Interviews

Md. Saiful Islam, President Leathergoods & Footwear Manufacturer and Exporters Association Bangladesh (LFMEAB)

LFMEAB is going to organize Bangladesh Leather Footwear & Leathergoods International Sourcing Show (BLLISS) 2017. This is the first of its kind show in Bangladesh. What intrigued you to organize BLLISS?
2016 came with much good news. This is the year when the leather goods and footwear industry made over $1 billion which made us contemplate on the idea of organizing an international sourcing show to attract new league buyers. Many of these buyers are currently sourcing from Vietnam, China, and our neighboring countries. This is why we thought of projecting our Industry in a way that buyers know about our capability and offerings.
When it comes to value addition, the abundance of good raw material and expert production capacity have enabled us to gradually improving from lower end to middle end and eventually to the higher end.
In this exhibition, we will have buyers from 34 different countries, and there will be chief purchasing officers from various retail and wholesale brands. So, we aim to send the message to them that Bangladesh is now gradually shifting from lower end to middle-end products and ultimately will move to higher-end products. We want to showcase these products to them. So, these factors overall intrigued or motivated us to organize BLLISS 2017.

Till date, we didn’t have any labor unrest in our sector. Due to social concerns we have researched to find the appropriate living wage to ensure that our workers are paid adequately.

Is there any country that has faced a similar situation and can be a role model for us?
India, to be more specific, West Bengal had a similar situation. If you look back, 20 years ago Chennai faced the same problem, i.e., their tanneries were very carefully placed and overcrowded which were not environment-friendly. We have already started to shift the tanneries from Hajaribaag to Savar. We have successfully managed to close down every single tannery in Hajaribaag. However, Bangladesh is not a country of high technology, so we have had to purchase the CATP from China. Now the problems that CATP is facing will be resolved within a few months, and then we can tackle the environmental problems properly. We have, however, started working on the physical aspect of the shift from Hajaribaag to Savar. 155 new tanneries are under construction and 40 are already in operation. So, in this way we have emulated our neighboring country as they had faced a similar situation.

What is the ultimate goal of BLLISS 2017 besides attracting new buyers?
The government is very business friendly, but it is the private sector that ultimately takes the industry forward. Whether it is B2B or B2C, the problem is we are not good salesman: we cannot sell products that we have. Whereas other countries are even selling products that they don’t have. The world is moving slowly from developed economies to emerging economies. Five years back there was euphoria about BRICS, and even after the fall of Brazil and South Africa, there were still two big players in the BRICS league, i.e., India and China. In comparison to them, our economy is much smaller, but again I would say that Bangladesh is the sleeping Asian Tiger, which will soon merge with the Emerging Economy of the World. If you see our growth over the last decade, it is 6.5%, and our GDP is $225 billion. So, if you add 6.5% of that $225 billion you are contributing roughly $14 billion years on year growth. This is the message that we want to convey through BLLISS 2017 to the business community and the leather goods and footwear brands. People from the apparel industry will also be present in the exhibition, so they will know how Bangladesh is gradually diversifying its export basket, especially to the Fashion World.
In this connection, I would like to mention what our government has envisioned in the 6th 5-year plan. 82% of the export earning now comes from the RMG sector, so the government wanted at least 20% of the same to come from the other diversified industries, but that did not happen.
Now we are in the 7th 5-year plan, and the government has projected the RMG sector to contribute 75% of the total export and expects the diversified industry to provide the rest 25%. So, we have given the government a goal from the private sector that in the next 4 years, i.e., by 2021-when we move from an LDC to a middle-income country -and export $60 billion, (among which 50 billion will come from the RMG sector) 10 billion USD will come from the diversified sector and among that 50% will come from the leather industry. So, we have a responsibility and a commitment to the economy, and we believe that BLLISS 2017 will be the first step to embark Bangladesh on a new journey.

Can you share some insights about the size of the domestic market?
Well, I cannot quantify the size in particular, but if you ask me as a whole, I can say that over the past few years our average per capita income has increased, meaning that the purchasing power has also increased. If you can quantify the middle and the upper-class people, then we can get a more accurate size of the market. But as a whole, there is no doubt that capacity and the demand for leather goods and footwear has increased significantly in the domestic market.

Do you have plans to venture out into new territories regarding attracting buyers?
Yes definitely. Currently, more than 60% of our export goes to the EU countries. Our shipping to North America is not significant at all. So yes, we will be focusing on how to attract the North American market, such as the USA and Canada, and not just these but also the Latin America. Also, recently we have surveyed the southern hemisphere, i.e., in the Australian and New Zealand market. It may not be a significantly sized market but it is a good market, and we are in business with Australia and New Zealand.

Have you faced any challenges regarding labor compliance?
Till date, we didn’t have any labor unrest in our sector. Due to social concerns we have researched to find the appropriate living wage to ensure that our workers are paid adequately. Based on that research many companies are now offering living wages, as opposed to minimum wages. We have also secured health insurance, life insurance for our workers, and slowly we will move onto providing provident funds, gratuity, and other fringe benefits.
Also, as you know for the last ten years, we have been honing skills of our workers. Already 15,000 people have graduated from Center of Excellence for Leather Skill Bangladesh Limited (COEL). As a part of our human resource development programs, we are training mid-level managers to be more efficient. All these efforts will eventually result in higher productivity we believe.

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