The footwear and leather goods industry in Bangladesh is one of the fastest-growing sectors, second only to the ready-made garment (RMG) industry. Because the country has an abundant supply of raw leather and low-cost skilled labor, this sector holds enormous potential for domestic and export markets.
This project profile provides a complete business plan and financial overview for setting up a Footwear and Leather Goods Factory in Bangladesh, including production capacity, investment cost, profitability, and market analysis.
1. Introduction
Bangladesh has established itself as a competitive hub for leather and footwear manufacturing. Local entrepreneurs are investing in factories that produce high-quality shoes, bags, wallets, belts, and accessories for both domestic and export markets.
Most important, global buyers like H&M, Bata, Apex, Picard, and Decathlon already source from Bangladesh. Because of low production costs and growing international reputation, the future of this industry looks bright.
2. Project Summary
| Particular | Details |
|---|---|
| Project Title | Footwear and Leather Goods Factory |
| Project Location | Savar, Gazipur, or Narayanganj (Industrial Zone) |
| Land Area | 20,000 sq.ft. |
| Factory Building | 10,000 sq.ft. production + 2,000 sq.ft. office + 3,000 sq.ft. warehouse |
| Project Capacity | 500 pairs of shoes and 200 leather goods (bags/wallets) per day |
| Employment | 85 persons |
| Project Duration | 12 months (for setup and trial) |
| Expected Life of Project | 10 years |
| Project Cost | BDT 8.75 Crore (approx.) |
3. Project Objectives
- To establish a modern, export-oriented footwear and leather goods manufacturing unit.
- To generate employment and promote skill-based industrial growth.
- To increase foreign currency earnings through export.
- To contribute to the sustainable development of the leather sector in Bangladesh.
4. Market Potential
Bangladesh earns more than USD 1 billion annually from leather and footwear exports. The domestic market also expands rapidly due to rising urban income and changing fashion trends.
- Domestic Market Size (2025): BDT 10,000 crore+
- Export Market Size: USD 1.2 billion (expected to reach USD 5 billion by 2030)
- Major Export Destinations: Italy, Germany, France, China, Japan, Netherlands, USA
Because of growing international demand for eco-friendly leather products, Bangladesh’s industry—if upgraded with compliant factories and sustainable production—can easily capture new markets.
5. Raw Materials and Sourcing
The main raw materials for this project are:
| Raw Material | Source | Availability |
|---|---|---|
| Finished Leather | Local Tanneries (Savar Tannery Industrial Estate) | High |
| Synthetic Leather | Local & Imported | Medium |
| Shoe Soles, Laces, Zippers | Local | High |
| Foam, Threads, Adhesives | Local & Imported | High |
| Packaging Materials | Local | High |
Because Bangladesh has its own tannery industry, raw material availability is reliable, reducing import dependency.
6. Production Process
The footwear and leather goods production process involves several steps:
- Design & Pattern Making
- Cutting of Leather and Fabric
- Stitching and Assembling
- Lasting and Sole Attachment
- Finishing, Polishing, and Quality Control
- Packaging and Dispatch
The factory will maintain strict quality control to ensure international standards, including durability, finish, and comfort.
7. Machinery and Equipment
| Machinery Name | Quantity | Estimated Cost (BDT) |
|---|---|---|
| Cutting Machine | 2 sets | 15,00,000 |
| Skiving Machine | 2 sets | 10,00,000 |
| Sewing Machine (Industrial) | 20 sets | 40,00,000 |
| Lasting Machine | 2 sets | 12,00,000 |
| Sole Press Machine | 2 sets | 10,00,000 |
| Embossing & Stamping Machine | 1 set | 8,00,000 |
| Finishing & Polishing Machine | 1 set | 6,00,000 |
| Air Compressor | 1 set | 3,00,000 |
| Generator (50 kVA) | 1 set | 10,00,000 |
| Miscellaneous Tools & Equipment | — | 6,00,000 |
| Total Machinery Cost | 1,20,00,000 |
8. Manpower Requirement
| Category | No. of Persons | Average Salary (BDT/month) | Annual Cost (BDT) |
|---|---|---|---|
| General Manager | 1 | 80,000 | 9,60,000 |
| Production Manager | 1 | 60,000 | 7,20,000 |
| Designers | 2 | 40,000 | 9,60,000 |
| Quality Controller | 1 | 35,000 | 4,20,000 |
| Machine Operators | 15 | 20,000 | 36,00,000 |
| Stitching Workers | 20 | 18,000 | 43,20,000 |
| Helpers | 10 | 12,000 | 14,40,000 |
| Accounts & Admin Staff | 5 | 25,000 | 15,00,000 |
| Security & Drivers | 5 | 15,000 | 9,00,000 |
