Hide and skin merchants have requested tannery owners to repay Tk150 crore, which they owe to the merchants, 15 days ahead of Eid-ul-Azha. Otherwise, rawhide collection at the field level will be hampered after Eid, they said.
If the amount is paid 15 days before Eid-ul-Azha, merchants will be able to preserve the rawhide properly. Besides, they can buy the salt needed to preserve the skin, and rent warehouses, said merchants.
"Every year before Eid-ul-Azha, the banks give loans to tannery owners to buy raw hides. The owners pay 30%-50% of the arrears two or three days before Eid, and merchants have to work in a hurry. This time, we want the full amount," Bangladesh Hide and Skin Merchants Association General Secretary Tipu Sultan told TBS.
In 2019, the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) took the initiative to settle a long-running dispute over the payment of arrears for the sale of raw hides, and merchants got some amount back.
Tipu Sultan further said it is disappointing that the full arrears have not been repaid even after the FBCCI's initiative. Out of 152 listed tanneries, 30-35 tanneries are in arrears. There are 194 listed merchants in the Posta area of Old Dhaka who are in a capital crisis, some of whom are even leaving this business.
Bangladesh Tanners Association President Shahin told TBS that there is no new arrears for the last two to three years. Many owners have trouble paying back the money they owed before, while many were affected by the relocation of tanneries from Hazaribagh to Savar Leather Industrial City. As a result, they cannot pay the arrears.
"This time we will be able to repay some money only when the bank pays the loan to buy hide," he added.
Merchants preserve raw hides with salt before selling them to tannery owners. Merchants in the Posta area said they collect hide from all over the country through representatives. They have to be paid a few days before the Eid. If tannery owners do not pay the arrears merchants will be in great hardship.
Merchants said it takes eight to nine kilograms of salt to preserve a medium-size cowhide. This time the price of salt is also increasing. If they get money quickly, they will be able to buy salt.
According to the Leather and Leather Products Development Policy 2019, about 250 million square feet of raw hides (hides and skins) are processed annually, of which cowhides are 63.98%, goat hides are 31.74%, buffalo hides are 2.23%, and sheep hides are 1 .05%.
The policy states that the industry is facing some problems at every stage from raw material collection to processing, which needs to be overcome in a coordinated manner.
According to the Department of Livestock, 1.1 crore animals are slaughtered during Eid-ul-Azha in the country on average, of which, 40-45 lakh cows and buffaloes. Almost 50% of the total leather collection is done on Eid-ul-Azha.