Govt to offer financial, technical support to revive idle Savar tanneries

The government will provide financial and technical assistance to revive tanneries that have remained idle since relocating to the Savar leather industrial estate, Commerce Minister Khandakar Abdul Muktadir said on Wednesday.

Announcing the initiative at the Bangladesh-Netherlands Sustainable Trade Forum 2026 in Dhaka, the minister urged factory owners to comply with stricter environmental standards to improve the industry's access to international markets.

“No tannery that fails to comply with environmental regulations will be allowed to operate,” he said.

The government is also planning to strengthen waste treatment facilities and make Leather Working Group (LWG) certification mandatory for all tanneries in Savar.

Muktadir said the relocation of tanneries from Hazaribagh to Hemayetpur in Savar had been prolonged, leaving several factories unable to resume production and hindering the industry's development. The government would support those businesses in restarting operations.

Factories with an area of 50,000 square feet or more would be required to install their own effluent treatment plants (ETPs), while all tanneries in the Savar industrial estate would have to obtain LWG certification, he said.

The government also plans to expand the capacity of Savar's central effluent treatment plant (CETP) and install an advanced chromium recovery unit to improve industrial waste management.

Bangladesh exported around $1.78 billion worth of leather and non-leather products last year, Muktadir said, identifying the European Union as a major potential market and neighbouring India as an important buyer of Bangladeshi leather goods.

He said improving product quality, ensuring environmental compliance and bringing production standards in line with international requirements would be crucial to unlocking the sector's export potential.

The minister also inaugurated the Centre for the Promotion of Imports from Developing Countries (CBI) programmes on home textiles and leather at the forum.

Separately, he announced that the allocation for the SME loan refinancing programme had increased to 2,000 crore taka from 300 crore taka since the government took office.

The programme has a loan recovery rate of 98%, which Muktadir said reflected the financial discipline and repayment capacity of small and medium-sized entrepreneurs.

He said the government was also planning to restructure the SME Foundation to make institutional support and financing more accessible to small businesses. Many such enterprises struggle to secure bank loans because of complicated documentation and lending procedures, he added.

Muktadir said the cottage, micro, small and medium enterprise sector contributed less than a quarter of Bangladesh's gross domestic product (GDP), arguing that its share needed to rise to at least 60% to reduce economic inequality and generate employment.

The forum was jointly organised by the Netherlands-based CBI and LightCastle Partners. Dutch Ambassador to Bangladesh Joris van Bommel and CBI Managing Director Judith Arends also addressed the event.

Participants discussed ways to expand bilateral trade, facilitate technology transfer, develop industrial skills and improve access to international markets, particularly for Bangladesh's home textile and leather sectors.