Leather Chemical Industry Report

To St udy t he Current MarketTo St udy t he Current Market
Scenario and t he Fut ure ProspectScenario and t he Fut ure Prospect
of the Leat her Chemical I ndust ry ofof the Leat her Chemical I ndust ry of
BangladeshBangladesh
1

“To Study the Current Market Scenario and the
Future Prospect of Leather Chemical Industry of
Bangladesh”
Internship ReportInternship Report
Submitted To:
MR. AZMAL HOSSAINMR. AZMAL HOSSAIN
Executive Director
ACI Trading Limited.
Submitted By:
Mohammad Tawhid ReazMohammad Tawhid Reaz
Internee,
ACI Trading Limited.
A D V A N C E D C H E M I C A L I N D U S T R I S L I M I T E D
245, Tejgaon Industries Area,
Dhaka- 1208.
Date: 25 June, 2006.
2

June 24, 2006
Mr. Golam Mohammed Chowdhury
Chairman
Internship & Placement Office
Institute of Business Administration
University of Dhaka
Dhaka-1000
Dear Sir:
Subject: Internship Report on
“To study the current market scenario and the future prospect of the leather chemical
industry of Bangladesh”.
It is my pleasure to present this Report on “To study the current market scenario and the future
prospect of the leather chemical industry of Bangladesh” as a requirement for completing my Masters
in Business Administration with concentration in Marketing. The report presents my findings
and analyses on the Leather chemical industry of Bangladesh and the project I worked on for
the last 10 weeks in ACI Trading Limited.
I am grateful to you and my supervisors; Mr. Mustaque Ahmed, Assistant Professor,
IBA and Dr. Azmal Hussain, Executive Director, ACI Trading Limited, for giving me the
opportunity to carry out this report.
With kind regards
Sincerely yours,
Mohammad Tawhid Reaz
Roll 037
Batch 38
MBA Program
University of Dhaka
3

Acknowledgement
In preparing this report for ACI Trading Limited, I Have received commendable support
from all the employees of Leather division of ACI Trading Limited.
I am very much grateful to my organizational supervisor Mr. Azmal Hossain, Executive
Director, ACI Trading Limited, to give the opportunity to work on such a challenging
project. He has given me all kind official support to complete the report perfectly.
I like to thank Mr. Saiful Azam Kashem, Senior Technical Sales Officer, Mr. Munirul
Islam, Technical Sales Officer and Mr. Abul Khayer of ACI trading limited for helping me
in every aspect for the completion of the report.
I am very much indebted to my supervisor Mr. Mustaque Ahmed, Assistant Professor,
IBA, University of Dhaka for giving me direction at different times to prepare this report. It
is his guided supervision that resulted in successful completion and timely submission of
the report.
I am thankful to my friend Mr. Fahim bin Asmat, Program Assistant, Leather Sector
Business Promotion Council (LSBPC) to let me study their valuable research reports and
guide me with his expert opinion.
I also like to thank all the librarians of various libraries to let me utilize their library
facilities, all the experts, members of different leather and tanners associations, and all the
other interviewees to help me with their resourceful contribution. (N.T: Name of the main
interviewees and the organization visited for completing this report is given in Appendix)
4

June 25, 2006
Mr. Azmal Hossain
Executive Director
ACI Trading Limited
Dear Sir:
Subject:Internship Report on
“To study the current market scenario and the future prospect of the leather chemical
industry of Bangladesh”.
It is my pleasure to present this Report on “To study the current market scenario and the
future prospect of the leather chemical industry of Bangladesh” as a requirement for
completing my Masters in Business Administration (MBA) program with concentration
in Marketing. The report presents my findings and analyses on the Leather chemical
industry of Bangladesh and the project I worked on for the last 10 weeks in ACI
Trading Limited.
I am grateful to you for your organizational co-operation as an organizational
supervisor and to my supervisor; Mr. Mustaque Ahmed, Associate Professor, IBA and
Prof. Golam Mohammed Chowdhury, Chairman, Placement & Internship Program,
Institute of Business Administration for giving me the opportunity to carry out this
report.
With kind regards
Sincerely yours,
Mohammad Tawhid Reaz
Roll 037
Batch 38
MBA Program
University of Dhaka
5

TABLE OF CONTENTS
Pg.
EXECUTIVE SUMMARY 1
CHAPTER ONE
3
1. INTRODUCTION 3
1.1. ORIGIN OF THE REPORT 3
1.2. OBJECTIVE 3
1.2.1 BROAD OBJECTIVE 3
1.2.2 SPECIFIC OBJECTIVES 3
1.3 SCOPE OF THE RESEARCH 4
1.4 METHODOLOGY 4
1.5 LIMITATIONS 5
CHAPTER TWO
6
2. ABOUT THE ORGANIZATION 6
2.1. COMPANY PROFILE AT A GLANCE 6
2.1.1 STRATEGIC BUSINESS UNITS 6
2.1.2 SUBSIDIARIES 6
2.1.3 EXECUTIVE MANAGEMENT 7
2.1.4 FINANCIALS (YEAR ENDING DEC, 2004) 7
2.2 BACKGROUND 8
2.3 COMPANY MISSION 8
2.4 COMPANY VISION 8
2.5 VALUES 9
2.6 DISTRIBUTION NETWORK 9
2.7 BUSINESS UNITS 10
2.7.1 ACI PHARMACEUTICALS 10
2.7.2 ACI CROP CARE AND PUBLIC HEALTH DIVISION 10
2.7.3 ACI CONSUMER BRANDS 10
2.8 MANUFACTURING STANDARDS 11
2.9 DIVERSIFICATION INTO NEW INDUSTRIES 11
2.10 ACI FORMULATION LIMITED 12
2.11 QUALITY POLICY 12
2.12 BUSINESS PERFORMANCE AND GROWTH SCENARIO OF ACI LIMITED 13
2.13 ACI TARDING LIMITED 15
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2.13.1 ORGANOGRAM- BUSINESS MANAGEMENT 16
2.13.2 ORGANOGRAM- BUSINESS SUPPORT FUNCTIONS 16
2.13.3 ORGANOGRAM OF ACI TRADING LIMITED (FOCUSING LEATHER
CHEMICAL DIVISION)
17
2.13.4 MISSION 18
2.13.5 STRATEGIC OBJECTIVE 18
2.13.6 INDENT SALES GROWTH FROM 2002-2005 & BUDGET 2006 18
2.13.7 EX-STOCK SALES GROWTH FROM 2002-2005 & BUDGET 2006 19
2.13.8 PROFIT & LOSS BUDGET 2006 20
2.13.9 SWOT ANALYSIS OF ACI TRADING LIMITED 21
2.13.1
0
BUSINESS STRATEGY 21
2.13.1
1
KEY DIFFERENTIATING FACTORS THAT ATTRACTS CUSTOMERS 22
2.13.1
2
PRODUCTS, CUSTOMERS & SUPPLIER BASE UP TO 2005 22
2.13.1
3
MAJOR DEVELOPMENT THROUGH INITIATIVE IN 2005 23
2.13.1
4
INITIATIVE TO BE TAKEN IN 2006 23
CHAPTER THREE
24
3. LEATHER INDUSTRY OF BANGLADESH 24
3.0 LEATHER INDUSTRY BACKGROUND 24
3.0.1 THE LEATHER INDUSTRY IN BANGLADESH 24
3.0.2 THE BEGINNING OF THE TANNERY 24
3.0.3 POST LIBERATION PERIOD 25
3.0.4 PRESENT CONDITION 25
CHAPTER FOUR
27
4. PRODUCTION 27
4.0 LEATHER SECTOR IN THE ECONOMY OF BANGLADESH 27
CHAPTER FIVE
31
7

5 LEATHER EXPORT 31
5.1 LEATHER EXPORT PERFORMATION OF BANGLADESH 31
5.2 SALES & EXPORTS OF LEATHER SECTOR ENTERPRISE/FIRMS 34
5.2.1 SALES & EXPORTS: LEATHER PROCESSING 35
5.2.2 SALES & EXPORTS: FOOTWEAR 36
5.2.3 SALES & EXPORTS: LEATHER GOODS 36
CHAPTER SIX
39
6 RAW MATERIALS 39
6.1 RAW MATERIALS USED BY THE LEATHER FIRMS 40
6.2 RAW MATERIALS: LEATHER PROCESSING 40
6.2.1 RAW MATERIALS FOR WET BLUE 40
6.2.2 RAW MATERIALS FOR CRUST 41
6.2.3 RAW MATERIALS FOR FINISHED LEATHER 43
6.2.4 RAW MATERIALS: FOOTWEAR 43
6.2.5 RAW MATERIALS: LEATHER GOODS 44
6.3 AVAILABILITY OF RAW MATERIALS IN BANGLADESH 45
CHAPTER SEVEN
46
7 SWOT ANALYSIS 46
7.1 STRENGTHS 46
7.1.1 STRENGTHS OF THE FIRMS: LEATHER PROCESSING 46
7.1.2 STRENGTHS OF THE FIRMS: LEATHER FOOTWEAR 47
7.1.3 STRENGTHS OF THE FIRMS: LEATHER GOODS 48
7.2 WEAKNESSES 50
7.2.1 WEAKNESSES OF THE FIRMS: LEATHER PROCESSING 50
7.2.2 WEAKNESSES OF THE FIRMS: LEATHER FOOTWEAR 51
7.2.3 WEAKNESSES OF THE FIRMS: LEATHER GOODS 52
7.3 OPPORTUNITIES 53
7.3.1 OPPORTUNITIES OF THE FIRMS: LEATHER PROCESSING 53
7.3.2 OPPORTUNITIES OF THE FIRMS: LEATHER FOOTWEAR 54
7.3.3 OPPORTUNITIES OF THE FIRMS: LEATHER GOODS 55
7.4 THREATS 56
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7.4.1 THREATS OF THE FIRMS: LEATHER PROCESSING 56
7.4.2 THREATS OF THE FIRMS: LEATHER FOOTWEAR 57
7.4.3 THREATS OF THE FIRMS: LEATHER GOODS 59
CHAPTER EIGHT
60
8 PRODUCTION STAGES 60
8.1 PRODUCTION STAGES IN LEATHER PROCESSING INDUSTRY 60
8.2 PRODUCTION STAGES IN LEATHER GOODS & FOOTWEAR INDUSTRY 61
8.3 DESCRIPTION OF THE VARIOUS STAGES OF LEATHER PROCESSING 62
8.3.1 WET BLUE SECTION 62
8.3.2 CRUST SECTION 63
8.3.3 FINISHING SECTION 64
CHAPTER NINE
65
9.0 LEATHER CHEMICALS & ACCESSORIES 65
(DATA COLLECTED FROM PRIMARY SURVEY)
9.1 CHEMICALS & ACCESSIORIES: LEATHER SECTOR 66
9.1.1 CHEMICALS: LEATHER PROCESSING: WET-BLUE 66
9.1.2 LEATHER PROCESSING: CRUST LEATHER 68
9.1.3 LEATHER PROCESSING: FINISHED LEATHER 69
9.2 CHEMICAL AND ACCESIORIES : FOOTWEAR 70
9.3 CHEMICAL AND ACCESIORIES : LEATHER GOODS 72
CHAPTER TEN
73
10.0 MAJOR PLAYERS OF THE LEATHER CHEMICAL INDUSTRY 73
(DATA COLLECTED FROM PRIMARY SURVEY)
10.1 MARKET SHARE OF MAJOR BEAM HOUSE CHEMICAL SUPPLIERS
(WET BLUE)
73
10.1.1 TOTAL QUANTITY WISE MARKET SHARE (WET BLUE) 76
10.2 MARKET SHARE OF CHEMICAL SUPPLIERS (WET BLUE TO CRUST) 77
10.2.1 TOTAL QUANTITY WISE MARKET SHARE (CRUST) 79
10.3 MARKET SHARE OF CHEMICAL SUPPLIERS (CRUST TO FINISH) 80
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10.3.1 TOTAL QUANTITY WISE MARKET SHARE (FINISHING) 80
CHAPTER ELEVEN
81
11 FINDINGS AND RECOMMENDATIONS 81
11.1 PROBLEMS OF ACI TRADING AND STAHL INLEATHER CHEMICAL
MARKETING
83
APPENDIXAPPENDIX A1A1
85
91
92
95
96
98
107
APPENDIXAPPENDIX BB
111
APPENDIXAPPENDIX CC11
113
APPENDIXAPPENDIX CC22
117
REFERENCESREFERENCES
118
10

