There has been a tremendous growth in the export of leather footwear due to increasing foreign and local investment in this sector. The number of compliant factories that produce high-quality footwear is increasing.

The leather footwear sector registered a steady growth of 6.90 per cent by earning USD 216.16 million in the first four months (July–October) of the current financial year (FY2018–19). It had earned USD 202.20 million during the same period in FY2017–18, according to Export Promotion Bureau (EPB) data.

Abdul Momen Bhuiyan, senior vice-president of the Leather Goods and Footwear Manufacturers’ and Exporters’ Association of Bangladesh (LFMEAB), explained the reasons behind the steady growth. “Labour costs are increasing in China, prompting a shift to high-tech industries in that country. So, if investors decide to move to a cost-competitive manufacturing base, Bangladesh is the most lucrative option at this moment,” he said.

Bhiyan also said that Chinese investors already invested in around 15 new export-oriented footwear factories in the Chattogram Export Processing Zone (CEPZ), where they manufactured footwear and exported the products. This is going to influence the growth prospects in the long-term, he added

Bangladesh manufactures footwear for renowned brands such as Timberland shoes, Wolverine, Sterling shoes and other brands, he told The Independent.

“Factories producing footwear in Bangladesh are environmentally compliant—they conform to environmental laws, regulations and standards,” said Bhuiyan, who is also the deputy managing director (DMD) of Apex Footwear Ltd.

“Apex is a 100 per cent compliant factory. Apex manufactures top-quality products for renowned brands. The number of our buyers is 106 around the world,” he noted.

“Our factory is located at Kaliakoir in Gazipur. We produce more than five million pairs of footwear. They are sold through around 220 outlets across the country,” he said.

“Last year, we earned around Tk. 750 crore by exporting footwear,” he added.

Bhuiyan said Bangladesh exported footwear to European Union (EU) member countries, Japan and North America.

When asked about the challenges, Bhuiyan said: “We import raw materials from Australia and several other countries. So, they influence the cost of the product. If this continues to happen, we may lose the opportunity of competitive pricing on a global scale.”

“Reduction of the lead time to 45 days, establishment of more compliant footwear factories and long-term policy support are the key issues that we need to address right now,” he added.

Bhuiyan said that competitive pricing, low labour cost and available raw materials could help Bangladesh grab a bigger share of the global market of leather products. “If any long-term sustainable policy support is implemented, it's possible to achieve a growth level of 12–15 per cent instead of 6.90 per cent,” he added.

The export growth shows that Bangladeshi entrepreneurs are putting in money in compliant factories to produce high-quality footwear, he added.

Dr Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD), said: “The growth in the export of leather footwear in the first four months of this financial year shows that we're performing successfully in the global arena after meeting the domestic demand.”

“We use 50 per cent of our raw materials (processed leather) in the domestic market and export the rest. This shows the demand for footwear in the local market is increasing as well,” he added.

According to the LFMEAB, approximately 220 tanneries, 2,500 footwear-manufacturing units and 90 large firms are involved in making leather goods and footwear mainly for exports.

Bangladesh exports leather goods and footwear mainly to the UAE, Argentina, Austria, Australia, Belgium, Canada, Switzerland, Chile, China, Germany, Denmark, Italy, Spain and Finland.