's Leather Industry: Challenges & Solutions " finds that lack of environmental compliance costs export earnings between $5 billion and $10 billion annually. Lack of certification results in 30% or 40% lower prices for leather in international market.

What is interesting LWG certification issue pushed Bangladesh to sell its wet blue leather to China at a lower price. Bangladesh's leather industry is now heavily reliant on Chinese buyers for its leather export. This increasing reliance blocks us from getting a competitive export price. China emerges as a price setter for our leather industry in the wale of LWG certification issue. This status quo needs to be changed.

UNDP study suggests that resolving the certification issue and additional investment between $300 million and $400 million will bring $5 billion worth of leather export earnings by 2032.

Bangladesh needs to alter image of exporter of raw materials and should emerge as exporter of high-end finished goods. In that endeavor leather industry offers a high potential. Some design flaw in infrastructure,lack of awareness in certification issues and lack of investment in product diversification are holding back the industry from taking off.