The leather industry is grappling with another sharp downturn this Eid al-Adha, as traders watch helplessly while prices collapse and large quantities of hides remain unsold or go to waste.
Industry insiders say European buyers are turning away from Bangladeshi leather due to pollution caused by the central effluent treatment plant (CETP) in the country’s industrial leather hub, which continues to operate below capacity.
At the same time, global demand for raw hides has contracted. Despite awareness of these issues, plans to expand the CETP or build a new facility remain stalled.
Traders say the lack of effective government oversight and problem-solving initiatives exacerbates the situation, despite the sector’s significant export potential.
At the heart of the issue is the failure of the Savar tannery industrial area. In 2003, the government launched a project to relocate tanneries from Hazaribagh in Dhaka to reduce pollution in the Buriganga River.
Initially scheduled for completion within two years, the project took nearly 15 years, with costs ballooning from Tk175 crore to Tk1,015 crore.
In 2017, around 160 tanneries were moved to Savar. The plan envisaged centralised treatment of liquid and solid waste and international recognition for the industrial zone.
However, only one tannery has so far obtained the globally recognised Leather Working Group certification, leaving the rest unable to access international markets.
The CETP in Savar began operations in 2012, with a five-year completion target, but it took nine years to be formally finished. Owners and industry representatives say that even after its official completion in 2021, key components – including the Central Chrome Recovery Unit, Central Sedimentation system, and tertiary treatment facilities – remained non-functional for years.
As a result, the CETP has never met the required standards, undermining the competitiveness of Bangladesh’s leather exports.
Officials say the CETP continues to fall short of expectations due to design flaws.
Mohammad Sakawat Ullah, general secretary of the Bangladesh Tanners Association, told TIMES of Bangladesh that the plant was built on inaccurate estimates of the liquid and solid waste generated by tanneries in Hazaribagh.
“The CETP was never capable of meeting the actual demand of the industrial zone,” he said, adding that the Chinese firm contracted to construct the facility handed it over to the Bangladesh Small and Cottage Industries Corporation without completing proper trial operations and then left the country.
Official documents claim the plant can treat 25,000 cubic metres of waste per day. In practice, however, its throughput has consistently ranged between 14,000 and 17,000 cubic metres, a shortfall acknowledged by CETP managing director Mohammad Golam Shahnewaz.
Tanneries normally produce around 28,000 cubic metres of waste daily, rising to 40,000–50,000 cubic metres during the Eid al-Adha sacrificial season. As a result, large quantities of untreated or partially treated waste continue to flow into rivers.
While Hazaribagh’s relocation initially aimed to protect the Buriganga River, industrial effluents are now polluting Savar’s Dhaleshwari River.
Aging equipment frequently breaks down, and limited funding has delayed replacements and modernisation.
The plant’s waste-carrying pipelines were also poorly designed, often failing to cope with excess flow. Multiple tannery owners report that the industrial zone’s drainage infrastructure is inadequate: while Hazaribagh had drains four to five feet deep, much of Savar has only half that depth. During peak flows, untreated or partially treated waste often bypasses the system and enters rivers directly.
Financial sustainability is another concern. BSCIC sources say that the real cost of treating a cubic metre of waste is around Tk53, yet tanneries are charged only Tk25. Industry insiders question whether the CETP can remain effective in the long term under this model.
Lack of international certification limits exports
The Leather Working Group (LWG) certification is widely recognised as a key standard in global leather trade, with major brands in Europe and the United States sourcing raw hides primarily from LWG-certified tanneries.
A 2023 report by the Bangladesh Investment Development Authority (BIDA) notes that the absence of LWG certification is preventing many Bangladeshi tanneries from accessing these lucrative Western markets.
Unable to export to Europe and the US, numerous firms are forced to sell their leather at lower prices in China, often 50 to 60 per cent below potential market value. This situation costs Bangladesh an estimated $50 million in lost export revenue annually. Some tanneries are even importing finished leather from abroad to meet domestic demand.
“Without ensuring a world-class CETP and international standards, it will not be possible to safeguard the leather industry,” said Mohammad Sakawat Ullah.
What are the solutions
Tannery owners say the CETP in Savar requires major restructuring to function effectively, but financial constraints have left essential upgrades on hold for years.
Mizanur Rahman, general secretary of the Bangladesh Tanners Association, told TIMES that urgent repairs costing at least Tk25-30 crore are needed to make the CETP fully operational.
He added that while the government once discussed providing grants, the plan later shifted to requiring the CETP operator to secure loans. Complexities over who would bear the loan responsibility ultimately stalled the initiative.
To reduce pressure on the CETP, the government has permitted several tanneries in the industrial zone to set up their own individual effluent treatment plants (ETPs), of which only two have been established so far.
BSCIC chairman Mohammad Saiful Islam recently told media outlets that letters have been sent to another 10-12 tanneries, offering support including loans if necessary.
Industry insiders warn that for many firms, constructing separate ETPs costing hundreds of millions of taka is not feasible. Even if individual plants are built, the underlying problem persists: while liquid waste can be treated on-site, solid waste management continues to depend on the central CETP.
CETP managing director Mohammad Golam Shahnewaz said an Italian firm is conducting a comprehensive technical evaluation funded by the European Union. The assessment aims to determine the plant’s true capacity and identify design flaws.
“Once completed, it will provide precise recommendations for improvements, which could bring the CETP closer to European standards,” he said.
Rawhide crisis in Ctg
Official figures show that over 800,000 animals were sacrificed in the Chattogram region this Eid al-Adha. Of these, around 415,000 raw hides were collected through local depots, auction centres, and 220 madrassas.
However, the region’s storage infrastructure has long been inadequate to handle the volume of hides produced. As a result, the surge in supply during the festival cannot be managed efficiently within just a few days.
Two decades ago, Chattogram was one of the country’s most important leather production hubs. Today, all 22 of the district’s tanneries are effectively closed, with only Reef Leather operating on a limited scale.
Mokhlesur Rahman, a director at the company, warned, “Unless the closed tanneries are reopened in an environmentally compliant way, managing large volumes of raw hides in the future will remain a serious challenge.”