Executive Summary
The history of the leather sector and tannery industry in Bangladesh started when R.P Saha set up
first tannery in Narayanganj back in 1940. It was later shifted to Hazaribagh area of Dhaka, which
turned into a location that now accommodates a large number of tannery units of the whole country.
At present, the leather sector of Bangladesh has 220 processing units located at different parts of
the country (mainly in Hazaribagh, Dhaka). But only 28 tanneries are in operation, among them 20
are operating in crust section and 8 are in finishing section.
Total capital invested in the tannery industry is estimated at Tk 2.5 billion, of which
government/bank finance is about Tk 1.2 billion. Bangladesh currently produces about 20.0 million
sq. meters of leather and leather goods per year. Contribution of leather sector (hide &skin, leather
and leather goods, and footwear except rubber) to GDP is 0.31 (at constant price) in FY 2003.
According to Leather Sector Census Study,2005 total production of wet blue leather in 2003 was
3,50,60,000 square feet, crust leather 6,61,72,000 square feet, finished leather 13,48,20,000 feet,
whereas 1,67,66,000 pairs of leather footwear were produced in 2003 and 766000 pieces of leather
goods were produced in 2003. In 2004, 247 million square feet raw hides were available for the
leather industry, among which cow and buffalo hides were 184 million square feet and goat and
sheep skin were 6 million sq.ft. According to a report published by FAO in 2003 the numbers of
bovine animals in Bangladesh were 2,48,30,000 in 2002; the number of sheep and lambs were
11,43,000 and there were 3,44,00,000 goats and kids in Bangladesh.
Bangladesh has exported leather and leather goods worth 220.93 Mn. US$ in 2004-2005, whereas it
has exported 211.41 Mn. US$ valued leather and leather goods in 2003-04. The export target for
2005-06 is 235 Mn.US$ in which the export performance achieved in July2005-November2005
was 96.21Mn. US$. Total export of Bangladesh in 2004-05 was 8654.52Mn. US$, so the
contribution of the leather sector export to the total export was 2.55% in 2004-05. The main
exporting countries are Hong Kong, Italy, Japan, Vietnam, Republic of Korea, Taiwan etc.
Raw hides used for producing wet-blue are mainly procured from local sources. Locally, raw hides
are collected mainly from leather depot located at Dhaka, Chittagong, Comilla, Kushtia, Natore and
Rangpur. Only an insignificant volume of camel hide is imported from external sources. South
Africa was the only source of camel hide imports in 2003. Wet blue, raw materials for producing
crust is mainly collected from local sources particularly from Dhaka. A small quantity of wet-blue
11

to prepare crust leather is collected from Chttagong and Jessor. Very insignificant volume of raw
materials is imported. In 2003, only about 1.5 percent of total raw materials (wet blue cow and
camel) were imported from South Africa, Australia, and Brazil. Crust leather used for producing
finished leather is also collected mainly from local sources. Only a very insignificant volume of
cow crust is imported to produce finished leather. In 2003, cow crust was imported from Australia
valued Tk.34 million.
There are hundreds of importers, merchants and suppliers are supplying chemicals required for the
whole leather industry. The processing of raw hides to finished leather mainly classified into three
different stages 1) Wet Blue, 2) Crust and 3) Finishing section.
In 2003, 3202MT (worth 8,46,23,000Tk) leather chemical used for wet blue leather stage in
Bangladesh. In which 1956MT (worth 2,06,85,000Tk) was local made and 1274MT (worth
6,39,38,000Tk) was imported. In the same year 901MT (worth 119041000Tk) chemical used in
crust stage, in which 885MT was foreign supply and 16MT was local supply. On the other hand
130 MT (worth taka 46468000) chemical used for finishing section, in which 120MT collected
from outside and 10MT was collected from local sources.
The major chemical suppliers are Germany, Holland, UK, Italy, and India. Recently local
merchants are also importing from China, Singapore etc.
In addition of finding out the whole scenario of the leather sector of Bangladesh, this study mainly
focused to identify the major chemical suppliers in the different stages of leather processing. To
find out the main chemicals required in various stages of finished leather production was also the
prime consideration of this study. The market share contributed by the suppliers in various stages
was the main finding of this report. Along with primary and secondary survey, in depth interview
and Expert opinions have been taken for the final modification and recommendation of the whole
research. Why the big suppliers are loosing their market and why small and new suppliers are doing
well and getting the market acceptability has also been discussed in this research material.
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Chapter-OneChapter-One
Introduction
1.1. Origin of the Report
This internship report was prepared as a compulsory requirement for the MBA degree.
From the program office of the Institute of Business Administration (IBA), I was placed as
an intern in ACI trading limited. The project is titled “To study the current market scenario
and the future prospect of the leather chemical industry of Bangladesh”. The project was
assigned to me by my supervisor at ACI Trading Limited, Mr. Azmal Hossain, Executive
Director of ACI Trading Limited. It was overseen by my faculty advisor Mr. Mustaque
Ahmed, Associate Professor, Institute of Business Administration, University of Dhaka.
1.2. Objective
1.2.1 Broad Objective
To understand the current market situation and the future business prospect of the leather
chemical industry of Bangladesh from the viewpoint of ACI Trading limited.
1.2.2 Specific Objectives
To achieve the broad objective the following specific objectives are required to be achieved.
1. Identify the major market players of leather chemicals (especially in value addition
section).
2. To analyze the ins and outs of the tannery industry of Bangladesh.
3. To compare the marketing strategies of all the major chemical suppliers in
Bangladesh and to find which marketing strategy the clients prefer.
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4. To find out the proper marketing strategy for ACI Trading limited to increase their
market share in crust and finishing section.
1.3. Scope of the Research
This report is basically a requirement of ACI trading limited to understand the details of
tannery industry in Bangladesh. ACI trading limited is the agent of Stahl (Holland), a well
renowned chemical supplier in the world. From the ACI’s point of view, they want to know
their competitors and how they are marketing in Bangladesh.
To know the major leather chemical market players in Bangladesh, the tannery factories
and their leather technologists are the main focus of this research. All the organized bodies
related to leather sector such as Bangladesh Chemical Importers and Merchants
Association, Bangladesh Tanners Association, Bangladesh Finished Leather, Leather goods
and Footwear Exporters Association, Bangladesh Leather Manufacturers Association,
Bangladesh Leather Importers Association are the major considerations of this research.
Leather Sector Business Promotion Council (LSBPC) was the prime source of all research
papers necessary for this study.
1.4. Methodology
To find out the major leather chemical market players in Bangladesh, I basically separated
the respondents in three different divisions 1) Leather Technologists and employees of
various tanneries, 2) Members of chemical importers and merchants association and 3) The
leather chemical retailers or whole sellers.
In depth interview of the first two respondent divisions have been scrupulously scrutinized.
Both formal question answer session and informal discussions were the part of this
research. Primary interviews of the third respondent sections have been made, which was a
14

questionnaire based interview. Convenient sampling method was applied for selecting the
interviewees.
All the findings have been verified by numerous experts, leather technologists, and well
renowned leather chemical merchants of Bangladesh.
Although, there are not enough secondary materials available in Bangladesh, Leather
Sector Business Promotion Council (LSBPC) of Bangladesh has been repeatedly visited
and they helped me by providing all their necessary secondary materials.
1.7. Limitations
1. The main problem in dealing with leather sector is that, there are not enough
secondary research materials and published information available in
Bangladesh.
2. All the associations other than Bangladesh Finished Leather, Leather goods and
Footwear Exporters Association are not well organized to give the exact
information; most of them even don’t have their internal annual reports.
3. Since the whole leather sector of Bangladesh is shrinking day by day, the
researchers are not focusing this sector well enough comparing to the booming
sectors of Bangladesh like RMG.
15

Chapter-TwoChapter-Two
About The Organization
2.12.1 Company Profile at a Glance:
 Company Name : Advanced Chemical Industries (ACI) Limited
 Address : ACI Centre, 245, Tejgaon Industrial Area,
Dhaka-1208.
 Phone : +88-02-9885694
 Fax : +00-02-9886029
 E-mail : INFO@ACI-BD.COM
 Web Page : WWW. ACI-BD. COM
 Company Logo :
2.1.1 Strategic Business Units:
• Pharmaceuticals
• Consumer Brands
• Agribusiness-
a) Crop Care and Public Health
b) Animal Health
2.1.2 Subsidiaries:
• ACI Trading Limited
• ACI Formulation Limited
• Apex Leather crafts Limited
• ACI Salt Limited
16

2.1.3 Executive Management:
• Mr. M Anis-Us-Dowla Chairman
• Dr. Arif-Dowla Managing Director
• Mr. M Mohibuz Zaman Chief Operating
Officer,
Pharmaceuticals.
• Dr. F H Ansarey Executive Director,
Agribusiness.
• Mr. Azmal Hossain Executive Director,
Trade.
• Mr. Syed Alamgir Executive Director,
Consumer Brands.
• Mr. Muallem A Choudhury Executive Director,
Finance & Planning.
• Mr. Towfiqur Rahman General Manager,
Operation.
• Mr. Priyatosh Datta General Manager,
Quality Assurance.
• Ms. Sheema Abed Rahman General Manager,
Corporate Service.
• Mr. Pradip Kar. Chowdhury Financial Controller
2.1.4 Financials (Year Ending December 2004):
 Authorized Capital: Taka 500 Million.
 Paid-Up Capital: Taka 161.70 Million.
 Sales: Taka 2,558 Million.
17

 Numbers of Employees: 2161
2.2 Background:
ACI was established as the subsidiary of Imperial Chemical Industries (ICI) in the East
Pakistan in 1968. After independence the company has been incorporated in Bangladesh on
the 24th
of January, 1973 as ICI Bangladesh Manufactures Limited and also as Public
Limited Company. This Company also obtained listing with Dhaka Stock Exchange on
28.12.1976 and its first trading of share took place on 09.03.1994. Later on May 05, 1992,
ICI Plc divested 70% of its shareholders to local management. Subsequently the company
was registered in the name of Advanced Chemical Industries Limited. Listing with
Chittagong Stock Exchange was making on 22 October, 1995.
Advanced Chemicals Industries (ACI) Limited is one of the leading conglomerates in
Bangladesh, with a multinational image. ACI is a Public Limited Company with a total
number of 19,653 shareholders. Among these, there are three foreign and fifty local
institutional shareholders. The company has diversified into five major businesses. Beside
these, the company has a large list of international associates and partners with various
trade and business agreements.
2.3 Company Mission:
ACI’s mission is to enrich the quality of life of people through responsible application of
knowledge, skills and technology. ACI is committed to the pursuit of excellence through
world-class products, innovative processes and empowered employees to provide the
highest level of satisfaction to its customers.
2.4 Company Vision:
To realize the mission ACI will:
• Endeavor to attain a position of leadership in each category of it businesses.
18

• Attain a high level of productivity in all its operations through effective and
efficient use of resources, adoption of appropriate technology and alignment
with our core competencies.
• Develop its employees by encouraging empowerment and rewarding
innovation.
• Promote an environment for learning and personal growth of its employees.
• Provide products and services of high and consistent quality, ensuring value
for money to its customers.
• Encourage and assist in the qualitative improvement of the services of its
suppliers and distributors.
• Establish harmonious relationship with the community and promote greater
environmental responsibility within its sphere of influence.
2.5 Values:
• Quality
• Customer Focus
• Fairness
• Transparency
• Continuous Improvement
2.6 Distribution Network:
The company maintains strategically located sales centers in 198 different locations across
the country. It has developed an advanced distribution system through its more than 300
skilled and trained manpower and a large fleet over 80 vehicles. The distribution system is
capable of handling continuing volume of diverse range of products from the various
businesses.
The company’s distribution centers are highly streamlined, computerized and automated.
We are capable of maintaining a cold chain for some specialized range of products such as
19

vaccines and insulin. The combination of this advanced function and multi dimensional
capabilities make it possible to handle hundreds of products efficiently.
2.7 Business Units:
2.7.1 ACI Pharmaceuticals: In 2004, ACI Pharmaceuticals ranked 11th
in the
Bangladesh pharmaceuticals industry. It provides the market with a wide
selection of drugs across all major therapeutic classes, and also offers some
specially medicines. ACI Pharmaceutical represents AstraZeneca, Eli Lily and
UCB in Bangladesh.
2.7.2 ACI Crop Care and Public Heath Division: This Division is holding the
leadership position in the industries; Animal Health has experienced one of the highest
growth rates in this sector. ACI Agribusiness has partnerships with several international
conglomerates including Ceva Santhe Animale, Invesa, UCB, Isago Asia and Boreegaad
Taicang Chemical Co. Ltd.sdx.
2.7.3 ACI Consumer Brands: This Division is a leading Fast Moving Consumer
Goods (FMCG) company in Bangladesh. In the liquid antiseptic and mosquito repellant
categories, this division is a very strong market leader. Foreign partners represented in by
this division include Godrej Consumer Products (for hair care and skin care ), Parle Group
(for Parle G biscuits), Beiersdorf, Germany (for Nivea range of Products) and Colgate
Palmolive.
ACI has formed joint ventures with leading FMCG and agribusiness players in the region.
These are:
• Asian Consumer Care Private Ltd: Joint venture of ACI and Redrock
Limited, for distribution of various ranges of Dabur products in Bangladesh.
ACI holds 50% stake in the venture.
20

