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According to local media reports, fifteen tannery owners have already started construction of their factories at the new Savar Leather Industrial Park in a bid to speed-up the relocation of the factories from Hazaribagh in Dhaka. The companies, which include Ruma Leather Industries, Bengal Leather Complex, Kohinoor Tanneries, Pragati Leather Complex, have begun preliminary works such as piling, construction of labour sheds and soil tests, said M Abu Taher, chairman of Bangladesh Finished Leather, Leather Goods and Footwear Exporters' Association.
Taher's company Ruma Leather Industries was the first to begin sand piling, with full-fledged work set to begin next month. The move comes as the year end deadline set by the European Union for relocation draws near. Bangladesh faces an export ban on leather or leather goods to European countries if the deadline is not met. Many companies are interested to set up the factories in the leather estate as the construction of a central effluent treatment plant, a key component of the project, has resumed, said Shaheen Ahmed, Chairman of Bangladesh Tanners Association. Tanners have decided to relocate the factories to Savar, taking the environmental issues into account and hoping to boost exports, said Ahmed, also the Chairman of Kohinoor Tanneries. The industries ministry has already allocated the plots on the 200-acre leather estate to the 155 tannery owners through Bangladesh Small and Cottage Industries Corporation, a wing of the industries ministry implementing the project. A total of 148 tannery owners have submitted their factory layout plans, of which 112 plans have been approved. Tannery owners, however, have urged the government to provide long-term loans with a single digit interest to expedite the relocation. Investment of around Tk 7,500 crore (US$96 million) is needed for relocation, said Taher, adding that if financing is not arranged by the government many tannery owners will have to fold their businesses. The leather industry has crossed the record $1-billion mark in exports for the first time in history in just the first ten months of the fiscal year. Between July and April, the leather industry exported $1.06 billion of products, whereas the export receipts for the whole of fiscal 2012-13 stood at $980.67 million, according to data from the Export Promotion Bureau. Amir Hossain Amu, Industries Minister; Anwar Hussain, Environment Minister; Shajahan Khan, Shipping Minister; and Md Qamrul Islam, Food Minister, visited the Leather Industrial Park in Savar on May 21.