Dhaka, Sunday, 16 June 2019
Bangla Insider

Main cause behind leather industry collapse

News Desk
Published on : 26 August 2018, 10:00 PM
Main cause behind leather industry collapse

`One of the main reasons behind the collapse of the leather industry is that the tannery owners have not been paying their dues over the last three to four years. The rule says the tannery owners will have to pay all their dues by the end of Eid-ul-Adha, and after the Eid, they will start business afresh. However, so far, only two tanneries have paid off their same percent of the dues this year. Some ten percent of the tanneries paid fifty percent of their dues, whereas the rest of the tanneries have not paid any money.

When asked about the reason behind the collapse, President of the Hide and Skin Merchants Association Delwar Hossain told the above words to Bangla Insider.

The leather industry of the sacrificial animals has collapsed this year. The price of the animal skins has been sold at the lowest price of the last 30 years. This picture was the same across the country. Cows worth millions of taka have not been sold this year.

In an exclusive interview with Bangla Insider, Delwar Hossain shared his association`s opinion about the collapse.

According to you, what is the reason behind the collapse of the current leather industry?

One of the main reasons behind the collapse is that the tannery owners have not been paying our dues for the past three to four years. According to the rules, they must pay our dues by the end of Eid-ul-Adha. Once the Eid is over, we begin our business afresh. This year, only two tanneries have paid their dues, 10 tanneries have paid between 20-50% of their dues and others have not paid a single penny. Many of our wholesale buyers could not buy the skins due to insufficient capital. Since we had insufficient capital, there was no rivalry among us in buying skins. Those who had capital invested in purchasing skins. However, when the capital was over, the price of skins fell drastically. Seeing the opportunity, many tannery owners invested their own money to purchase skins.

What do the tannery owners tell you when you ask for your dues?

They say that their money, including the bank money, capital and the money of the wholesalers, was spent to install new tannery in Savar and purchase new equipments. Therefore, they are unable to pay their dues. Whatever is the circumstance, the main cause behind the collapse is the lack of capital.

Is there any impact on the raw skin business due to the prices set by authorities?

The authorities did not set the prices five to six years before. Everything ran in an open market system. We used to purchase skins according to their quality. You should consider it that not only the tannery owners, the foreign buyers also purchase our products at a fixed price. And the price of the animal skins is not the same. The seasonal buyers purchase the skins directly. They are unable to estimate the size and quality of a skin at one glance like we do. And we fix the price according to the quality, unlike the unskilled seasonal buyers. Because of the fixed price, it has created problems for the seasonal buyers.

In order to prevent the downfall of the leather industry, what do you think the authorities concerned have to do?

The leather industry is a big sector in this country. The position of the leather industry is only after the garments industry in terms of earning foreign currency. The Commerce, Industry, and Finance ministries are related to this sector. If the concerned ministries identify the problems of the leather industry and try to resolve these, it would be effective. It is also necessary to monitor whether the tannery owners are investing their government and bank’s money properly. Also, the authorities should listen to what the tannery owners need and then take the necessary steps to develop this industry.

On Saturday, when Bangla Insider contacted Bangladesh Tanneries Association (BTA) President Shaheen Ahmed to discuss the reason behind the collapse of skin prices, he scheduled Sunday morning for the interview. But, when we tried reaching him over phone, he did not respond to our calls and messages as well.  

Bangla Insider