Covid-19 pandemic is greatly affecting the leather industry also

Even the newly established CETP (common effluent treatment plant) may face difficulties for want of effluents for operation

The whole world is now pestilence stricken because of a newly-born micro organism called the novel coronavirus. It is a new strain that has not been previously identified in humans. This coronavirus pandemic has caused close to two hundred thousand deaths throughout the world. People are now not allowed to move or work freely as the virus can cause serious respiratory illness. Social distancing, lockdowns and quarantine have now become common to the world.

So, all the productive activities, trade and commerce around the world have become stagnant and the world is rushing towards a serious famine and chaotic situation in coming days. It is a bleak picture indeed.

Like other sectors in Bangladesh, the indigenous raw based industrial sector like tannery and leather product industries will also be greatly affected. We know leather industry in our country is 100% indigenous raw materials based sector. Bangladesh produces 1.13% leather in world context, most of which are exportable item in the world leather trade. It supplies around US$ 1.2 billion to the national exchequer per year. And it is the second largest export earning industries sector in Bangladesh.

In leather industry sector, the coronavirus pandemic has upset its production, production process, productivity and its supply chains in all respect. Starting with China, the virus has spread all over the world to make a long term deadlock to the world trade. Bangladesh tanneries and leather sector as a whole is losing more than US$ 300 million in her third quarter foreign earning exchequer. According to stakeholder’s sources, there are around 300 containers of leather and leather goods that are packed up on the factory premises for shipment. Most of the previous export orders are being cancelled by the foreign buyers as the countries from where the order came has also been hit hard.

It is anticipated that continuity of the pandemic will surely wreak havoc on the tannery and leather product sector as well. As the entire supply chain has been disrupted, the local economy is bound to face a huge deficit for raw materials as soon as the pandemic ends. Employment cut can create a huge social outcry. Not only in the export of the product, in the local market also, it will incur loss in the coming Eid festival. This will cause an estimated loss of Tk.10000 millions.

The basic raw materials for tannery and leather industries are hides and skins which are converted into leather through tannery operations. And all these are from indigenous sources. Hides and skins are putrescent organic materials and their collection and curing system is more or less conventional. According to Bangladesh Hides and Skins Merchants Association, about 14600 hides and 48000 skins become available every day countrywide. And its collection and curing system is very much traditional throughout the country site.

In the present lockdown situation, the valuable raw stock that will pile up is now greatly threatened. Hides and skins need 25-30% salt (on weight) for its curing stage. To preserve this huge amount of raw hides and skins, the raw stock traders need almost 30,000 tons of common salt at their end. And for this interim pandemic situation the raw hide and skin traders need around 8,000 metric tons of salt for curing of these putrescent hides and skins. As the time barrier is uncertain, so the need of salt may rise for reuse of salt for the preserved stock. Some other situation may also occur in the tannery site. More than 100 tanneries are now in operation at newly established tannery estate in Savar. Most of the tanneries are newly designed and installed modern machineries and equipments, may cause rusted and unusable for continuous non working situation. Even the newly established CETP (common effluent treatment plant) may face difficulties for want of effluents for operation.

In this pandemic situation, the interim cash package for lead industries have been declared by the government to survive. Followed by the recovery from the crisis caused by the pandemic, Bangladesh government could support other logistics to enhance for LWG (leather working group) certification for both the tannery and all other activities within this periphery so that they can stand like a homogenous and unique unit to the international leather trade.

This will make a one unit situation to the leather industries sector to boost up. Policy support from government such as deferred lease payment, tax exemptions and some stimulus package like incentives and tariffs are needed. This will mitigate the trade loss and act like a lifeboat to these drowning entities.

The writer is a leather industry consultant. E-mail: <[email protected]>

SH

Covid-19 pandemic is greatly affecting the leather industry also

Even the newly established CETP (common effluent treatment plant) may face difficulties for want of effluents for operation

The whole world is now pestilence stricken because of a newly-born micro organism called the novel coronavirus. It is a new strain that has not been previously identified in humans. This coronavirus pandemic has caused close to two hundred thousand deaths throughout the world. People are now not allowed to move or work freely as the virus can cause serious respiratory illness. Social distancing, lockdowns and quarantine have now become common to the world. So, all the productive activities, trade and commerce around the world have become stagnant and the world is rushing towards a serious famine and chaotic situation in coming days. It is a bleak picture indeed. Like other sectors in Bangladesh, the indigenous raw based industrial sector like tannery and leather product industries will also be greatly affected. We know leather industry in our country is 100% indigenous raw materials based sector. Bangladesh produces 1.13% leather in world context, most of which are exportable item in the world leather trade. It supplies around US$ 1.2 billion to the national exchequer per year. And it is the second largest export earning industries sector in Bangladesh. In leather industry sector, the coronavirus pandemic has upset its production, production process, productivity and its supply chains in all respect. Starting with China, the virus has spread all over the world to make a long term deadlock to the world trade. Bangladesh tanneries and leather sector as a whole is losing more than US$ 300 million in her third quarter foreign earning exchequer. According to stakeholders sources, there are around 300 containers of leather and leather goods that are packed up on the factory premises for shipment. Most of the previous export orders are being cancelled by the foreign buyers as the countries from where the order came has also been hit hard. It is anticipated that continuity of the pandemic will surely wreak havoc on the tannery and leather product sector as well. As the entire supply chain has been disrupted, the local economy is bound to face a huge deficit for raw materials as soon as the pandemic ends. Employment cut can create a huge social outcry. Not only in the export of the product, in the local market also, it will incur loss in the coming Eid festival. This will cause an estimated loss of Tk.10000 millions. The basic raw materials for tannery and leather industries are hides and skins which are converted into leather through tannery operations. And all these are from indigenous sources. Hides and skins are putrescent organic materials and their collection and curing system is more or less conventional. According to Bangladesh Hides and Skins Merchants Association, about 14600 hides and 48000 skins become available every day countrywide. And its collection and curing system is very much traditional throughout the country site. In the present lockdown situation, the valuable raw stock that will pile up is now greatly threatened. Hides and skins need 25-30% salt (on weight) for its curing stage. To preserve this huge amount of raw hides and skins, the raw stock traders need almost 30,000 tons of common salt at their end. And for this interim pandemic situation the raw hide and skin traders need around 8,000 metric tons of salt for curing of these putrescent hides and skins. As the time barrier is uncertain, so the need of salt may rise for reuse of salt for the preserved stock. Some other situation may also occur in the tannery site. More than 100 tanneries are now in operation at newly established tannery estate in Savar. Most of the tanneries are newly designed and installed modern machineries and equipments, may cause rusted and unusable for continuous non working situation. Even the newly established CETP (common effluent treatment plant) may face difficulties for want of effluents for operation. In this pandemic situation, the interim cash package for lead industries have been declared by the government to survive. Followed by the recovery from the crisis caused by the pandemic, Bangladesh government could support other logistics to enhance for LWG (leather working group) certification for both the tannery and all other activities within this periphery so that they can stand like a homogenous and unique unit to the international leather trade. This will make a one unit situation to the leather industries sector to boost up. Policy support from government such as deferred lease payment, tax exemptions and some stimulus package like incentives and tariffs are needed. This will mitigate the trade loss and act like a lifeboat to these drowning entities. The writer is a leather industry consultant. E-mail:[email protected] SH