• Tetly ACI Bangladesh Ltd: Joint venture of ACI and Tetley Group of
United Kingdom for distribution of Tetley products in Bangladesh, with
ACI having 50% shareholding.
Many ACI products have crossed our national boundary and are being successfully
exported to various countries in Asia, the Middle East and the CIS region. The responsible
of foreign consumers to our products has been encouraging.
2.8 Manufacturing Standards:
ACI has three separate manufacturing plants in the outskirts of Dhaka. The
Pharmaceuticals plant is located at Narayanganj; ACI Formulations has been setup in
Gazipur and the Tetley factory has been built at Konabari. ACI Limited is the first
company in Bangladesh to have attained the ISO 9001 certification for Quality
Management and ISO 14001 for Environment Management. The Trading subsidiary has
also received ISO 9002 certificate. At our manufacturing facilities, we follow CGMP
guidelines and standards recommended by World Health Organization (WHO) for
pharmaceutical formulations.
2.9 Diversification into new industries:
ACI Limited is venturing into new areas of business, as part of its diversification
initiatives. Two such businesses being set up are ACI Salt Ltd. And ACI Godrej Agrovet
Private Limited.
• ACI Salt Ltd: ACI has set up its salt plant in Rupganj, on the bands of the
Shitalakhya river. The plant will produce refined iodized salt through
Thermal Evaporation System. ACI has used technology from China Heavy
Machineries Corporation (CHMC) in establishing the plant. The end product
will be high quality, free-flowing salt with even, crystallized grains. The
iodine content of ACI salt will have a stability of more than 6 months. The
project has been undertaken at an approximate cost of Taka 32 crores.
21

• ACI Godrej Agrovet Private Limited: Godrej is a pioneer in the packaged
meat business in India. It is also the market leader in the poultry industry,
and the owner of ‘Real Good’ brand. ACI and Godrej have a joint venture in
Bangladesh to set up an Integrated Poultry Project. Under this project, ACI
Godrej Agovet has already set up a feed mill at Sirajganj. This is fully
automatic pellet poultry and fisheries feed mill, which uses technology from
Jiangsu Muyang group of China. The company has also set up a hatchery at
Joynabazar, on the Dhaka Mymenshingh road, with technology from
Godrej. The plans for this project also include establishing Grand Parents
and Parent Stock breeding farms. The investment in the project is Taka 8
crores, with ACI Limited having 50% shareholding of the company.
2.10 ACI Formulation Limited:
ACI Formulations Limited (ACI FL) is a subsidiary of ACI Limited, located at Gazipur, in
the outskirt of Dhaka.
ACI FL manufactures majority of the products of ACI strategic Business Limited except
for Pharmaceuticals division. The factory is equipped with the state-of-Art facilities for
product formulations and process innovation. These include modern computerized
equipment like HPLC and GLC.
The product range manufactured at ACI FL include Crop Protection Chemicals like
insecticides, herbicides and fungicides in granular, powder and liquid forms, Mosquito
Pesticides in the forms of aerosols, vaporizers and coils, and households chemicals like
toilet cleaners and hand wash.
2.11Quality Policy
22

ACI aims is to achieve business excellence through quality by understanding accepting,
meeting and exceeding customer expectations.
ACI follows International Standards on Quality Management System to ensure consistent
quality of products and services to achieve customer satisfaction. ACI also meets all
national regulatory requirements relating to its current business and ensures that current
Good Manufacturing Practices (CGMP) as recommended by World Health Organization is
followed for its pharmaceutical operations.
The management of ACI commits itself to quality as the prime consideration in all its
business decisions. All employees of ACI must follow documented procedures to ensure
compliance with quality standards.
The pool of human resources of the company will be developed to their full potential and
harnessed through regular training and their participation in seeking continuous
improvement of work methods.
2.12Business Performance and Growth Scenario of ACI
Limited:
• Issued & paid up capital (Tk.)
• Net Turnover (Tk.)
• Gr oss margin (%)
• Profit after tax (Tk.)
• Rate of Dividend (%)
• Earningsper share (EPS) (Times)
• Number of employees
f inancial analysis 2002f inancial analysis 2002 -- 20042004
BusinessBusiness
PerformancePerformance
161,700,000
2,052,913,536
30
109,180,668
37.5
6.75
1662
20022002
161,700,000
2,239,565,258
29
85,413,760
40.0
5.28
1883
20032003
161,700,000
2,557,772,237
29
89,516,202
42.5
5.54
1924
20042004
23

Figure No: 2.1
business divisionsbusiness divisions
Contribution by revenue 2 0 0 42 0 0 4
BusinessBusiness
PerformancePerformance
Figure No: 2.2
24

sales & profit Grow t hsales & profit Grow t h
14.21%14.21%
Figure No: 2.3
2.13 ACI Trading Limited
ACI Trading Ltd is one of the leading Trading Houses in Bangladesh. Originally it was
ICI Pakistan Ltd established as the subsidiary of Imperial Chemical Industries (ICI) in the
then East Pakistan. After independence of Bangladesh the operation continued as ICI
Bangladesh Ltd. In July 1994 ACI Ltd another divested part of ICI PLC UK for
Pharmaceuticals and Agrochemicals operation purchased ICI Bangladesh Ltd from ICI
PLC and renamed it to ACI Trading Ltd.
ACI Trading Ltd has been accredited with ISO 9002 certification since June 1997 for its
Quality System on indenting business. The Company is mainly involved in marketing and
sales of various Industrial Chemicals, Petrochemicals, Plastics, Pharmaceuticals, Leather
and Shoe finishes. Textile Dyes and Auxiliaries through Indent sales. It has four business
divisions such as Chemicals, Textile, Leather and Water Pumps. To render technical
service ACI Trading has two separate technical application laboratories for textile and
leather businesses.
25

We represent ‘World Class Products’ in Bangladesh from ICI and some other multi-
nationals like ExxonMobile, Solvay Interox, Enichem, Huntsman Tioxide, Magadi Soda
Co., Stahl UK Ltd, Onga Australia Pte Ltd etc. We also represent some reputed Principals
form Asian countries mostly from India, Singapore and Malaysia.
This is a 60% owned subsidiary. ICI, Zeneca, Exxon, Stahl are leaders in their respective
fields and ACI have excellent market share of their products in Bangladesh.
The major responsibilities of ACI Trading are:
- Representing various international companies
- Procuring raw materials
2.13.1 Organogram – Business Management
Figure No: 2.4
2.13.2 Organogram – Business Support Functions
26
Managing
Director
Executive
Director,
Pharma
Executive
Director,
Agro
Executive
Director,
Consumer
Executive
Director,
Trade
Executive
Director,
Operation

Figure No: 2.5
2.13.3 Organ gram of ACI Trading Limited (Focusing Leather
Chemical Division)
Managing
Director
General
Manager,
Corporate
Financial
Controller
General
Manager,
Distributor
Commercial
Manager
Audit
Manager
27

Figure 2.6
2.13.4 Mission :
Dr Arif Dowla
Managing Director
Azmal Hossain
Executive Director (Trading)
A Khayer
Coordination Officer
Textile Division Leather Chemical Division Chemical Division
M S Dastidar
Asst. Manger, Commercial
Saiful Azam Kashem
Sr. Technical Sales Oficer
Munirul Islam
Technical Sales Oficer
28

Want to be a leading trusted quality Trading Company to earn confidence of the customers.
To establish a long-term business relation by offering quality products & services from
World Class chemical companies in alignment with our core values.
2.13.5 Strategic Objective :
• To sustain and improve Market Share for the key products
• To offer World Class products from reputed sources
• Increase ability to compete in the industry by developing people
• To render superior service (technical & logistics) to customers
• To maintain & improve business relation with our Principals
• New Products Sourcing from reputed manufacturers
• Aggressively grow Ex-stock Trading with calculative risk
• To ensure stable earning through balanced product port-folio
• Taking care of our shareholders interest.
2.13.6 Indent Sales Growth from 2002-2005 & Budget 2006
29
686
904
1,420
1575 1,538
1855
0
500
1000
1500
2000
Act 2002 Act 2003 Act 2004 Bud 2005 Act 2005 Bud 2006

2.13.7 Ex-stock Sales Growth from 2002-2005 & Budget 2006
Growth %
2003 31.77
2004 57.08
2005 8.31
2006 20.61
Reason for
variance 05
 UCB Film not contributed although budgeted in ’05
 Allocation & price constraint of ExxonMobil Plastics
for 3 months
 Scares of Foreign Exchange & restriction on L/C by
Central Bank
Assumption
for Bud’06
 Increase customer & product base
 New initiative for aggressive growth
30
31.0 29.8 30.8
54.42 53.6
78.7
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
Act 2002 Act 2003 Act 2004 Bud 2005 Act 2005 Bud 2006

Reason for
variance’05
 Less ExxonMobil Plastics sales due to strategic import
 Stahl sales was behind due to recession in Leather
Industry
Assumption for
Bud’06
 To increase ExxonMobil Plastics sales with calculative
risk
 To increase Textile Auxiliaries sales through Cola
Project
 To increase sales of MEC, Cereclor
 Inclusion of other products like TiO2, PET
31

2.13.8 Profit and Loss Budget 2006
2.13.9 SWOT Analysis of ACI Trading Limited
Strength
• On going need base training of people (Management & Technical)
• Well groomed Employees & Professional approach
• Association of global famous brand (ExxonMobil, ICI)
Growth %0
2003 -3.87
2004 3.36
2005 74.03
2006 46.83
32
Net Sales (Ex-stock) 27.47 28.25 49.97 70.00 40.08
Total COGS 22.15 22.15 41.00 60.55 47.68
Gross Profit 5.32 6.10 8.97 9.45 5.36
Commission Income 16.18 16.74 17.60 22.10 25.57
Fixed Expenses 7.83 9.26 10.56 11.39 7.81
Variable Expenses 1.80 0.93 1.21 1.22 0.83
Total Marketing Expenses 9.63 10.19 11.77 12.61 7.09
Fixed Expenses 1.33 1.53 2.39 3.35 40.17
Variable Expenses 0.52 0.26 0.50 0.50 0.00
Total FF Expenses 1.85 1.79 2.89 3.85 33.22
Distribution Expenses 0.13 0.06 0.06 0.04 -33.33
Administration Expenses 0.60 0.60 0.60 0.60 0.00
Total Operating Expenses 12.21 12.64 15.32 17.10 11.59
Other Income 0.12 1.75 1.50 1.50 0.00
Trading Profit 9.40 11.95 12.75 15.96 25.14
Financing Cost 2.38 3.07 2.64 2.80 6.06
Profit Before WPF & Tax 7.01 8.88 10.11 13.16 30.12
Variance
%
Marketing Expenses :
Field Force Expenses:
Actual
2003
Actual
2004
Estimated
2005
Budget
2006

• Loyal customer base for World Class products
• Quality perception of customer for products & services from ACI
• Support of ACI conglomerate & its image
Weakness
• Achievement depends on supplier’s own strategy
• Much dependent on few major suppliers
• Some major Raw Material suppliers absence in Portfolio
• Uncompetitive price & longer lead-time (Europe vs. India/China)
• Technical support is based on suppliers’ priority
Opportunity
• More Local & Export orientated industries coming up
• Sourcing Chinese suppliers for some major RM
• New business line expansion (API, PET, PS etc)
• Value addition of products (Textile, Leather)
• Increase Ex-stock Trading (existing & new)
Threat
• Indian & Chinese cheaper RM suppliers
• Local basic RM manufacturers coming up
• Increase of competition taking advantage of IT
2.13.10 Business Strategy
To nourish the Strength
• More need base training of people (Management & Technical)
• Build more relation with major supplier
• Exert Professional Behavior to maintain the reputation of ACI
33

• Proactive approach to customers for relationship marketing
To turn Weaknesses to Strength
• Find suppliers for some major Raw Material not in range
• Update suppliers with market & competition on regular basis
• Insist supplier for technical support showing business potentiality
To avail Opportunities
• Increase customer base
• Increase product base
• Step for Value Addition
• Increase trading of Ex-stock
To turn Threat to Opportunity
• Take advantage of IT to form chemical data-base for new opportunity.
• Try sourcing of RM from India & China
2.13.11 Key differentiating factors that attracts customers:
• Quality, price, timely delivery with clean documents
• Technical Assistance/Information to customers about int’l price
• Proactive involvement in customers purchasing decision
• Excellent relation with loyal customers
• Highly professional & customers caring sales people
2.13.12 Products, Customers & Supplier Base Up to 2005
Chemical Textile Leather Total
34

