Leather goods sector of Bangladesh

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  1. 1. INDUSTRY PAPER: THE LEATHER GOODS SECTOR (NON FOOTWEAR) OF BANGLADESH
  2. 2. INDUSTRY PAPER: THE LEATHER GOODS SECTOR (NON FOOTWEAR) OF BANGLADESH Prepared for: Mohammad Saif Noman Khan Assistant Professor Prepared by: Amreen Akhtar ID: 24 Md. Mushfiq Alam Arko ID: 34 (Group Leader) 01703803619 Nisa Nur Majumder ID: 36 Tapas Debnath ID: 40 Syeda Nawrin Huq ID: 41 Batch: MBA 52-D Institute of Business Administration University of Dhaka January 2, 2015
  3. 3. iii Contents Executive Summary.............................................................................................................................. viii 1.0 INTRODUCTION............................................................................................................................1 1.1 Origin of the Report ......................................................................................................................1 1.2 Objective of the Study..................................................................................................................1 1.3 Scope................................................................................................................................................1 1.4 Methodology...................................................................................................................................2 1.5 Location of the Industry ..............................................................................................................2 2.0 LEATHER INDUSTRY ..................................................................................................................3 2.1 Global Market in Brief...................................................................................................................3 2.2 Global Leather Goods Market ....................................................................................................3 2.2.1 Worldwide Leather Export and Import .............................................................................4 2.2.2 Recent Development.............................................................................................................6 2.2.3 Product Groups ......................................................................................................................8 3.0 BANGLADESH LEATHER INDUSTRY ........................................................................................11 3.1. History of Leather Industry in Bangladesh .........................................................................11 3.2. Leather Industry in Brief...........................................................................................................12 3.3 Market Structure..........................................................................................................................16 3.3.1 Demographic Concentration.............................................................................................16 3.3.2 Leather Goods Market Size in Bangladesh 2013.........................................................16 3.4 Major Institutions involved in leather sector .......................................................................20 3.4.1 Leather Associations of Bangladesh..............................................................................20 3.4.2 Leather Institutions..............................................................................................................25 3.4.3 Leather Research Institutes ..............................................................................................26 3.4.4 Government Bodies.............................................................................................................27 3.4.5 Private Organizations..........................................................................................................30 3.5 Leather Products in Bangladesh .......................................................................................30 3.5.1. Small Leather products .....................................................................................................31 3.5.2. Medium Leather Goods.....................................................................................................31 3.5.3 Heavy Leather Goods..........................................................................................................31 3.6 Marketing Leather goods ..........................................................................................................32 3.6.1 Research.................................................................................................................................32 3.6.2 Strategies for Selling Products .................................................................................33
  4. 4. iv 3.6.3 Parameters.............................................................................................................................34 3.6.4 Marketing Tools....................................................................................................................34 3.7 Distribution Channel...................................................................................................................35 3.7.1 Raw Hide and Skin Collectors and Suppliers...............................................................35 3.7.2 Importers of Chemicals ......................................................................................................35 3.7.3 Leather Processing Units or Tanneries .........................................................................36 3.7.4 Wholesaler of Leather and Accessories ........................................................................37 3.7.5 Handmade Footwear Manufacturers...............................................................................37 3.7.6 Industrial Footwear Manufacturers .................................................................................38 3.7.7 Semi-industrial Footwear Manufacturers ......................................................................38 3.7.8 Handmade Leather Goods/Crafts Manufacturers........................................................38 3.7.9 Industrial Leather Goods Manufacturers.......................................................................39 3.7.10 Semi-industrial Leather Goods Manufacturers..........................................................39 3.7.11 Wholesaler of Footwear ...................................................................................................40 3.7.12 Retailers of Footwear, Leather Goods, and Leather Garments.............................40 3.7.13 Export Agent .......................................................................................................................40 3.8 Value Chain...................................................................................................................................41 3.8.1 Financial Analysis of Value Addition ..................................................................................44 3.9 Brief of Top Industry Players ...................................................................................................48 3.9.1 APEX Leather ........................................................................................................................48 3.9.2 Bata Shoe Company (Bangladesh) Ltd..........................................................................49 3.9.3 Leatherex Footwear Industry............................................................................................50 3.9.4 Picard Bangladesh Limited ...............................................................................................51 3.9.5 Ramim Leather & Finished Goods Corporation...........................................................51 3.9.6 Fortuna Bangladesh............................................................................................................52 3.10 Legal Environment....................................................................................................................52 3.10.1 Bangladesh Environment Conservation Act, 1995...................................................52 3.10.2 Relocation of Tanneries ...............................................................................................53 3.10.3 Related Tax and other issues .....................................................................................54 3.10.4 Price Control ...................................................................................................................54 4.0 INDUSTRY RISKS ............................................................................................................................55 4.1 Political Situation ........................................................................................................................55 4.2 Diseases and accidents.............................................................................................................55
  5. 5. v 4.3 Cheap Chinese Products (Dumping)......................................................................................56 4.4 Smuggling of Leather.................................................................................................................56 4.5 Lack of Technical Knowhow in Designing ...........................................................................56 4.6 Low investment in R&D .............................................................................................................56 4.7 Foreign Currency Fluctuation..................................................................................................56 4.8 Small Market .................................................................................................................................57 5.0 CRITICAL SUCCESS FACTORS ........................................................................