Overview of the Bangladesh Leather Industry in 2020
Bangladesh's leather industry is the second largest export sector after RMG, with 2020 exports reaching about USD 850 million. It is mainly divided into crust/finished leather and leather goods such as shoes, bags, and belts, and accounts for roughly 2% of global leather markets. The relocation of the Hazaribagh tanneries to the Savar common effluent treatment plant (CETP) in 2017 was the core turning point for this sector.
USD 850M
Export Value
FY 2020
-12%
Growth Rate
YoY
220
Tanneries
After Savar move
3,500
Leather Products
Factories
800K
Employment
Direct and indirect
USD 60M
Korean Imports
Leather goods
Export Breakdown by Product
Bangladesh Leather Export Categories (2020)
| Item | Export Value | Share | Growth | Main Markets |
|---|---|---|---|---|
| Leather Shoes | USD 420M | 49% | -10% | Europe, Japan |
| Crust Leather | USD 180M | 21% | -15% | Italy, China |
| Leather Bags | USD 120M | 14% | -8% | Europe, US |
| Finished Leather | USD 60M | 7% | -18% | South Korea, Hong Kong |
| Leather Apparel | USD 40M | 5% | -20% | Europe |
| Others (Belts, Gloves) | USD 30M | 4% | -5% | Japan, US |
Hazaribagh vs. Savar Tanneries
Hazaribagh (Before Relocation)
LocationCentral Dhaka
Tanneries155 concentrated
EnvironmentUntreated discharge (severe)
Technology1970s equipment
Savar CETP (After Relocation)
LocationSavar, outskirts of Dhaka
Tanneries155→220 (including newcomers)
EnvironmentShared CETP treatment
TechnologyChromium recovery and automation
01
Impact and Challenges of the Relocation
The 2017 migration from Hazaribagh to Savar CETP was a turning point for environmental improvement, but production disruptions and higher costs occurred during the transition. CETP utilization remains around 60%, and some tanneries are still not fully operating. Over time, the move should improve export competitiveness through stronger environmental compliance required by EU and US buyers.
02
COVID-19 Shock and Market Condition
Leather exports in 2020 fell 12% year-on-year. Order cancellations and delivery delays by European buyers were the primary cause, with leather apparel (-20%) and finished leather (-18%) hit hardest. In contrast, leather handbags (-8%) were relatively resilient thanks to stronger online shopping demand. Raw hide supply for Eid-ul-Adha procurement remained stable.
03
Export Opportunities for Korean Firms
(1) Leather processing chemicals: chromium tanning agents, retanning agents, and dye exports (about USD 20M potential demand). (2) Tannery machinery: sammying machines, dryers, and coating lines. (3) Footwear machinery: injection molding units, stitching machines, lasts, and related finishing equipment. (4) Leather goods imports: expanding Korean demand for Bangladeshi leather bags and shoes. (5) Technical consulting: support for CETP operation, chromium recovery, and environmental management systems.
04
Market Outlook
The Bangladesh government plans to elevate leather to a USD 5 billion export sector after RMG. Priority areas are: (1) upscaling into higher value chains from raw hides and crust leather to finished leather and final goods, (2) environmental certification and wider LWG-certified tannery coverage, (3) creation of a dedicated footwear cluster near Savar, and (4) tighter OEM linkages with Italian brands.
Leather Export Trend
2016
USD 1.2B (Hazaribagh)
→↓
2017
Savar relocation starts
→↓
2018
USD 1.0B (relocation disruption)
→↓
2019
USD 950M (recovery)
→↓
2020
USD 850M (COVID impact)
→↓
2025 target
USD 1.5B
Bangladesh Frozen Food Exports in 2020Agrifood export industry
Bangladesh Jute Market in 2020Traditional export industry
Bangladesh is advancing both environmental remediation through the Savar relocation and value-chain upgrading. Although 2020 export performance dropped due to COVID-19, the share of finished products such as shoes and bags has been increasing. Korean firms have meaningful opportunities in processing chemicals, machinery, and technical service categories.
leathertannerySavar2020exports
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