The export-oriented leather, leather footwear and leather goods manufacturers in Bangladesh are facing a shortage of raw materials and accessories, which in turn is affecting their lead time.
Industry insiders on Thursday demanded setting-up of duty-free bonded warehouses to make their business vibrant and help them reach a target of $5 billion in exports by 2021.
They also sought support for establishing a backward linkage industry for the leather sector to reduce dependency on import of accessories, while speaking to The Business Standard at the Bangladesh Leather Footwear and Leathergoods International Sourcing Show (BLLISS) 2019 at International Convention City Bashundhara in Dhaka.
"We need various types of accessories to manufacture footwear, which is not available in the local market. If the government provides support, we can produce international standard footwear for the export market," said Rezbin Hafiz, director of People's Footwear and Leather Goods.
Apex Footwear Limited Manager of International Business Md Rafiqul Islam said: "We usually import some raw materials as per our buyers' requirements, but it is very challenging to get them released from the port on time."
Sometimes, it may take at least 20 additional days, which puts pressure on maintaining our lead time, Rafiqul added.
Since global brands and buyers are very concerned about environmental sustainability and other compliance issues, we cannot use local raw materials, he added.
Many manufacturers said they face a lot of challenges at Chattogram port in releasing their goods, which affect their lead time.
Speaking at the event, Commerce Minister Tipu Munshi also echoed the concerns of the industry people and their need for bonded warehouse facilities to ensure smooth supply of raw for the export-oriented leather industry.
"Small and medium companies have no capacity to get bond license, but they need to have good accessories ready in hand. This is why I think at this moment a central bonded warehouse is very necessary," said Tipu, while addressing the inauguration ceremony of the three-day-long LEATHERTECH Bangladesh 2019.
The commerce minister also mentioned that the leather sector has to upgrade the quality of its products for international acceptance, explaining that he said a bag can sell at $50, but it would be sold at $2,000, when you add value on that through good design, quality materials and brand name.
Apex Footwear Managing Director Syed Nasim Manzur said the government should provide duty-free facilities to store raw materials for the leather industry. "Lead time has become a big challenge for the industry," he added.
Md Mahamudul Hasan, manager of HAMKO Leather Ltd, said the company is highly dependent on imported materials and accessories to make footwear and leather goods.
"The customs authority takes over 12 days to release their goods after the arrival of our goods at the port," he added.
The seventh edition of the mega event is being jointly organized by the Bangladesh Finished Leather, Leathergoods and Footwear Exporters Association (BFLLFEA) and ASK Trade and Exhibitions Pvt Ltd.
Leather goods and Footwear Manufacturers and Exporters Association (LFMEAB) President Md Saiful Islam said such exhibitions create an opportunity to know what new technologies are coming to the industry so that they too could implement those.