| Total (85 Persons) | 1,48,20,000 per year |
9. Project Implementation Schedule
| Activity | Duration |
|---|---|
| Project Planning & Feasibility Study | 1 month |
| Land Development & Building Construction | 4 months |
| Machinery Procurement & Installation | 3 months |
| Staff Recruitment & Training | 2 months |
| Trial Production | 2 months |
| Total Implementation Period | 12 months |
10. Estimated Project Cost
| Item | Amount (BDT) |
|---|---|
| Land & Land Development | 1,50,00,000 |
| Factory Building & Civil Works | 2,00,00,000 |
| Machinery & Equipment | 1,20,00,000 |
| Furniture & Office Setup | 20,00,000 |
| Vehicles & Transport | 25,00,000 |
| Pre-Operational Expenses | 15,00,000 |
| Working Capital (6 months) | 1,00,00,000 |
| Contingency (5%) | 45,00,000 |
| Total Project Cost | 8,75,00,000 |
11. Working Capital Requirement
| Item | Monthly Cost (BDT) | 6-Month Requirement (BDT) |
|---|---|---|
| Raw Materials | 30,00,000 | 1,80,00,000 |
| Salaries & Wages | 12,35,000 | 74,10,000 |
| Utilities & Maintenance | 3,00,000 | 18,00,000 |
| Transportation & Delivery | 1,50,000 | 9,00,000 |
| Marketing & Promotion | 1,00,000 | 6,00,000 |
| Administration & Miscellaneous | 1,00,000 | 6,00,000 |
| Total | 48,85,000 | 2,93,10,000 |
(However, initial working capital investment will be limited to around BDT 1 crore in the first phase.)
12. Financial Analysis
12.1 Production Capacity Utilization
| Year | Capacity Utilization | Production (pairs of shoes + goods) |
|---|---|---|
| 1st Year | 60% | 105,000 units |
| 2nd Year | 75% | 131,250 units |
| 3rd Year | 90% | 157,500 units |
12.2 Revenue Projection
| Year | Sales Volume | Average Selling Price (BDT/unit) | Total Sales (BDT) |
|---|---|---|---|
| 1st Year | 105,000 | 1,800 | 18,90,00,000 |
| 2nd Year | 131,250 | 1,900 | 24,93,75,000 |
| 3rd Year | 157,500 | 2,000 | 31,50,00,000 |
12.3 Operating Cost Estimate
| Description | Annual Cost (BDT) |
|---|---|
| Raw Materials | 7,50,00,000 |
| Labor & Wages | 1,48,20,000 |
| Utilities | 36,00,000 |
| Factory Overheads | 50,00,000 |
| Marketing & Distribution | 24,00,000 |
| Administrative Expenses | 30,00,000 |
| Depreciation | 40,00,000 |
| Total Annual Operating Cost | 10,78,20,000 |
12.4 Profitability Analysis
| Year | Sales (BDT) | Total Cost (BDT) | Net Profit (BDT) | ROI (%) |
|---|---|---|---|---|
| 1st Year | 18.9 Cr | 10.78 Cr | 8.12 Cr | 23.2% |
| 2nd Year | 24.93 Cr | 11.5 Cr | 13.43 Cr | 32.8% |
| 3rd Year | 31.5 Cr | 12.2 Cr | 19.3 Cr | 39.8% |
Break-Even Point: Approximately 48% of full capacity.
Payback Period: Around 3 years.
13. SWOT Analysis
| Strength | Weakness |
|---|---|
| Availability of raw materials | Need for skilled designers |
| Low labor cost | High competition in export market |
| Strong government support | Lack of advanced testing facilities |
| Opportunity | Threat |
|---|---|
| Export market expansion | Global price fluctuation |
| Local market demand growth | Environmental compliance pressure |
14. Environmental and Social Impact
The project will follow eco-friendly and sustainable production practices, including waste treatment and proper disposal of chemicals and leather residues. It will also create employment opportunities for youth and women, contributing to poverty reduction.
15. Risk Factors and Mitigation
| Risk | Mitigation Strategy |
|---|---|
| Market price fluctuation | Diversify product line and markets |
| Delay in raw material supply | Maintain sufficient stock |
| Export regulation changes | Stay compliant and certified |
| Skilled manpower shortage | Continuous training programs |
16. Conclusion
The Footwear and Leather Goods Factory Project in Bangladesh is a profitable and sustainable investment. Because of low production costs, export demand, and government incentives, investors can expect a quick return and stable long-term growth.
This sector holds immense potential for both domestic and foreign entrepreneurs looking to enter Bangladesh’s manufacturing market.
17. Call to Action
We, RAYHANS, prepare bankable project profiles for all kinds of industries in Bangladesh and abroad — including footwear, leather goods, auto rice mills, cold storage, ceramics, feed mills, and more.
Our project profiles are designed to meet bank loan requirements, foreign investment proposals, and industrial licensing standards.
📞 Contact Us Today
Email: [email protected]
Phone: +8801716752370
Website: www.cbecl.com
Let’s build your industrial dream into reality — from project planning to implementation.