Bangladesh has always been a small player in the Chinese leather market and has only managed to export leather worth US $ 50 million and footwear worth US $ 16 million to China each year in the last decade, according to The Financial Express.
One of the problems for this stagnant performance is due to the size of skins and hides offered as well as the quality of tanning and the resultant finished leather, compared to what China purchases from other countries such as the US, Italy, and Brazil. Now, however, it seems that the Bangladeshi government wants to invest in the leather supply chain and help to boost exports.
The strategy being worked on to attack the Chinese market is to establish joint ventures with local companies specialised in slaughtering and tanning. In addition, they would like to set up Bangladeshi leathergoods outlets in China, hire marketing agents, promote and launch vigorous advertising campaigns.
Such a marketing and sales strategy requires financing, and the Ministry of Commerce expects to improve tax incentives for exports of leather and leather products. Currently, leathergoods exports benefit from a 15% tax subsidy that could reach 20%. In the case of tanneries in the Savar Tannery Industrial Estate, a 10% subsidy is on offer as well as for tanners outside Savar that have an effluent treatment plant.