Total
Product
base
60 35 70 165
Total
customer
70 36 60 166
Total
supplier
29 4 2 35
2.13.13 Major Development through initiative in 2005
1) Re-start of Ex-stock sales of ExxonMobil Plastics
2) Increased customer & Product base through trials for Textile Auxiliaries
3) Introduction of C&TP from Stahl India
4) Appointed a Retailer for Stahl Leather Chemical sales
5) Irregularities caused by Sales Manager, Leather (Mr Mizan) mostly adjusted with
customer satisfaction
6) Sourcing PET from China
7) Sourcing API from India & China
8) Measurable & Comparable items Software development
9) Weekly sales Meeting with all SBU with EDT
10) Study on Textile Auxiliaries Market through Internee
Projects/Suppliers looked for
1) H2O2
2) Paints
3) Bulb & Tube Lights
4) Dry Cell Battery
5) Adhesive Tapes
6) Lady Napkin
2.13.14 Initiative to be taken in 2006
1. Value Addition – Textile Auxiliaries
2. ICI Paints India (J.V.)
3. Value Addition for Beam House Chemicals for leather
4. More trials of Text. & Leather Chemicals to increase customer & Product base
5. Dyes & Optical Brightener sourcing – India, China
6. Introduction more Traders for Textile Aux. credit sales
7. Recruit sales person for Chemical & Textile division
35

8. Implementation of Program for Measurable & Comparable items related to sales
performance
9. Engage two Internee for Chemical & Leather Market Study
10. Interaction with knowledgeable & experienced persons from Faculties and Trade
11. Aggressive Plan to become a big Trading House by 2008
Chapter-ThreeChapter-Three
Leather Industry of Bangladesh
3.0 Leather Industry Background3.0 Leather Industry Background
3.0.1The Leather Industry in3.0.1The Leather Industry in
BangladeshBangladesh
Tannery transforms raw hides and skins into leather for manufacturing articles like shoe-
upper, bag, suitcase, belt, wallet and jacket. In the past, leather processing was done
manually using certain indigenous chemicals.
3.0.2 The beginning of the Tannery
The first tannery in Bangladesh territory was set up at Narayanganj by RP Saha in the
1940s. It was later shifted to Hazaribag area of Dhaka, which turned into a location that
now accommodates a large number of tannery units. During the period before Partition of
36

Bengal (1947), almost all the raw hides and skins available in East Bengal were exported to
west Bengal, particularly to Calcutta and processed there. In fact the tannery industry of
Bangladesh originated after its relocation from Narayanganj to Hazaribagh in Dhaka in
1951. At that time there were 54 tanneries in the country and out of those 30 belonged to
the Pakistani owners. Development of tannery industry in East Pakistan started after the
Partition with an influx of tanners displaced from India and subsequently, with the
establishment of subsidiaries of some companies of West Pakistan. The tanning industry in
East Pakistan and export of leather from the province were mainly in the hands of the non-
Bengali people. A few tanning units, however, belonged to Bengali entrepreneurs but they
were small and of cottage type and they used to process leather mainly for the domestic
markets. Most non-Bengali tanners processed wet-blue and sent the product to West
Pakistan where it was further processed and finished for producing different consumer
goods. Till 1960, tanneries of East Pakistan used to process raw hides and skins applying
salt and then drying them in the sun and the material thus developed was known as shaltu.
3.0.3 Post Liberation Period3.0.3 Post Liberation Period
During the war of liberation in 1971 the non-Bengali tanners of Bangladesh left the country
abandoning about 30 tannery units owned by them. After the war, the new government of
Bangladesh vested the management of these units on a newly formed Tannery Corporation,
which was expected to convert them into finished leather manufacture units. Unfortunately,
the corporation did not serve the purpose because of lack of experience and other reasons
including corrupt practices. Later, the government relinquished the Tannery Corporation
and handed over the management of most of these tanneries to Bangladesh Chemical
Industries Corporation (BCIC). Three of them were given to Bangladesh freedom fighters
welfare trust. Both the authorities had miserably failed to manage the tanneries. In 1982,
the government transferred them to private entrepreneurs in pursuance of its general policy
of disinvestments, which had allowed some enterprising Bengalis with little or no
experience in the industry to start wet-blue production.
3.0.4 Present Condition
37

At present, the leather sector of Bangladesh has 220 processing units located at different
parts of the country (mainly in Dhaka) as follows: -
Dhaka (Hazaribag) - 194 units
Dhaka (Dhamrai/Savar) - 3 ”
Gazipur (Kaliakoir) - 1 ”
Jessore (Noapara) - 1 ”
Chittagong - 18 ”
Jamalpur - 1 ”
Rangpur - 1 ”
Khulna - 1 ”
Total : 220 units
Only about 50% of the above units are well equipped for processing crust and finished leather. But only 28 tanneries are in operation,
among them 20 are operating in crust section and 8 are in finishing section.
According to the records of the Bangladesh Tanners Association, about 3,000 workers are
employed in the tanning industry. Besides, there are about 100 qualified technologists
including foreign nationals who are working in different tanneries. Total capital invested in
the tannery industry is estimated at Tk 2.5 billion, of which government/bank finance is
about Tk 1.2 billion. About 1,500 persons are involved in the process of collecting raw
hides and skins and making them available at tannery units. About 100 organizations
import chemicals for use in tannery industry. Some reputed tanneries of Bangladesh are
Dhaka Leather, Apex Tannery, Lexco, Karim Leather, Samata Tannery and Bay Tannery.
38

Chapter-Four
Production
4.0 Leather Sector in the Economy of Bangladesh
The Leather sector plays a significant role in the economy of Bangladesh in terms of its
contribution to export and domestic market. Bangladesh currently produces about 20.0
million sq. meters of leather and leather goods per year. The total production of leather and
leather goods shows an increasing trend over the years. Beginning with the 1993/94, the
production increased from 14.60 in 1993/94 million sq. meters to 15.90 million sq. meters
in 1995/96. It fell to 11.95 million sq. meters in 1996/97. Since 1996/97, there has been a
steady increase in the production of leather and leather goods that reached 19.91 million sq.
meters in 2000/2001. The following table shows the production of leather and leather
goods in the country.
Leather sector is perceived to be one of the important economic sectors in Bangladesh. As
a single sector of the economy, the sector contributes modestly to the country’s GDP.
Contribution of leather sector (hide &skin, leather and leather goods, and footwear except
rubber) to GDP is 0.31 (at constant price) in FY 2003.
Table 4.1: Production of Leather & Leather Goods
39

Year Unit (Million Sq. Meter)
1993-94 14.60
1994-95 15.00
1995-96 15.90
1996-97 11.95
1997-98 12.12
1998-99 16.21
1999-2000 18.31
2000-2001 19.91
2001-2002 17.30
2003 22.85*
2004 20.78**
Source: Bangladesh Economic Survey, Ministry of Finance, 2002
*Leather Sector Census Study, LSBPC, 2005
**Approximate Data from LSBPC
The quantum index of leather and leather goods production increased to 131 in 1998/99
compared to the base year (1988/89=100) and that of leather footwear production rose to
193 for the same period. It is therefore evident that leather is increasingly being used in the
production of footwear. The following table shows the trend of production of leather and
leather footwear during the 1990/91 through 1998/99 period.
Table 4.2 : Quantum Index ofTable 4.2 : Quantum Index of
Leather and Leather Goods andLeather and Leather Goods and
Leather FootwearLeather Footwear
(Base: 1988/89=100)
Year
Production Index
Leather & Leather Goods Leather Footwear
1990-91 84.34 100.03
1991-92 92.97 100.07
1992-93 108.72 110.93
1993-94 123.44 139.48
1994-95 126.77 161.76
1995-96 133.85 174.46
1996-97 100.84 185.95
1997-98 102.25 123.17
1998-99 136.76 192.84
1999-00 154.41 186.71
40

2000-01 165.85 216.67
2001-02 146.37 229.47
Source: Statistical Year Book of Bangladesh 2002, Bangladesh Bureau of Statistics
Table- 4.3 : Yearly production of Leather Sector by Different
Enterprises/Firms
Firm Types Total Production
Wet blue (000 sqf.) 35060
Crust (000 sqf.) 66172
Finished (000 sqf.) 134820
Leather Footwear (000 pairs) 16766
Leather Goods (000 pcs.) 766
Note: Data for the period Jan.-Dec.2003.
Source: Leather Sector Census Study, LSBPC, 2005
Table 4.4: Leather Production of the renowned Tanneries of Bangladesh:
Name of the
Organization
Annual Production
(SFT/Month)
Product
Apex Tannery 1700,000
Crust, Printed Bag, Semi Aniline,
CG Glaze Kid
Bay Tannery 600,000
Crust, Resin Coat, Semi Aniline
CG, Lining, Brush Off,
SAF Industries 600,000
Crust, Semi Aniline CG, Glaze
Mild, Lining,
Bata Shoe co (BD) ltd 400,000
C/G, Box Sandle, Semi Aniline,
Creasy Horse, Lining
Bengal Leather Complex 500,000
Polishable Finish, Crust, Semi
Aniline,
Dhaka Hide & Skins 1400,000 Crust, Milled Bag, Repolisable, S/A
H&H /H.B Tannery 500,000
Crust, Glaze Kid, C/G, Resin Goat,
S/A, Lining
Phoenix Leather 400,000 Crust, CG, SA
Karim Leathers 500,000 Crust, SA
Lexco Ltd. 200,000 CG, SA
41

Samina Tannery 500,000 Crust, SA
Riff Leather 200,000 Crust, CG, SA
Modina Tannery 150,000 Crust, SA
Reliance Tannery 600,000 Re polish able, Crust,
B.S Leather 200,000 Re polish able, Crust,
Progoti Leather Complex 500,000 Crust
Vulua Tannery 600,000 Crust
Kalam Brothers 300,000 Crust
Amin Tannery 200,000 Crust
Anwer Tannery 200,000 Crust
Cottege Customer 1000,000 Crust, Repolishable, S/A
Total 11250,000 SFT/MONTH
Total Annual Production: 135,200,000 SFT/YearTotal Annual Production: 135,200,000 SFT/Year
Total Crust Production = 101,400,000 SFT/YearTotal Crust Production = 101,400,000 SFT/Year
Total Finish Production = 33,800,000 SFT/Year
Source: Shajedul Alam, Internship Report, June 19, 2004, Institute of Business Administration, University of
Dhaka;
Source: Magazine, Dhaka International Leather Fair 2005
Table 4.6: Number of Animal Population in Bangladesh (thousand head)
Types 1990 1995 1996 1997 1998 1999 2000 2001 2002 (est.)
Bovine
Animal
24016 24859 24433 24816 24220 24480 24730 24830 24830
Sheep and
Lambs
873 1070 1124 1158 1110 1121 1132 1143 1143
Goats and
Kids
21031 30330 33312 34478 33500 33800 34100 34400 34400
Source: FAO, 2003
42
247 Mio Sq.FtTotal:
63 Mio Sq.ftGoat & Sheep
184 Mio Sq.Ft.Cow & Buffalo
Table4.5: Availability of Raw Materials

Chapter-FiveChapter-Five
Leather ExportLeather Export
5.01 Leather Export Performance of Bangladesh: The ever highest export
performance was achieved in 2000-2001 due to the mad cow disease in EU but after 11th
September incident, the declining trend cannot be prevented due to the less value addition
capability and non-sustainable nature of the leather sector industry of Bangladesh. The
export performance of Bangladesh after 1999 is shown in table4.1. The Leather export is
almost 2.5 percent to the total export of Bangladesh. Table 4.2 shows how the percentage
of leather export to the total export is decreasing year after year.
43

Table 5.1: Export performance: From July 1999
Leather (Mn. US$) % Increase or Decrease
July 1999- June2000 246.89 -
July 2000- June2001 290.68 +17.76%
July 2001- June2002 252.49 -13.13%
July 2002- June2003 229.72 -9.01%
July 2003- June2004 211.41 -7.97%
July 2004- June2005 220.93 +4.50%
Export Target for
July 2005- June2006
235.00
Export Performance for
July 2004-Nov 2005
84.37 -
Export Performance for
July 2005-Nov 2006
96.21 +14.03%
Source: Export Promotion Bureau of Bangladesh.
0
50
100
150
200
250
300
Export
(Mn. US$)
1999-
2000
2000-
2001
2001-
2002
2002-
2003
2003-
2004
2004-
2005
Fig 5.1: Year Wise Leather Export of
Bangladesh
Table 5.2: Percentage of the Leather Export to the Total export of Bangladesh:
44

