Apex are top leather exporters14 November 2001
During the financial year ending June 30, 2001, Bangladesh exports of value added commodities increased by about 15%. Out of the total exports for nine months, the export of leather and leather manufactured goods amounted to about US$197.22 million and it is estimated that the leather exports for the whole year to June 2001 would be about $250 million. There are about two dozen fully mechanised tanneries which produce and export 75% of the finished leather, while the rest is produced and exported by the remaining 150 tanneries. Among the leading tanners are Apex Tannery Ltd, Dhaka; Bay Tanneries Ltd, Dhaka; Dhaka Hide & Skins; SAF Industries Ltd, Dhaka; Lexco Ltd, Dhaka; Reliance Tannery Dhaka; Medina Tannery, Chittagong; and Bata Shoe Co (Bangladesh). Apex Tannery Ltd and their sister company Apex Footwear, with exports of about $34 million, are the biggest exporting leather group in Bangladesh. The founding directors of the Apex Tannery Group, Syed Manzur Elahi, chairman and A B M Rahmatullah, managing director, have infused new blood in their group in the shape of their young and energetic sons who are highly educated in leather technology. Hedayetulla, son of Rahmatullah who is now contesting election for Parliament, is in charge of the tannery. Manzur Elahi has joined the caretaker government as advisor in charge of fisheries and internal water communications while his son Syed Nasim Manzoor has taken over as director in charge of Apex Footwear Ltd. Hedayatullah, who obtained a BSc in Leather Technology from the University of Leicester, told Leather that with a labour force of about 600 people, Apex Tannery Ltd are producing about 2.5 million ft² of cow and goat per month in two tanneries, all of which is exported. In the Hazaribagh Tannery 1.8 million ft² of both wet-blue and finished leather is produced, while the Shafipur Tannery (about 42km north of Dhaka) is producing 60,000 ft² of finished leather. Hazaribagh Tannery also supply wet-blue to Shafipur Tannery for processing finished leather. At present, they are working three shifts to complete their orders. The following is a breakdown of their US$25 million finished leather exports to the various countries: 32% Italy 24% Hong Kong, China 15% Japan 7% Vietnam 22% France, USA, Germany, Korea Hedayatullah said that they use local raw goat skins, particularly from Kushtia (about 300km north of Dhaka) which are well known for their fine grain. They procure raw hides and skins from the local auction houses which are called Posta and have agents all over the country bringing their hides and skins for sale at the Posta. In Bangladesh, the owners of warehouses which are situated around the Posta play a leading role in the development of the leather industry. They sell raw hides and skins to tanners on a commission basis and indirectly they are their financers. With the shortage of raw material some tanneries are trying to tap new sources such as Saudi Arabia if their prices are competitive. As there is no system of duty draw back in Bangladesh, tanners prefer to purchase salted hides and skins from warehouses for processing them for exports. He said that their glazed cow leather for shoes is much in demand in Germany and Spain. Their goat crust is also used for shoes. Cows softy leather is also for shoes and bags. According to Hedayatullah, Apex Tannery have all the most modern machinery including seven spray machines, five skating machines and five polishing machines. Apex Footwear Syed Nasim Manzur, director of Apex Footwear Ltd, told Leather International that the company were set up 12 years ago, initially producing shoes uppers. In 2000, they changed their strategy and began producing high quality dress shoes and exporting them. He said they had changed their target market focus from the traditional high volume/low margin Italian shoe factories to lower volume/higher margin retailers. Due to their high standards, they have been successful in being approved as the only exporter of footwear from Bangladesh to Marks & Spencer UK. Consequently they have exported over 97,800 pairs to this customer alone in 2000. Their shoe factory is situated in Shafipur near their second tannery. They are producing 4,000 pairs of complete shoes and an additional 2,000 pairs of shoe uppers per day. Their workforce of 1,500 employees is 80% female. Syed Nasim Manzoor said that the footwear industry is facing big problems on both the international and domestic fronts. 'The USA and the Far East are hit with recession but we are not really in a better position as there is no duty or quota for Bangladeshi shoes in Japan, the EC and Korea. Our factories cannot increase prices on their products though raw material prices have gone up.' Nasim Manzoor said that there were some big anomalies in the duties on imported components. Both importers of complete shoes and components have to pay 70% duty. This is the strangest aspect of the taxation policy. Even though India produces components, there is still no duty on their import. However shoe exporters are getting a 10% export incentive. Imported shoe components can be stored in a warehouse provided they are used for manufacturing export only shoes. Nasim Manzoor said that due to their high craftsmanship, their shoes are exported to UK, Italy, Japan and prestigious stores such as Marks & Spencer (UK), Deichmann (Germany), Jusco (Japan), Aldelchi (Italy), Filanto (Italy) and John Lewis (UK). 'We try to maintain a high standard of working conditions in our factory without any child labour', said Nasim Manzoor. 'Our buyers periodically inspect our factories to check the high standard of our craftsmanship. Annual export of shoes is around US$9 million.' Apex Footwear have set up 12 Galleries Apex in the main cities of Bangladesh for selling their dress shoes. Nine galleries are in Dhaka, one in Khulna, one in Jessore and one in Sylhet. Bay Tanneries The other big tannery, with a production of 1.2 million ft²/month, is Bay Tanneries Ltd. Annual exports amount to US$12.67 million of goat and cow leathers against $10 million the previous year. Rezaur Rahman, technical director, trained as a leather technologist in the UK. He told Leather International that the biggest problem the tannery faced was the increasing cost of raw material, which had gone up by 40%. His father, Shamsur Rahman, is managing director. Dhaka Hides & Skins Another tannery of size is Dhaka Hides & Skins Ltd which has a production level of 1.5 million ft² of cow and 0.05 million ft² of goat. General manager M N Haque said that their sister footwear concern are producing 5,000 pairs of shoes and 15,000 pairs of uppers every month, while their sister company Earth International Tannery are also producing and exporting around $3.5 million worth of leather. Bata Shoes The factory belonging to Bata Shoes (Bangladesh) Ltd, which is situated in the Tongi area of Dhaka, has played a leading role in answering the footwear needs of the people of Bangladesh. Production runs at 18-20 million pairs of shoes per year. They have their own modern tannery which produces both wet-blue and finished leather. They export 60% of their products and use 40% for making shoes in their own factory. The average price of finished leather in Bangladesh is around $1.60-1.75 per ft² but this is likely to increase if prices of raw hides continue to rise.