Term Paper - Prospect of Export Oriented Leather Industry in Bangladesh

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Our honorable teacher, Professor (Dr) Khondoker Bazlul Hoque, Department of Management Studies, has assigned me to prepare term paper on "Prospect of Export Oriented Leather Industry in Bangladesh". This is a term paper for our Course: International Business and Management (EM-527).

1.2Why chosen
As a country, we must emphasize more & more on our exports. Our export has been from garments, which now is now under threat in post GATT era. So, we must concentrate on other export industries like leather, pharmaceuticals, information technology, etc.

1.3 Objectives
The objectives of this term paper are:
1.To assess Leather industry of Bangladesh.
2.To findout worldwide leather export scenario.
3.To evaluate export prospect of our leather industry.

1.4 Methodology followed
Due to time constraints, mostly I had to depend on secondary data. Information sources that I've used, are: For Information, articles & statistics:
•Current Export Policy, Bangladesh Export Data: Export Promotion Bureau Web Site - www.epbbd.com

•Various World Statistics: International Trade Center (ITC), Geneva Web Site - www.intracen.org

•Indian Leather Export Data: Council For Leather Exports Web Site - www.leatherindia.org

•Relevant Articles in Newspapers & Internet

Besides, for industry information I've talked to personnel of some local leather goods companies.



2.1 Background
From time immemorial, the arts and crafts of Bangladesh are closely linked to our culture and heritage. Leather and leather products have always been a part of that heritage and after the emergence of an independent Bangladesh in 1971, the industry received a fresh momentum. Bangladesh started exporting crust and finished leather in early 80's and footwear and other manufactured leather goods during 90's. Export growth in this sector is highly encouraging. Export of leather and Leather goods (including Footwear) earned US$217.03 Million for Bangladesh in the fiscal year 2003 (*Note: II). However, there are still huge development and growth potential for export of leather goods. As it is a labour intensive industry, there are lots of scopes to increase export in this area.

Export By Major Products (2002-2003) Source: *Note: I

2.2 Sector Highlights
a. The labor-intensive leather industry is well suited to Bangladesh having cheap and abundant labor. b. Bangladesh has a domestic supply of good quality raw material, as hides and skins are a by-product of large livestock industry. c. Adequate government support in the form of tax holidays, duty free imports of raw materials and machinery for export-oriented leather market. d. The industry lacks domestic technology and expertise and local support industries such as chemicals are still under-developed.

2.3 Industry Outlook
There is already a substantial domestic leather industry, mostly export-oriented. The leather includes some ready-made garments, although that aspect is continued mainly to a small export-trade in "Italian-make" garments for the US market. Footwear is more important in terms of value addition. This is the fast growing sector for leather products. Most of the livestock base for this production is domestic which is estimated as comprising 1.8 percent of the world's cattle stock and 3.7 percent of the goat stock. The hides and skins (average annual output is 150 million sq.ft.) have a good international reputation. Foreign direct investment in this sector along with the production of tanning chemicals appears to be highly rewarding. Having the basic raw materials for leather goods as well as for the production of leather shoe, a large pool of low cost but trainable labour force together with tariff concession facility to major importing countries under GSP coverage, Bangladesh can be a potential off shore...
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