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A seismic shift in Bangladeshi industry

Article - August 21, 2013
The industrial sector is growing and diversifying as the country moves toward producing high value finished products. The leather industry is a prime example
LEATHER EXPORTS REACHED £493M IN 2012
Many Western countries shift towards service-based economies, their industries are relocating to developing countries such as Bangladesh, which has seen rising activity in many areas, from shipbuilding to pharmaceuticals and leather goods. 
 
Bangladesh is a nation in transition, explains Minister of Industry Dilip Barua. “In Bangladesh, the economy was previously dominated by trading, so a policy was adopted as such, because Bangladesh was a very good market for foreign goods. So we are shifting that attitude. We want to become an industrial country,” he says. 
 
“Without an industrially based economy, your economy will not be sustainable. Our honourable Prime Minister is committed to transforming Bangladesh into a middle-income country by 2021. This philosophy gave us a sense of direction, so we formulated an industrial policy for 2010 for the short, middle and long-term. We are looking at SMEs and then big industries. There are three tiers of industrial sectors. We are looking at small industries, mid-sized industries and large industries. Traditionally we have had a small entrepreneurship industry.
 
“The main function of the Ministry of Industry is to provide policy and logistics support, as well as support for investment, marketing and research and development. This is our main target. We want to support all entrepreneurs.”
 
One such area which that has gone through this transition from trading to industry in recent years is the leather industry. Last year, the value of exports of leather and leather products reached £493 million, and there has been a sizeable shift towards exporting finished products from raw leather. 
 
“If you look at exports from the leather sector over the past 15 years, out of total leather exports, almost 70 to 80 per cent came from leather exports, and only 20 per cent were finished products. Today, 55 per cent are products, and 40 to 45 per cent are leather, which means that we are moving towards making products, rather than selling raw materials. It is all about added value,” says Syed Nasim Manzur, Managing Director of Apex Adelchi Footwear.
 
Annually, leather footwear companies in Bangladesh generate sales of around of £150 million. The country yearly exports around 65 million pairs, with Apex Adelchi being its largest exporter; around 80 per cent of the company’s revenue comes from international sales. It exports to 47 countries, including Japan, a country which expects only the highest quality in its leather products.   
 
“We started exporting shoes to Japan as early as 1992, and we work with some of the most famous names there. We as a country do this, not just APEX – even small factories are manufacturing for Japan. It is about diversification, job creation and value addition, and export market and product diversification,” explains Apex Adelchi’s MD. 
 
The company has grown from strength to strength since its inception in 1990. Its sales reached £80.7 million in 2012, marking a 73 per cent increase in five years. Mr Manzur believes the company’s size and success comes from adhering to stringent quality controls and taking care of its biggest asset: a highly skilled and motivated workforce of around 15,000 people. He says: “The secret to success is therefore very simple – you take care of your people, and the people will take care of the company. You must make people part of the success of the company.”

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