(Value in million dollar)
Year Total Export Leather, Leather
Footwear and Leather
Goods export
Leather, Leather
Footwear and Leather
Goods as % of Total
Export
1998-99 5312.86 219.39 4.39
1999-2000 5752.20 246.89 4.30
2000-2001 6467.30 290.68 4.50
2001-2002 5986.09 252.49 4.22
2002-2003 - 229.72 -
2003-2004 7602.99 211.41 2.78
2004-2005 8654.52 220.93 2.55
2005-2006 10159.20* 235.00* 2.31
Source: Export Promotion Bureau of Bangladesh (EPB) *Export Target
Hong Kong, Korea Rep., Italy, Japan are the main export destinations of the leather goods
of Bangladesh. Though the Leather export performance of Bangladesh is decreasing day by
day but still some countries like China, Taiwan, Vietnam are showing their interest to
import more leather goods from Bangladesh. In comparison to India and Pakistan the
export performance of Bangladesh shows a very uncomfortable figure. The main reason for
that is the infrastructure of the sector. Although the RMG sector of Bangladesh is booming
even after the post MFA era, foreign investors are not showing interests to invest in the
leather sector of Bangladesh. Even the local investors are not interested to invest in leather
sector, though there are lots of places Bangladeshi investors can invest easily.
Table 5.3: Country Wise Export of leather and Leather Goods during the period of
July2004 – March 2005:
Value in ‘000’ US$
Country Export Country Export Country Export
Argentina 5 India 1679 Saudi Arabia 2
Australia 279 Indonesia 153 Singapore 137
Austria 2 Italy 29791 S. Africa 243
45

Belgium 65 Japan 10723 Spain 5701
Benin 21 Korea DPR. 39 Sri Lanka 11
Brazil 745 Korea Rep. 20151 Taiwan 7953
Cambodia 426 Local Sale 540 Thailand 742
Canada 35 Mexico 1123 Turkey 8
China 6049 Myanmar 21 U.A.E 23
Czech Rep. 5 Netherlands 634 U.K 1059
East Timor 13 Norway 37 U.S.A 645
El Salvador 50 Oman 10 Ukraine 69
Finland 1 Pakistan 62 Uruguay 575
France 753 Philippines 166 Venezuela 40
Germany 189 Poland 3767 Vietnam 8681
Greece 26 Portugal 51
Hong Kong 54584 Qatar 6
Hungary 4 Samoa 5
TotalTotal 158621
Source: Foreign Trade Statistics of Bangladesh, 2001-2002
Table 5.4: Export of Leather, Leather Footwear and Leather GoodsTable 5.4: Export of Leather, Leather Footwear and Leather Goods
Million US$
Year Leather Leather Footwear Leather Goods Total
Export % of Total Export % of Total Export % of Total
1998-1999 168.25 76.69% 46.55 21.22% 4.59 2.09% 219.39
1999-2000 195.05 79.00% 48.26 19.55% 3.58 1.45% 246.89
2000-2001 253.93 87.36% 33.63 11.57% 3.12 1.07% 290.68
2001-2002 207.33 82.1% 41.29 16.4% 3.87 1.5% 252.49
2002-2003 191.23 83.2% 35.06 15.3% 3.43 1.5% 229.72
2003-2004 211.41 79.50% 50.86 19.13% 3.64 1.37% 265.91
Bangladesh Export Promotion Bureau
5.02 Sales and Exports of Leather sector Enterprises/Firms
Table show that during January-December 2003, the collective sales of the leather sector firms stood at Tk.23045 million. Of the total
sales of the firms, over 75 percent are sold outside the country. Leather processing units exported most of their products that accounted
for about 85 percent of their total sales revenue during 2003. Footwear manufacturing firms’ sales revenue from exports accounted for
about 40 percent of their total revenue. Leather goods manufacturing firms exported its entire volume of production during 2003.
Table 5.5 : Yearly Value of Sales and Exports by Types of Firms (Tk 000)
Firm Types Sales (Local) Exports Total Sales
Leather Processing 2847600 15622354 18429954
46

Leather Footwear 2456349 1682140 4138489
Leather Goods 0 437389 437389
Total 5303949 17741883 23005832
Table 5.6 : Yearly Value of Sales and Exports by Types of Firms (%)
Firm Types Sales (Local) Exports Total Sales
Leather Processing 15.42 84.58 100
Leather Footwear 59.35 40.65 100
Total 23.01 76.99 100
5.2.1 Sales and Exports: Leather Processing
Leather processing firms’ sales value stood at about Tk.18470 million during January-December, 2003 (Table 4.7). Exports revenue
accounted for about 88 percent from the crust leather and over 97 percent from the finished leather produced by the leather processing
enterprises. Except for an insignificant volume, most wet-blue leather is locally used for the production of crust/finished leather. The
survey data show that as a whole about 85 percent products of the leather processing firms are exported and total export value stood at
Tk. 15622 million (during January-December 2003).
Table5.7 : Annual Volume of Sales and Exports by the Leather Processing Firms
(in 000 sqf.)
Product
Category
Local Sales
Total
Local Sales
Total
Exports
Total Sales
Volume in sf.Direct
Through Agent
Wet Blue 35060 0 35060 0 35060
Crust 5281 3400 8681 57491 66172
Finished 4814 0 4814 130006 134820
Table 5.8: Yearly Sales and Exports by the Leather Processing Enterprises/Firms
(Tk000)
Local Sales Total Total
47

Products
category
Local Sales Exports
Total Sales
Volume (in
Tk. 000)
Direct
Through Agent
Wet Blue 1959300 0 1959300 0 1959300
Crust 318850 220000 538850 4141826 4680676
Finished 349450 0 349450 11440528 11789978
Total 2627600 220000 2847600 15622354 18429954
Table 5.9: Annual Value of Sales by the Leather Processing Enterprises/Firms
(%)
Products
category
Local Sales Total
Local Sales
Total
Exports
Total Sales
valueDirect Through Agent
Wet Blue 100.0 0 100.0 0 100
Crust 6.81 4.70 11.51 88.49 100
Finished 4.58 0 2.96 97.04 100
Total 18.36 1.54 15.42 84.58 100
5.2.2 Sales and Exports: Footwear
Still over 50 percent of the footwear manufacturing enterprises’ production is locally consumed. Total local sales stood at Tk.2456
million for the period January-December 2003. Export sales of the footwear firms for the period were Tk.1682 million.
Table 5.10: Yearly Sales and Exports by the Leather Footwear Enterprises/Firms
Local Sales Total
Local
Sales
Total
Exports
Total
SalesDirect Through
Agent
Volume (pair) 8435500 0 8435500 8309750 16745250
Value in Tk.’000 2456349 0 2456349 1682140 4138489
Table5.11: Annual Sales and Exports by the Leather Footwear Firms (%)
Local Sales
Total
Local Sales
Total
Exports
Total Sales
Direct Through
Agent
Volume (pair) 50.38 0 50.38 49.62 100
Value in Tk.’000 63.39 0 59.35 40.65 100
48

5.2.3 Sales and Exports: Leather Goods
All leather goods manufacturing firms (covered under census) are export oriented. Their total sales volume, which is same as their
exports, stood at Tk.437 million during the period January-December 2003.
Table5.12- Yearly Sales and Exports by the Leather Goods Enterprises
Local Sales
Total
Local Sales
Total
Exports
Total Sales
Direct Through
Agent
Volume (pcs) 0 0 0 764100 764100
Value in Tk.’000 0 0 0 437389 437389
Table 4.3 showed the country wise export figure of Bangladesh and the Table 4.13 shows
how country wise export figure changed during 2000-2003 to 2003-2004.
Table 5.13: Country wise changes in Export of Leather:
(Value in `000’ US$)
Countries
2002-2003 2003-2004
Value
% of Total Value % of Total
Hongkong 69039 36.10 72026 34.06
Italy 38621 20.20 43601 20.62
Koria Rep. 13736 7.18 19779 9.36
Japan 15029 7.86 15188 7.18
Taiwan 11556 6.04 11850 5.61
Vietnam 4928 2.58 11500 5.44
Spain 6821 3.57 9709 4.59
China 5932 3.10 7655 3.62
Mexico 2027 1.06 2160 1.02
UK 1507 0.79 1228 0.58
France 1779 0.93 1106 0.52
49

USA 983 0.51 631 0.30
Germany 818 0.43 549 0.26
Others 18450 9.65 14430 6.84
Total 191226 100.00 211412 100.00
Source: EPB Export Statistics
Table 5.14: Company wise Export of Leather Goods & Footwear from Bangladesh
(Export Period: 01/01/2005 ~ 24/11/2005)
50

Name of the Company Value in US$
Legacy Footwear Ltd. 5508573.5
Jennys Shoes Ltd. 3775499.81
Picard Bangladesh Ltd. 3130611.97
Leatherex Footwear Ltd. 1631819.61
H.N Shoes Ltd. 1054264.91
Cosmic Jute & Leather Ind. Ltd. 884406.75
Shampan Shoes Ltd. 771231.60
Savar Ind. Pvt. Ltd. 507352.22
Bangladesh Export Ltd. 432373.06
Landmark Footwear Ltd. 221137.63
Vannara Corporation Ltd. 219053.3
RMM Leather Ind. Ltd. 164923.28
Apex Leather Craft Fashion 149779.03
Bani Footex 131864.3
Bay Footwear 131660
Advanced Ind. Management Co. Ltd. 103890.61
Malim BD. Co. Ltd. 85356.65
MAMC 84174.50
Surma Leather & Footwear Ind. Ltd. 74735.5
Sonali Ansh Ind. Ltd. 68737.68
Apex Footwear Ltd. 63310
Legacy Footwear Ltd. 61119.88
Hara Leather 46843
Rexus Leather Club 40270
Crown Leather Products Ltd. 29219
Creative Products 27365
Anowara Leather 14520
Tropical Shoes Ltd. 7560
51

Source: Leather goods & Manufacturers & Exporters Association of Bangladesh.
Chapter-Six
Raw Materials
6.1 Raw Materials used by the Leather Firms
From the survey data it is transpires that raw materials used by the leather sector firms are procured mainly from local market. Except for
an insignificant proportion, almost all raw materials of wet blue i.e. raw hides are collected from the local sources. Raw materials for
crust leather and finished leather are wet-blue and crust respectively. About 99 percent of the raw materials of wet blue, crust and
finished leather are sourced locally. Of the broad categories of leather firms, footwear sector used highest proportion of raw materials
(includes finished leather, lining leather sole, etc.) from external sources, which is 3.13 percent of the total used by the sector.
52

Table 6.1 -: Yearly Raw Materials used in the Leather Sector to produce different types of
product (in Tk.000)
Types of Product
Name of Raw
materials
Local Foreign Total
Wet blue Raw hides 1276262 5040 1281302
Crust Wet blue 2756629 41300 2786474
Finished Crust 7428519 34000 7462519
Footwear
Finished, lining
leather, Sole etc.
1146399 38236 1184635
Leather Goods
Finished & lining
leather
90466 0 90466
Table 6.2 -: Yearly Raw Materials used in the Leather sector by types (%)
Types Name of Raw materials Local Foreign Total
Wet blue Raw hides 99.60 0.40 100
Crust Wet blue 98.93 1.07 100
Finished Crust 99.54 0.46 100
Footwear
Finished, lining leather,
Sole etc.
96.77 3.23 100
Leather Goods Finished & lining leather 100 0 100
6.2 Raw Materials: Leather Processing
Leather processing units or tanneries produce wet-blue, crust, and finished leather. In producing wet-blue and crust, the firms use raw
hides and wet-blue as raw materials respectively. Crust leather is used as raw materials for producing finished leather.
6.2.1 Raw Materials for Wet Blue
53

Raw hides used for producing wet-blue are mainly procured from local sources. Locally,
raw hides are collected mainly from leather depot located at Dhaka, Chittagong, Comilla,
Kustia, Natore and Rangpur. Only an insignificant volume of camel hide is imported from
external sources. South Africa was the only source of camel hide imports in 2003.
Table 6.3 : Yearly Raw Materials used for Producing Wet Blue
Hide and Skin
Local Foreign Total
Quantity
(000pcs)
Value in
Tk.000
Quantity
(pcs)
Value in
Tk.000
Quantity
(000pcs)
Total Value
Tk.000
Cow 856 1074032 0 0 856 1074032
Buffalo 107 88835 0 0 107 88835
Goat 1035 97495 0 0 1035 97495
Sheep 115 12034 0 0 115 12034
Cow/Buffalo head 41 3866 0 0 41 3866
Camel 0 0 4 5040 4 5040
Total 2154 1276262 4 5040 2158 1281302
Table 6.4 : Yearly Raw Materials used for Producing Wet Blue (%)
Raw materials for
Wet blue
Local Value
(%)
Foreign Value
(%)
Total Value
(%)
Cow 100 0 100
Buffalo 100 0 100
Goat 100 0 100
Sheep 100 0 100
Cow/Buffalo head 100 0 100
Camel 0 100 100
Total 99.60 0.40 100
54

