Leather Industry Leaders Seek Cash Incentive

Leather industry leaders yesterday sought a 25 percent cash incentive from the government to boost leather production.

They also demanded that the government take safeguard measures for the industry as per a deal signed in 2003 between Bangladesh Finished Leather and Leather Goods and Footwear Exporters Association (BFLLFEA) and Bangladesh Tanners Association (BTA).

The leaders urged the government to reduce the bank interest rate on loans intended for leather production.

The demands were raised as a delegation of BFLLFEA and BTA met Industries Minister Dilip Barua at his office.

The delegation also demanded that the government immediately set up the central effluent treatment plant (CETP) in Savar.

“Unless we can ensure an environment-friendly leather industry by 2010, this export-based sector will face serious threat, as European buyers will not accept Bangladeshi finished leather and leather products any more,” said Rezaul Karim Ansari, chairman of BFLLFEA.

He referred to the memorandum of understanding (MoU) signed with the government that agreed to relocate the Hazaribag tanneries and build the Dhaka Leather Industry City in Savar. He said as per the MoU, the government should bear the cost of setting up the CETP and compensate the industry people.

Ansari said the government should reduce the interest rates of both the national and private banks that fund the purchase of rawhide and leather production.

“In our country the rate charged by nationalised banks is 9 percent and 16-18 percent by private banks, whereas it is only 6 percent in India and Pakistan,” he said.

He urged the government to reduce the rate from 9 percent to 6 percent.

Industry leaders demanded withdrawal of duties on import of chemicals that are essential to process rawhide to leather.

They also urged the government to ensure duty-free entry of local products to developed countries, including China.

Dilip Barua assured the leaders of all-out government supports to develop the industry.

The minister said the government would take necessary steps to build the CETP by 2010.

The Leather Industry City will be built on a 200-acre land at Tetuljhara in Savar with 195 industrial units, which will directly and indirectly create jobs for nearly five lakh people, said the leaders.

Barua advised the leather industry leaders to produce diversified products to overcome the export drop in international markets in the recent months.