The country's tannery industry is facing a production crisis as loads of imported chemicals, required for animal hide processing, are stranded at the port due to complexities regarding bond licence renewal.
Tanneries must have to obtain clearance certificates from the Department of Environment to renew their bond licences.
It is the busiest time of the year for the leather sector – the country's second-largest export sector. The tanneries collect and process the lion's share of hides from the animals sacrificed during the Eid-ul-Azha.
According to sector insiders, tanneries are already hit hard by the ongoing cyclical load shedding and fuel price hike. On top of it, some tanneries have stopped their production due to a shortage of chemicals.
In a notice issued on 28 June, The Customs Bond Commissionerate of the National Board of Revenue (NBR) suspended the renewal of bond licences of 27 tanneries due to environmental non-compliance.
Md Shakawat Ullah, general secretary of Bangladesh Tanners Association and proprietor of Salma Tannery Limited, told The Business Standard (TBS) on Sunday, "I have stopped collecting salted rawhide for the last 15 days. The existing chemicals in my factory can continue production for a maximum of 7 days. In this situation, if the bond licence is not renewed and the chemicals are not released from the port, there will be no other option except halting production during the peak season."
"In a recent inter-ministerial meeting, a decision was made to provide environmental clearance to the tanneries. But we have not yet received the clearance," he said.
Mokhleshur Rahman Ripon, the CEO and technical adviser of Samina Tannery in Savar's Leather Industrial Park, whose bond licence tenure ended last June, told TBS, "For the past 15 days, we have been collecting chemicals from the local market at extra cost to keep the production afloat. Even so, the factory is running 3 days a week and remaining closed for three days."
"By buying chemicals from the local market at an additional price, our production cost is increasing by at least 30-35%. It is not possible to continue like this for a long time," he said.
Currently, the company has 4 containers of chemicals, worth about $2-300,000, waiting to be released at Chittagong port, Mokhleshur Rahman said.
When contacted, Zahirul Islam Talukdar, deputy director of the Department of Environment (Dhaka), told TBS, "At least 70-75 tanneries' applications for the environmental clearance are pending at the office, including the applications of 27 tanneries whose bond licence renewal was suspended."
When asked if there is a possibility of the bond licence holders getting the licence quickly in view of the application, this official said, "We are hopeful".