6.2.2 Raw Materials for Crust
Wet blue, raw materials for producing crust is mainly collected from local sources
particularly from Dhaka. A small quantity of wet-blue to prepare crust leather is collected
from Chttagong and Jessor. Very insignificant volume of raw materials is imported. In
2003, only about 1.5 percent of total raw materials (wet blue cow and camel) was imported
from South Africa, Australia, and Brazil .
Table 6.5 : Yearly Raw Materials used for Producing Crust Leather
Raw
materials for
crust
Local Foreign Total
Quantity
(000sqf)
Value in
Tk.000
Quantity
(000 sqf)
Value in
Tk.000
Quantity
(000sqf)
Total Value
Tk.000
Cow 23358 1524583 530 33300 23888 1557884
Buffalo 11210 447936 0 0 11210 444480
Goat 11016 603330 0 0 11016 603330
Sheep 1848 161580 0 0 1848 161580
Others 240 19200 0 0 240 19200
Camel 0 0 100 8000 100 8000
Total 47672 2756629 630 41300 48302 2786474
Table 6.6: Yearly Raw Materials used for Producing Crust (%)
Raw materials for
crust
Local Value
(%)
Foreign Value
(%)
Total Value
(%)
Cow 97.86 2.14 100
Buffalo 100 0 100
Goat 100 0 100
Sheep 100 0 100
Others 100 0 100
55

Camel 0 100 100
Total 98.52 1.48 100
6.2.3 Raw Materials for Finished Leather
Crust leather used for producing finished leather is also collected mainly from local
sources. Only a very insignificant volume of cow crust is imported to produce finished
leather. In 2003, cow crust was imported from Australia valued Tk.34 million.
56

Table 6.7 : Yearly Raw Materials used for Producing Finished Leather
Raw materials for
finished
Local Foreign Total
Quantity
(000sqf)
Value in
Tk.000
Quantity
(000 sqf)
Value in
Tk.000
Quantity
(000sqf)
Total Value
Tk.000
Cow Crust 55488 4396440 400 34000 55888 4396840
Buffalo Crust 8822 494124 0 0 8822 494124
Goat Crust 23019 1979055 0 0 23019 1979055
Sheep Crust 5412 558900 0 0 5412 558900
Total 92741 7428519 400 34000 93141 7462519
Table 6.8 : Yearly Raw Materials used for Finished Leather (%)
Raw materials
for finished
Local Value
(%)
Foreign Value
(%)
Total Value
(%)
Cow Crust 99.23 0.77 100
Buffalo Crust 100 100 100
Goat Crust 100 100 100
Sheep Crust 100 0 100
Total 99.55 0.45 100
6.2.4 Raw Materials: Footwear
Other than finished leather, some other raw materials as lining leather, artificial sole,
insole-leather etc. are used in producing footwear by the footwear-manufacturing firms.
Footwear manufacturing units imports comparatively greater volume of raw materials (as
compared to leather processing and leather footwear sector) from external sources.
Footwear manufacturing units imported over 3 percent of their total raw materials
amounted to about Tk. 38 million during January to December 2003. Sources for local raw
materials are mainly Dhaka and Chittagong. Of the external sources, finished leather is
mainly collected from Pakistan and China. Artificial sole is imported mainly from India,
Indonesia, China and Taiwan, and lining leather is collected mainly from China, Taiwan
57

and Pakistan. China, India and Italy are the major sources of in-sole leather. Some
footwear raw materials are also imported from Canada, France and Germany.
Table 6.9: Yearly Raw Materials used for Producing Footwear
Name of raw
materials for
footwear
Local Foreign Total
Quantity sqf.
000
Value in Tk.
000
Quantity
sqf. 000
Value
in Tk. 000
Total
quantity
Total value
Tk. 000
Finished Leather 9932 823434 225 25350 10157 848784
Lining Leather 2944 134023 506 8960 3450 142983
Artificial Sole 1806 155317 855 3266 2661 158583
In-sole Leather 639 33063 45 660 684 33723
Others 7 562 0 0 7 562
Total 15328 1146399 1631 38236 16959 1184635
Table6.10 : Raw Materials used for Footwear (%)
Raw materials for
Footwear
Local Value
(%)
Foreign Value
(%)
Total Value
(%)
Finished Leather 97.01 2.99 100
Lining Leather 93.73 6.27 100
Artificial Sole 97.94 2.06 100
In-sole Leather 98.04 1.96 100
Others 100 0 100
Total 96.77 3.23 100
6.2.5 Raw Materials: Leather Goods
The leather goods producing firms that are very few in number use basically finished leather and lining leather as raw materials. The
value of the raw materials used by the leather goods manufacturing units constitute less than 8 percent of the raw materials used by the
footwear manufacturing units. All of the raw materials of the leather goods manufacturing firms are collected from local sources.
Table 6.11: Yearly Raw Materials used for Producing Leather Goods
58

Raw materials
for crust
Local Foreign Total
Quantity
(000sqf)
Value in
Tk.000
Quantity
(000 sqf)
Value in
Tk.000
Quantity
(000sqf)
Total Value
Tk.000
Finished
Leather
1365 87366 0 0 1365 87366
Lining Leather 50 3100 0 0 50 3100
Total 1415 90466 0 0 1415 90466
6.3 Availability of raw material in Bangladesh
Table 6.12
Total Number
(Head)
Hides & Skins
(piece)
Hides & Skins
(Sq.ft)
Cow/Buffalo/Calf 24.31 million 5.31 million 116.00 million
Goat/Sheep 32.70 million 19.70 million 64.00 million
Source: 1. Bureau of Statistics 2. Livestock Census 3. ITC 4. FAO
Table6.13 Availability of raw material (Division wise) (Piece)
Dhaka Chittagong Rajshahi Khulna Total
Cow/Buffalo/Cal
f
13,78,700 12,60,500 15,90,800 10,72,700 53,02,700
Goat/Sheep 39,40,000 43,37,000 55,16,000 59,07,000 1,97,00,000
Source: 1. Bureau of Statistics 2. Livestock Census 3. ITC 4. FAO
59

Chapter-Seven
SWOT Analysis
7.1 Strengths
7.1.1 Strengths of the Firms: Leather Processing
The SWOT analysis is based on the opinions of the leather sector firms. The survey reveals
that ‘higher productive capacity’ is the main strength of the maximum number of firms of
the leather processing industry. Main strengths of the leather processing industry as
identified by the leather processing firms in the survey are as follows:
Table 7.1: Strengths of the Leather Processing Firm
Strengths Percent of Total Firms
Production capacity 70%
Competitive price 67%
Cheap Labour 66%
Market Information 56%
Better management 54%
60

Strengths: Leather Processing
0
10
20
30
40
50
60
70
80
Production
capacity
Competitive price Cheap Labour Market
Information
Better
management
Major Strengths
%ofTotalFirms
Figure: 7.1 Strengths of the Leather Processing Firms
With high installed capacity and better utilization of that capacity, firms can economize on the costs
and offer competitive price. It is recognized that the element of competitive price is related to
productivity and cost of production. Hence firms with better productive capacity can offer better
price to their clients. Generally, productivity of the big firms is expected to be higher than that of
smaller firms with low productive capacity. Availability of cheap labour is another common
advantage in the leather processing. This sector is relatively more labour-intensive than other two
sectors (footwear and leather goods).
7.1.2 Strengths of the Firms: Leather Footwear
As is leather-processing industry, ‘higher productive capacity’ is the main strength of the maximum
number of firms operating in the footwear industry. The major strengths of the firms as identified in
the survey (as opined by the firms) are as follows:
Table 7.2: Strengths of the Leather Footwear Firm
61

Production capacity 74%
Better quality of management 66%
Sufficient supply of processed leather 65%
Trained manpower 60%
Quality Control 58%
Strengths: Footwear
0
20
40
60
80
Production
capacity
Better
management
Supply of
processed leather
Trained
manpower
Quality Control
Major Strengths
%ofTotalFirms
Figure: 7.2 Strengths of the Leather Footwear Manufacturers
Footwear firms appear to have emphasis on the quality of management of the firms. Adequate
supply of processed leather (from the leather processing firms) is the third most important factors
that determine the strength of the footwear firms. Quality control appears to have provided
competitive advantages to a good number of firms.
7.1.3 Strengths of the Firms: Leather Goods
Better management quality, and quality control came up as the main strengths of the leather goods
producing firms. A list of major strengths of the footwear manufacturing firms as identified in the
survey (as opined by the firms) are presented in table 7.3.
Table 7.3: Strengths of the Leather Goods Firm
62

Better management Quality 71%
Quality control 69%
Sound environmental management 64%
Market information 60%
Production Capacity 48%
Strengths: Leather Goods
0
10
20
30
40
50
60
70
80
Better management Quality control Environmental
management
Market information Production Capacity
Major Strengths
%ofTotalFirms
Figure: 7.3 Strengths of the Leather Goods Manufacturers
As in case of footwear, leather goods manufacturing firms also appear to put considerable emphasis
on better management quality and quality control. Environmental management and market
information have also been identified by considerable percentages of firms as may be expected
from a hundred percent export oriented industry.
7.2 Weaknesses
7.2.1 Weaknesses of the Firms: Leather Processing
63

Size of the firms and financial crisis are found to be the main weaknesses of the firms operating in
the leather processing industry. The major weaknesses of the firms as identified in the survey (as
opined by the firms) are as follows:
Table 7.4: Weaknesses of the Leather Processing Firm
Weaknesses Percent of Total Firms
Low Volume of Production 82%
Financial Crisis 80%
Weak Marketing 64%
Inefficient Management 46%
Weaknesses: Leather Processing
0
20
40
60
80
100
Low Volume of
Production
Financial Crisis Weak Marketing Inefficient Management
Major Weaknesses
%ofTotalFirms
Figure: 7.4 Weaknesses of the Leather Processing Firms
In global context the smaller leather processing firms produce lower quantity that precludes them in
attaining economies of scale. Generally, leather-processing firms face financial difficulty and have
no marketing strategy. Of the leather processing firms, 46 percent identified inefficient
management as one of their main weaknesses.
7.2.2 Weaknesses of the Firms: Leather Footwear
64

‘Financial Crisis’ is found to be the main weakness of the leather footwear industry. The major
weaknesses of the footwear firms as identified in the survey (as opined by the firms) are as follows:
Table 7.5: Weaknesses of the Footwear Firm
Weak Marketing 86%
Uncompetitive Product Price 80%
Weaknesses: Leather Footwear
70
75
80
85
90
95
Financial Crisis Weak Marketing Low Volume of
Production
Uncompetitive
Product Price
Major Weaknesses
%ofTotalFirms
Figure: 7.5 Weaknesses of the Leather Footwear Manufacturers
Generally, footwear firms face financial difficulty and lack effective marketing strategy. Size of the
firms in global context is smaller which is a notable obstacle in achieving economies of scale and
offering competitive price.
7.2.3 Weaknesses of the Firms: Leather Goods
In line with leather footwear, ‘financial Crisis’ is found to be the main weakness of the leather goods manufacturing industry. The major
weaknesses of the leather goods firms as identified in the survey (as opined by the firms) are as follows:
Table 7.6: Weaknesses of the Leather Goods Manufacturing Firm
65

Weak Marketing 87%
Uncompetitive Product Price 74%
Weaknesses: Leather Goods
65
70
75
80
85
90
Financial Crisis Weak Marketing Low Volume Uncompetitive Price
Major Weaknesses
%ofTotalFirms
Figure: 7.6 Weaknesses of the Leather Goods Manufacturers
About 90 percent leather-goods manufacturing firms have identified ‘financial difficulty’ as their
one of the major weakness. The firms also lack effective marketing strategy. Size of the leather
goods firms in global context is smaller which is a notable obstacle in achieving economies of scale
and offering competitive price.
7.3 Opportunities
7.3.1 Opportunities of the Firms: Leather Processing
‘Cheap Supply of Labour’ is found to be the main aspect the opportunities the leather processing firms enjoy. The major aspects of
opportunities of the leather processing firms as identified in the survey (as opined by the firms) are as follows:
Table 7.7: Opportunities of the Leather Processing Industry
Opportunities Percent of Total Firms
Cheap Supply of Labour 82%
Sufficient Supply of Hide and Skin 64%
66

Stable Global Demand 62%
Favourable Business Environment 60%
Conducive Industrial Policy 58%
Opportunities: Leather Processing
0
20
40
60
80
100
Cheap
Supplyof
Labour
Sufficient
Supplyof
Hides
Stable
Global
Demand
Favourable
Environment
Conducive
Industrial
Policy
Major Aspects
%ofTotalFirms
Figure: 7.7 Opportunities of the Leather Processing Firms
It is obvious that availability of cheap labour can provide considerable cost advantage to
the firms of a particular area/location. Leather Processing firms located in Bangladesh have
been availing the opportunity. Supply of raw materials, global demand of the footwear, and
business environment are also found to be positive from the firms’ point of view.
7.3.2 Opportunities of the Firms: Leather Footwear
‘Stable glocal demand’ is found to be the main aspect of the opportunities the footwear firms
currently have. The major aspects of opportunities of the footwear firms as identified in the survey
(as opined by the firms) are as follows:
Table 7.8: Opportunities of the Footwear Industry
Stable Global Demand
60%
Conducive Industrial Policy 58%
67

