Bangladesh Plans New Effluent Plant to Protect $5 Billion Leather Export Target

Bangladesh will build a new central effluent treatment plant at the Savar tannery estate to protect its target of reaching $5 billion in leather and footwear exports by 2030.

The existing facility processes between 14,000 and 18,000 cubic metres of liquid waste a day, well below its designed capacity of 25,000 cubic metres. Volumes surge to 45,000 cubic metres daily during peak slaughter periods such as Eid-ul-Azha, overwhelming the site and blocking factories from securing international environmental certifications.

Overhauling the Savar Estate

Commerce and Industry Minister Khandaker Abdul Muktadir said the government will select a private operator through an open tender to construct and run the replacement facility. Larger tanneries will receive financial and technical backing to build individual treatment units, while non-compliant operators will receive assisted exit packages to leave the cluster. Tanneries that stay must secure certification from the Leather Working Group.

Infrastructure bottlenecks extend beyond liquid waste. Bay Group Managing Director Ziaur Rahman reported spending nearly Tk30 million on solid-waste handling last year alone, citing unresolved gas shortages and unpaved roads across the estate. Bangladesh shipped $1.76 billion worth of leather goods and footwear across 105 markets last year, yet roughly 65 per cent of leather leaves the country as crust leather rather than finished consumer merchandise.

Cutting Red Tape for Footwear Makers

Footwear manufacturers are pushing to diversify beyond raw hides. Non-leather shoes now generate 31 per cent of the sector’s export revenue, but Bangladesh controls less than 0.5 per cent of global trade in the category. The Footwear Leathergoods and Accessories Exporters Association estimates that lifting that share to 5 per cent would add $3.5 billion in export value.

Across Southeast Asia, rival manufacturing hubs have pulled ahead by streamlining factory setup and clearing environmental hurdles. Vietnam requires four compliance documents for footwear exporters, whereas Bangladeshi manufacturers must navigate 23 separate licences and 190 administrative filings, according to trade group data. That administrative drag slows foreign joint ventures and leaves machinery import permits stalled for months.

Government negotiators are preparing bilateral talks with Japan to widen tariff concessions on finished leather items before Bangladesh loses its least developed country trade preferences.