Dhaka, Monday, 25 October 2021

Tanners apprehend cancellation of Tk 1,100cr export orders

Tanners apprehend cancellation of Tk 1,100cr export orders

Apparel Report: Under pressure following the shutdown of their factories in the city’s Hazaribagh area, tannery owners apprehend that their export orders of some Tk 1,100 crore will be cancelled. General Secretary of Bangladesh Tanners’ Association (BTA) Shakawat Ullah said, According to our initial estimate, the export orders of some Tk 1,100 crore may be cancelled. He, however, said they started conducting a survey to get the final estimate over the possible cancellation of export orders.

Hopefully, we’ll get it [final estimate] within the next three-four days. In compliance with a High Court order, the Department of Environment (DoE) on 8 April disconnected utility services — electricity, gas and water — to some 224 tanneries at Hazaribagh as they missed several deadlines to relocate their factories to the 200-acre Savar Tannery Estate.

The closure of the factories will cast a dire impact on nearly US$ 1.5 billion-leader sector as the owners of many tanneries, particularly the small ones, are still uncertain when their tanneries will be shifted to Savar, according to the industry insiders. BTA statistics show that the future of 27 tanneries looks bleak as they have not got any plot at Savar.

Arab Tannery, Noakhali Tannery, Manik & Sohag Brothers Tannery Ltd, Luna Tannery, Exim Leather, Cromvage Tannery, Ideal Leather Complex, Hamco Leather Ltd, Dia Leather Complex, Kaiser Leather Complex, Lamesa Leather, Kashem Tannery and Mohammadia Leather Complex are among the 27 tanneries. About the relocation process, the BTA general secretary said it will be possible for some 80-90 tanneries to shift their factories to Savar within the next one month, but the fate of others is uncertain as many of them are dependent on export earnings to shift their factories.

But, the operation of their factories now remains suspended, which will hamper their relocation process further. So far, nearly 40 tanneries have been shifted their wet-blue leather sections to Savar as per the BTA statistics. The tanneries could not yet install their crust and finished leather sections at Savar estate as the gas connection is still not available there, the owners said.

Owner of Noakhali Tannery and Manik & Sohag Brothers Tannery Ltd Md Mukbul Ahammad said the operation of his two tanneries is still unclear as he got no plot at Savar against the two factories. He claimed that Bangladesh Small and Cottage Industries Corporation (BSCIC) in July 2006 approved two plots against his two units, but did not allocate finally, though some outsiders having no tannery factory got plots at the Savar estate due to underhand dealings.

With the shutdown, Mukbul said, his tannery machinery, worth Tk 5-7 crore, will get destroyed, while his at least 20 workers have already lost their jobs. Shamsuddin and Zahir Uddin, workers of Noakhali Tannery, said they may lose jobs as the tannery was shutdown and there is no possibility to shift the factory to another place.

While visiting Luna Tannery that did not get plot at Savar, this correspondent found huge piles of wet-blue leather on Tuesday, 11 April. Some commercial exporters (who are not owners of any tannery but process leather renting factories) were worried with the piles of wet-blue.

Mosharraf Hossain, a commercial exporter, said he has 30,000sq feet wet-blue leather worth about Tk 30 lakh at Luna Tannery, but he does not know the fate of the leather. Jahangir Rahman Milon, owner of International Tannery, and Jamal Ahmed, owner of Metro Tannery, said the country’s leather sector will lose its international market due to the suspension of operation of the factories.

Once the foreign buyers move to other countries, it’ll be tough to bring back to Bangladesh, Jamal said. Milon said dumping yard at the Savar estate has not been constructed yet. “Neither a single factory has got gas connection,” said a worrying Milon.

The BTA general secretary said there are 205 tannery owners, 450 commercial exporters of leather and 35,000 workers engaged in Hazaribagh tannery sector. Earlier on Monday, the owners and workers of Hazaribagh tanneries staged demonstration in the city demanding utility connections to their industrial units at the Savar Tannery Estate within 15 days in compliance with the apex court order.

The government set up the Savar Tannery Estate to relocate the tanneries from Hazaribagh considering health and environmental hazards. It has allotted 155 plots at Savar among tanners and provided them Tk 250 crore as compensation for shifting their industrial units.Some 21,000 cubic metres of untreated toxic waste are released every day from the Hazaribagh tanneries into the Buriganga River, posing a serious risk to human and animal health.