BUILD, a leading private think tank has placed a recommendation for forming a high-powered committee of relevant stakeholders for understanding and addressing the constraints of the Tannery Industrial Estate of Dhaka (TIED) operating in Savar.
The recommendation came in the 6th Trade & Investment Working Committee Meeting, organised by Business Initiative Leading Development (BUILD) and the Ministry of Commerce (MOC) held recently at the conference room of MOC at Bangladesh Secretariat.
The meeting was chaired by Senior Secretary of the MOC Shubhasish Bose.
Ms. Ferdaus Ara Begum, CEO, BUILD presented three papers namely, Tannery Industry in Bangladesh and its Export Competitiveness", "Export Competitiveness of Light Engineering Sector-A Case Study of Bicycle Industry in Bangladesh" and "Situation Analysis of Constraints & Policy Support Needs for Export Subsidy/ Cash Incentives for the Exporters".
The paper highlighted procedural, understanding and policy related gaps which need to be bridged to increase finished and crust leather export which declined 24 per cent and 92 per cent respectively in FY2017-18.
An independent third party audit for monitoring current operation of Central Effluent Treatment Plant is a must viewed by the stakeholders of leather sector. Adopting measures for solid wastes management, making Common Chrome Recovery Unit (CCRU) operational, measures for reducing water and chemical used by tanneries and standardizing the water and chemical use parameters in the environmental regulations are some other recommendations, presented by BUILD.
In regard to bi-products from wastages, a Joint Secretary of Ministry of Industries informed that they are working for identifying some projects in this respect. They have also prepared the first draft of Leather and Leather Goods Policy which will be posted on the MOI website soon.
In the context of re-examining the water parameters, BSCIC representative mentioned that it would not be possible to do anything in case of Total Dissolved Solids (TDS) and Total Suspended Solids (TSS), a new project has to be taken for these issues.
President of Bangladesh Tanners Association (BTA) informed that low quality chemicals are being used in tannery which requires the high amount. He endorsed BUILD recommendations of identified 21 Chemicals using only for tannery sector which duties should be reduced.
President of LFMEAB also echoed the voice of the other stakeholders and requested for individual ETPs to qualify for LWG certification. Customs Bond Commissioner in regard to query of entitlement under bond facilities as like as RMG, replied that advocacy through the association is important for regulatory changes.
The meeting discussed the need for export diversification and regulatory barriers to be addressed by the policy makers.
The second presentation was on the light engineering sector which specifically analysed the case of bicycle exports from Bangladesh. There are two manufacturer exporters are operating in Bangladesh exporting 0.7 million to 0.8 million pieces of bicycles mostly to EU. It was highlighted in the paper that there are different value chain actors operating independently, they are parts & component manufacturers, assembler, importers of finished goods and parts and bicycle manufacturers.
Thus backward and forward linkage has not happened. Exporters by themselves producing 50-60% of OEM while remaining are imported. The policy paper suggested for substantial value addition for quality production, process simplification for importing Argon Gas, Technology Support Centre etc. for improving quality products. The paper also recommended for reintroduction of Cash Incentives which was in place in 2002-2012, besides there are tax related discrimination against exporters in the field of painted and non-pained import of bicycle spares, HS code related issues for aluminum and steel bicycle parts etc. In the meeting HS code related issues were endorsed for immediate implementation, private sector stakeholders urged for cash incentives irrespective of bond and non-bond operators. The committee also emphasized for backward linkage and in that respect early establishment of Technology Support Centre and in that respect support from IFC is appreciated.
Senior Secretary, MOC in conclusion appreciated the role of BUILD for coming up with a number of effective reform proposals is appreciated and opined that LLG has got tremendous opportunity to expand as the raw materials are produced within the country.
In a queue to the point of full operation of CETP in Tannery Industry Estate of Dhaka (TIED), he mentioned that a High Powered Committee formation with a specific TOR is an immediate need to find out alternative solution for reversing the export growth of the sector. In this regard, he emphasized on the need for export diversification and he agreed that both Leather and Leather Goods, Light Engineering have tremendous potential to grow but policies need to be supportive.
Executive Member BIDA and representatives from Bangladesh Bank, Department of Environment, BFTI, SME Foundation, Department of Explosive, Ministry of Fisheries and Livestock, Dhaka Customs House were also present. President LFMEAB and BTA, BAPA, BKMEA, BFLLFEA, BIAA, MCCI, RFL, Rahim Afrooz, SMART Leather and Picard Bangladesh also spoke on the occasion.
Representative of IFC, senior officials of Ministry of Commerce, among others, were also present.