Duty Free Access in Major Markets 51%
Opportunities: Footwear
45
50
55
60
65
Stable Global
Demand
Conducive
Industrial Policy
Favourable
Environment
Cheap Supply of
Labour
Access in Major
Markets
Major Aspects
%ofTotalFirms
Figure: 7.8 Opportunities of the Leather Footwear Manufacturers
The footwear firms found the current stable global demand condition for the Bangladeshi
footwear is a major aspect of opportunity on the way towards expanding export markets for
footwear. The industrial policy and business environment are found to be positive for them
and availability of cheap labour is an added advantage.
7.3.3 Opportunities of the Firms: Leather Goods
The ‘Industrial Policy’ is found to be positive for the leather goods manufacturing firms. The
major aspects of opportunities of the leather-goods firms as identified in the survey (as opined by
the firms) are as follows:
Table 7.9: Opportunities of the Leather Goods Industry
Conducive Industrial Policy
66%
Stable Global Demand 58%
68

Duty Free Access in Major Markets 51%
Opportunities: Leather Goods
0
20
40
60
80
Conducive
Industrial Policy
Favourable
Environment
Cheap Supply
of Labour
Stable Global
Demand
Access in Major
Markets
Major Aspects
%ofTotalFirms
Figure: 7.9 Opportunities of the Leather Goods Manufacturers
The industrial policy and business environment, and cheap supply of labour are found to be
advantageous for the leather goods manufacturing industry, as opined by most firms of the
industry. Current global demand condition appeared to be favourable for these firms.
7.4 Threats
7.4.1 Threats to the Firms: Leather Processing
‘Disruption of electricity’ is found to be the main aspect of threat to the leather processing firms of
Bangladesh. The major aspects of threats of the leather processing firms as identified in the survey
(as opined by the firms) are as follows:
Table 7.10: Threats for the Leather Processing Industry
Threats Percent of Total Firms
Disruption of Electricity
74%
Hartals, strike, and other disturbances 72%
Unstable Policy Environment 68%
External Competition 64%
Lack of Trained Labour 62%
69

Environment consciousness in Importing Countries 60%
Shortage of Water Supply 58%
Threats: Leather Processing
55
60
65
70
75
Disruption of
Electricity
Hartals, strike,
and other
disturbances
Unstable Policy
Environment
External
Competition
Lack of Trained
Labour
Major Aspects
%ofTotalFirms
Figure: 7.10 Threats of the Leather Processing Firms
Practically, ‘disruption of electricity’ and ‘hartal strike etc.’ are very common aspects of
threats facing by the industry sector of the country in general. Inadequate infrastructural
facilities like insufficient supply of electricity and shortage of water supply affect optimum
capacity utilization, volume of production, and destroy cost advantage. Such problem is
particularly threatening in an atmosphere of growing global competition. Moreover,
environment consciousness in importing countries mainly in the developed world is the
cause of concern for the exporting countries like Bangladesh where environmental issues
are not strongly addressed both in firm and policy level. Moreover, Firms also do not get
sufficient trained people.
7.4.2 Threats to the Firms: Leather Footwear
As in leather processing sector, ‘disruption of electricity’ is found to be the main aspect of threat to
the footwear firms of Bangladesh. The major aspects of threats of the footwear firms as identified
in the survey (as opined by the firms) are as follows:
70

Table 7.11: Threats for the Footwear Industry
74%
Hartals, strike, and other disturbances 68%
Shortage of Water Supply 58%
Threats: Footwear
0
10
20
30
40
50
60
70
80
Disruptionof
Electricity
Hartals,strike
etc
External
Competition
Environment
consciousness
Shortageof
WaterSupply
Major Aspects
%ofTotalFirms
Figure: 7.11 Threats of the Leather Footwear Manufacturers
Inadequate infrastructure facilities like insufficient supply of electricity and shortage of
water supply are among the major causes of concern for the footwear firms. Growing
external competition and environment consciousness in the importing countries may affect
the export market of the footwear firms in coming days.
7.4.3 Threats to the Firms: Leather Goods
71

In line with the leather processing and footwear sectors, ‘disruption of electricity’ is found to be the main aspect of threat to the leather
goods manufacturing firms of Bangladesh. The major aspects of threats of the leather goods manufacturing firms as identified in the
survey (as opined by the firms) are as follows:
Table 7.12: Threats for the Footwear Industry
74%
Lack of Trained Labour 64%
Hartals, strike, and other disturbances
60%
Threats: Leather Goods
0
20
40
60
80
Disruptionof
Electricity
Lackof
Trained
Labour
External
Competition
Hartals,
strikeetc
Environment
consciousne
ss
Major Aspects
%ofTotalFirms
Figure: 7.12 Threats of the Leather Goods Manufacturers
Other than inadequate supply of electricity, leather goods manufacturing firms face lack of trained
labour force to be employed. Growing external competition and environment consciousness in the
importing countries may affect the hundred percent export-oriented leather goods sector of the
country in near future.
Chapter-Eight
Production Stages
8.1 Production Stages in Leather Processing Industry
72
Finished
Crust Leather
(Natural /dyed)
Sorting
Buffing &
Dedusting
Impregnation
&
Drying
Hydraulic Pressing
Rebuffing &
Dedusting
Color Coating (By
pad/spray Roller
coater)
Drying
Ironing/Embossing
Color Coating (By
Sprayer & drying)
Plating/Glazing
Finished
Wet Blue
Raw/wet salted
Hides & Skins
(Sorted & Trimmed)
Raw/Salted
Weighing
Washing &
Soaking (in drum/
paddle/pit)
Liming (In drum/
/paddle/pit)
Fleshing
Pelt Weighing
Deliming
(in drum)
Bating (in drum)
Pickling (in drum)
Tanning (in drum)
Wet Blue
Scudding
Crust
Wet blue Leather
Splitting
Shaving
Shaved weighing
Neutralization
Retaining/
Dyeing
Fat liquoring
(in drum)
Setting
Drying (Vacuum/
Tunnel/Natural)
Conditioning (By
sawdust/ water)
Staking
Toggle Drying
Trimming
Crust
Samming

8.2 Production Stages in Footwear and Leather Goods Industries
Designing
Pattern Making
Designing of Footwear
Footwear Leather Goods
Designing
Pattern Making of Leather Goods
Cutting
1. Selection of Leather/Materials
2. Cutting
3. Splitting
4. Skiving
Cutting
1. Selection of Leather/Materials
2. Cutting
3. Splitting
4. Skiving
Closing
1. Embossing/ Printing
2. Adhesive
3. Folding
4. Strap cutting
5. Stitching
Closing
1. Embossing/ Printing
2. Adhesive
3. Folding
4. Strap cutting
5. Stitching
Finishing
Total Finishing Work
Finishing
Total Finishing Work
Footwear Leather Goods
74

8.3 Description of the various Stages of Leather Processing:
8.3.1Wet-Blue Section:
Name of operation Objectives Generic names of
chemicals
Chemicals Required
Curing/
Preservation
Dehydration
Soaking Restore Moisture to original
condition
Soaking
Preservatives
/ Enzymes
Sodium sulfide, sodium
hydroxide, sodium tetra
sulfide Decaltal types,
formic acid, bi sulfite
solution, sodium bi sulfite.
Liming and
Unhairing
Removing the hair and
opening up of fibre structure
for tannage
Liming Auxiliaries Sodium sulfide, Sodium
hydrosulfide. Hydrated
lime powder (calcium
hydroxide). Seldom slaked
lime (lime paste). Sodium
chlorite
Washing after
liming
Cleaning for fleshing and
start delime by thorough
washing
Fleshing Removing fat and surplus
flesh to give a Cleaner
surface for better penetration
of the subsequent chemicals
Deliming Replacing strong alkali,
Reducing Swelling
Deliming agents Hydrochloric acid, Sulfuric
acid, Formic acid, acetic
acid, Lactic acid, Boric
acid, Ammonium chloride,
Sodium meta by sulphate
Bating Producing a smooth, clean
grain by enzyme action,
removing unwanted proteins
Bating Agents Enzymes, wood flour as
carrier substance,
ammonium salts,
neutral salts as buffering
and deliming agents
Pickling Prepaing pelt for chrome
tanning by acidification
Pickling Agents Formic Acid
75

chemicals
Chemicals Required
Chrome Tanning Making Leather resistant to
purification, Increasing
Thermal Stability
Tanning Agents Chrome Tanning Agents,
(chromium(III) salt, ca.
25 % Cr2O3, ca. 33 %
basicity), Aluminium tanning
agent( ca. 16 % Al2O3, ca. 50
% basicity.) Combination of
Al and Cr ( Ca. 14 % Al2O3,
ca. 3.0 % Cr2O3; ca. 20 %
basicity.)
Other agents: Chromium
(acelate, Sulphate, chloride)
potassium dichromate etc.
Sammying To remove the unbound water
so that the hide can be split or
shaved with an even or
consistent moisture content
Splitting To reduce thickness and
separate splitting part
Shaving The final adjustment for
thickness
& Pocket Handbook of Leather Technology, 2004, BASF
8.3.2 Crust Section:
chemicals
Chemicals Required
Neutralization Preparing Tanned leather for
retannage
Neutralizing Agents Sodium Carbonate, Borax
Sodium Bicarbonate,
Ammonium Bicarbonate,
Sodium (Sulphite,
Thiosulphate, acetate,
formate), Calcium Formate
etc.
Retanning Using suitable chemicals for
the final product requirement
Retanning Agents Phenol, Nepthalane, B-
Napthole, Aromatic Ether
Dyeing To impart requisite colour on
leather
Dyes
Fat liquoring To soften the leather Fat Liquoring Agents Untreated oils, fats and
waxes Emulsified oils and
fats Chlorinated oils and
fats Sulfonated oils, fats
and fatty alcohols,
Oxidation products of oils
and fats
76

chemicals
Chemicals Required
Setting Out Removing wrinkles as much
as possible and mechanically
held water before drying
Drying Removal of water without
damaging Leather quality
Conditioning Controlled addition of
moisture
Staking/Vibration Soften by separating the
fibres
Toggle Drying Complete the drying under
streching condition
Trimming Removal of irregular edges,
damaged portion
8.3.3 Finishing Section:
Name of operation Objectives
Sorting To examine Quality and select different grades for
end products
Buffing Up gradation of lower grade leather through
shaping/ buffing of grain surface
Finishing Producing the finished film
a. Ground Coat Providing suitable base for better adhesion and
makes the leather surface smooth, uniform and
impermeable
b. Season Coat Covering the major proportion of the film thickness and
getting skewed between ground and top layer, Sealing
from both sides by impermeable ground and top layer
c. Top Coat Providing required degree of gloss, feel handle and
final appearance of the finished leather
Pressing Providing smooth or embossed/ printed surface with
ironing/ plating
Milling Mechanically softenning of the semifinised leather
Final Gradation Examine quality and allocate each finished piece of
grade
Measuring
& Pocket Handbook of Leather Technology, 2004, BASF
77

Chapter-Nine
LEATHER CHEMICALS & ACCESSORIES
(Data Collected from Secondary Survey)
9.0 Chemicals and Accessories: Leather Sector
A number of chemicals are used in the leather processing, footwear manufacturing and leather goods manufacturing units most of
which are foreign chemicals. In terms of value, above 87 percent chemicals used by the leather sector firms are of foreign origin.
Above 95percent (of the total value) of the chemicals used in the productions of crust and finished leather are foreign. Over 70percent
(of the total value) of the chemicals used by the footwear manufacturing are foreign made. Data collected from the secondary sources
show that leather goods manufacturing units depend mainly on local chemicals (Table *.2).
Table 9.1: Yearly value of Chemicals used by the Leather Sector Firms (by sources)
Production type
Local
Value in Tk.000
Foreign
Value in Tk.000
Total, Value
in Tk.000
Wet-Blue 20,685 63,938 84,623
Crust Leather 2322 116720 119042
Finished Leather 1679 44791 46469
Footwear 12660 42609 55269
Total 38982 268076 307058
Table 9.2: Distribution of Chemicals used by the firms of the Leather Sector (%)
Production
type
Local Value Foreign Value
Total Value
Wet-Blue 24.44 75.56 100
78

Crust Leather 1.95 98.05 100
Finished
Leather
3.61 96.39 100
Footwear 29.70 70.30 100
Leather Goods 90.0 10.0 100
Total 19.20 80.80 100
Table 9.3: Yearly Value of Accessories used by the Footwear and Leather Goods
Manufacturing Units (by sources)
Types of
Production
Local Foreign
Total
Value in
Tk.000
Value %
of Total
Value in
Tk.000
Value%
of Total
Value in
Tk.000
Value%
of Total
Footwear 73961 80.76 17616 19.24 91577 100
Leather Goods 237 27.40 628 72.60
865 100
Total 74198 80.30 18244 19.70 92442 100
Most accessories used by the footwear and leather goods manufacturing enterprises are
locally made. As a whole, about 20 percent of the accessories used in the production of
footwear and leather goods are foreign made. About 81 percent (of the total value)
accessories used by the footwear-manufacturing units are local accessories.
9.1 Chemicals: Leather Processing
9.1.1 Leather Processing: Wet-Blue
Secondary data show that over 75 percent (of total value) of the chemicals used for the production of wet-blue by the tanneries are
foreign-made. There are chemicals that are supplied by both local and foreign sources like sodium chloride, sodium carbonate,
ammonium sulphate, sulphuric Acid, Bating Agent etc. However, some chemicals like enzymatic soaking agent, sodium formate,
masking agent etc. are exclusively supplied from external sources (Table 9.4). In 2003, major suppliers of the chemicals were
Germany, China, Italy and UK .
Table 9.4: Yearly Value of Chemicals used for the Production of Wet-Blue
Name of
Chemicals
Local Foreign Total
Quantity
(MT)
(Value in
Tk.000)
Quantity
(MT)
(Value in
Tk.000)
Quantity
(MT)
(Value in
Tk.000)
79

Sodium chloride 1630.84 13,642 4 86 1634.84 13,728
Soaking Agent 72.835 2,770 17.8 1,021 90.135 3,791
Enzymatic Soaking
Agent
- - 15.54 2,359 15.54 2,359
Sodium Sulphide - - 228.65 4,880 228.65 4,880
Lime Auxiliaries 16.8 690 72.015 6,509 87.715 7,199
Bactericide - - 13.825 482 13.825 482
Ammonium
Chloride
1 - 46.745 1,149 47.745 1,149
Sodium Carbonate 0.55 161 44.17 984 44.72 1,145
Oxalic Acid - - 14.18 658 14.18 658
Sodium Formate - - 48.23 1,387 48.23 1,387
Magnesium Oxide - - 27.915 3,926 27.915 3,926
Ammonium
Sulphate/Dolomite
138 1,518 18.86 534 156.86 2,053
Bating Agent 13.13 181 53.59 3,343 62.02 3,524
Sulphuric Acid 74.46 1,342 8.41 301 82.87 1,643
Formic Acid 5.77 168 73.55 4,123 78.55 4,291
Basic Chrome
powder
2.1 89 512.92 24,572 513.02 24,661
Sodium
Bicarbonate
0.65 11 54.12 1,789 54.77 1,799
Masking Agent - - 6.96 1,129 6.96 1,129
Preservative 0.125 113 6.96 4,706 6.79 4,819
Total 1956.26 20,685 1274.47 63,938 3202.38 84,623
9.1.2 Leather Processing: Crust Leather
As the survey data show over 98 percent of the chemicals used for the production of crust
leather (from wet-blue) are foreign made. Other than a few chemicals like basic chroming
sulphat, phenolic syntan etc. generally chemicals have both local and foreign suppliers.
However, very insignificant volumes of local chemicals are used as compared to the
foreign chemicals. Foreign chemicals used are mainly made in Germany, UK, Holland,
and Italy .
80

Table 9.5: Yearly Value of Chemicals used for the Production of Crust Leather
Name of
Chemicals
Local Foreign Total
Quantity
(MT)
(Value in
Tk.000)
Quantity
(MT)
(Value in
Tk.000)
Quantity
(MT)
(Value in
Tk.000)
Basic Chroming
Sulphate
- 0 79.46 3564 79.46 3564
Sodium Formate 0.75 21 47 1233 47.75 1254
Na-EDTA 1 94 2.36 217 3.36 311
Acrylic syntan 2 176 83.28 9022 85.28 9198
Phenolic syntan - 0 57.50 7891 57.50 7890
Melamine /Urea
syntan
2 212 72.16 8601 74.16 8813
Replacement
syntan
1.8 225 82.97 9222 84.77 9447
Vegetable extracts 2.5 188 130.89 8742 133.39 8930
Dyestuffs 1.4 770 54.22 31506 55.52 32275
Fat Liquors 3.5 473 196 26408 199.5 26880
Formic Acid/Acetic
acid
1 51 58.54 31667 59.54 3217
Dye Auxiliaries - 0 12.69 2559 12.69 2559
Preservative 0.13 113 5.1 3633 5.23 3745
Aldhyde Tannin - 0 3.68 956 3.68 956
Total 16.07 2322 885.86 116720 901.84 119041
9.1.3 Leather Processing: Finished Leather
Over 95 percent (of the total value) of the chemicals used in the production of finished leather (from crust) are foreign-made. Except
for a few, almost all chemicals have domestic suppliers, however, uses of local-made chemicals are very limited. Most of the
chemicals used to produce finished leather are made mainly in Germany, Italy, UK, and Holland.
Table 9.6: Yearly Value of Chemicals used for the Production of Finished Leather
Name of
Chemicals
Local Foreign Total
Quantity
(MT)
(Value in
Tk.000)
Quantity
(MT)
(Value in
Tk.000)
Quantity
(MT)
(Value in
Tk.000)
81

Acrylic binder 0.75 37 10.33 3296 11.08 3334
Butadyne binder 0.8 40 1.75 495 2.55 535
Protein Binder 0.8 50 14.83 3867 15.63 3917
Wax emulsion 0.3 81 7.97 3081 8.27 3162
Penetretor 0.17 15 14.34 3958 14.51 3973
Nitrocellulose
binder
4.16 1172 13.29 4712 17.45 5884
Poly Eurathane
binder
0.75 52 14.70 4778 15.46 4830
Dye liquid 0.1 100 8.67 7312 8.77 7412
Filler 0.35 20 4.13 1222 4.49 1242
Pigments 1.4 60 12.54 3083 13.94 3143
Acetic Acid 0.05 2 2.47 170 2.52 172
Matting Agent 0.13 17 3.69 1498 3.81 1515
Film Modifier 0.05 20 4.08 3906 4.14 3926
Pull-up Wax - 0 2.44 949 2.44 949
Pullup oils - 0 4.02 1450 4.02 1450
Cross linkers 0.02 10 0.355 900 .37 910
Solvent - 0 0.35 105 .35 105
Formal dehyde - 0 0.05 3 .05 3
Total 9.83 1678 120 44790 129.83 46468
9.2 Chemicals and Accessories: Footwear
Table 9.6: Annual Chemical used for the production of Footwear
82

Both domestic and foreign made chemicals are used in the production of footwear. Adhesive constitute the main head of chemical.
Some chemicals like batal acid, belco, lacker, pasting, sufar are exclusively supplied by the local sources, and some chemicals used
like aqua solar, aciton, thinner, tolbon etc. are of foreign origin. About 70 percent of the total chemicals used (of the total value) are
foreign made. Most of the foreign chemicals are made in UK, India, Taiwan, Malaysia and Germany.
Local Foreign Total
Name of Chemicals Quantity in Kg Value in Tk Quantity in Kg Value in Tk Quantity in Kg Value in Tk
Aqua Solar 0 0 2.5 6250 2.5 6250
Aciton 0 0 130 26000 130 26000
Batal Acid 10 1500 0 0 10 1500
Belco 37 9300 0 37 9300
EMK 10 100 85 25500 95 25600
Gail Goods 0 0 3 6300 3 6300
Glace 0 0 1009 402520 1009 402520
Hardner 0 0 790 723000 790 723000
Lacker 20 3000 0 0 20 3000
Ligar 0 0 9 1440 9 1440
Liquid Spray 0 0 25 11750 25 11750
Latex 0 0 2600 260000 2600 260000
MEK 0 0 630 78900 630 78900
Oxalic 0 0 600 27000 600 27000
Polishing Cream 22 6600 60 17400 82 24000
Powder Dice 0 0 500 18000 500 18000
Pasting 19505 1462500 0 0 19505 1462500
Primer 0 0 1760 607000 1760 607000
Pigment 10 2000 0 0 10 2000
Spray 0 0 48 17700 48 17700
Solution 19500 1365000 5000 400000 24500 1765000
Shining 0 0 1800 2160000 1800 2160000
Split 0 0 40 1200 40 1200
Solvent Laker 20 2100 15 3000 35 5100
Season 15 1500 0 0 15 1500
Sufar 25 1500 0 0 25 1500
Thinner 0 0 3570 286700 3570 286700
Tolbin 0 0 1550 131250 1550 131250
Adhesive 0 0 7200 1008000 7200 1008000
Ecosolar 0 0 4.5 6850 4.5 6850
Cleansing Agent 0 0 20 700 20 700
Zinc acid 25 2500 0 0 25 2500
Staric Acid 25 1500 0 0 25 1500
Antioxident 25 1250 0 0 25 1250
MBT 25 1205 0 0 25 1205
TBT 25 1250 0 0 25 1250
Total 39299 2862805 27451 6226460 66750 9089265
83

A number of accessories like bukless, belt, button, catel, deco, eyelet etc. are used by the
footwear manufacturing firms to produce footwear. About 80 percent (of
the total value) of the accessories used by the footwear-manufacturing units
are locally made. A few accessories like deco, catel tap, and eyelet used by
the footwear firms are exclusively foreign made. Most of the foreign
accessories are made in Korea, Hong Kong, India, Taiwan and Italy.
Table 9.8: Yearly Value of Accessories used for the Production of Footwear
(Value in Tk.000)
Name of accessories Local Foreign
Total
Buckles 248 7087 7335
Belt 1313 1248 2561
Button 7903 475 8378
Catel 11 201 212
Catel tap 0 1799 1799
Daco 0 1640 1640
Eyelet 0 128 128
Others 70356 386 70742
Total 79831 12964 92795
Packaging and labeling materials like paper board box, tracing paper, poly bag, carton etc. are collected from local and as well as
foreign sources. About 50 percent of the packaging and labeling materials used by the footwear firms are of foreign origin. China,
Italy, and Korea were the main suppliers of the packaging and labeling materials for footwear industry in 2003.
9.3 Chemicals and Accessories: Leather Goods
About 90 percent of the chemicals (of the total value) used by the leather goods manufacturing units are locally made (Table 9.9).
Accessories used by the leather goods manufacturing units include bukless, belt etc. Over 70 percent of the expenses on accessories of
the leather goods manufacturing units are on foreign made accessories. Hong-Kong was the main supplier of the foreign made
accessories for the leather goods firms in 2003. Packaging and labeling materials used by the leather goods manufacturing units are
locally made.
Table 9.9: Yearly Value of Chemicals used in the Leather Goods Manufacturing Units
Chemicals Local Foreign Total
84

Adhesive 1630 18 1648
Lacker 2 0 2
TBT 4 0 4
Total 1636 18 1654
Table 9.10: Yearly Value of Accessories used in the Leather Goods Manufacturing Units
(value in Tk.000)
Accessories Local Foreign Total
Bukless 63.5 600 663.5
Belt 151.5 24 175.5
Button 15 0 15
Others 7 4 11
Total 237 628 865
Chapter-Ten
Major Players of the Leather Chemical Industry
(Data Collected from Primary Survey)
10.1 Market Share of Major Beam House Chemical Suppliers
(Wet Blue)
1. Soaking Agent: 550-600MT /Year Price: 100-120Tk Per Kg.
#SL.#SL. SupplierSupplier MarketMarket
ShareShare
1. ACI, Bangladesh 50%
2. BASF, Germany 30%
3. Others 20%
Source: Primary survey
85

Product Name:
Lissapol, ACI;
Lisapen-PA-WB, BASF
2. Soaking Enzyme: 300MT /Year Price: 150-190Tk Per Kg.
ShareShare
1. TFL, Germany 25%
3. Buckman, Singapore 15%
4. TH Bohme 15%
5. Schill & Seilacher, Germany 5%
6. Scitan, Italy 5%
7. Others 15%
Product Name:
(Pellvit C, Pellvit DPH), TFL;
(Basozym-S20), BASF;
(Busan-40L), Buckman;
(Vinkol A), Schill & Seilacher;
3. Liming Auxiliaries: 750-900MT /Year Price: 65-120Tk Per Kg.
ShareShare
1. TFL, Germany 25%
4. Seicie, Italy 10%
5. Schill & Seilacher, Germany 5%
6. Others 30%
Product Name:
(Erhavit-MB), TFL;
(Mollescal AGN, Mollescal LS), BASF;
(Buspers 77432), Buckman;
(Saical-FC), Seicie;
86

4. Deliming Agents: 1000MT /Year Price: 8-15Tk Per Kg.
Chemicals: Sodium Meta Bi-Sulphate, Ammonium Sulphate, Ammonium Chloride
ShareShare
1. Local 75%
2. China, Thiland 25%
Product Name:
(Delimer-AR), Neochemica;
5. Bating Agents: 500-600MT /Year Price: 60-100Tk Per Kg.
ShareShare
1. Clariant, UK 35%
2. TFL, Germany 20%
6. Rock Chem 5%
7. Others 15%
Product Name:
(Oropon-G, Oropon-ANZ, Vulal-K), TFL;
(Basozym-C10), BASF;
(Bate-PBW1), Buckman;
( Z.H Bate) ZH chemical;
6. Pickling Agents: 1500-1700MT /Year
Chemicals: Sulphuric Acid Price: 15Tk. Per kg.
Formic Acid Price:
Salt (NaCl) Price: 10Tk Per Kg.
87

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