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Shoe manufacturer increases operations via expansion
30
Jun '10
Fortuna Bangladesh gets ready to diversify its operations in the shoe industry, by raising its manufacturing capacity and setting up the nation's first-ever shoe mould producing factory by joining with a China-based firm, in the month of September.

Earlier, known as Fortuna Group, the firm had invested Tk 560 million in establishing new factories and importing high-tech machinery.

Fayaz Taher, CEO, Manufacturing and Retail Division, Fortuna Bangladesh, said that, the factory in Kunia, Gazipur was set up in February, with an intention to expand the company's state-of-the=art footwear producing facility, so as to manufacture 6,000 pairs of shoes per day, from the current capacity of 2,500 pairs.

Although, with the establishment of the new factory, they also intend to tap the domestic markets, but it will mainly manufacture footwear for the global markets. Taher expects to earn foreign revenue worth Tk 2 billion per year, once they commence footwear exports.

Currently, the shoe industry is in its initial days, which is on the lines of the initial period for readymade apparels industry, informs Taher.

More so, Chinese buyers are now entering Bangladesh, owing to increasing cost of labour in their country. In addition, many European buyers are also eyeing to take advantage of the duty-free export facility to the EU nations, as an extra 16.5 percent tax has been imposed on the export of footwear from China, averred Taher.

With the WTO antidumping regulations, nations such as India and China, are unable to manufacture high-quality, low-priced leather goods, thereby, rapidly pushing orders from Japan, France, Germany, Italy and Canada to domestic producers. Earlier, the biggest leather shoe exporting nations were India, Vietnam and China.

According to Taher, Fortuna shoe firm is manned by foreigners, for instance, Chinese professionals were hired to look after the technical and manufacturing side, American designer was picked up for the firm's creativity and designing department.

Taher believes that, this was the best possible way to transfer technical and creative knowledge. With their source of finished leather, vertical integration was always Fortuna's vision, from the time it was incepted in 1991.

Through this new set up, the company intends to produce plastic moulds, which are currently being bought from China and India. This according to the firm, will ensure an accurate shape for their shoes, which most of the domestic footwear firms are unable to achieve, as they use wooden moulds, said Taher.

Going further with Fortuna's expansion plans, they have signed a joint venture with a Spanish firm to produce outsoles. They will have a collection of more than 100 different outsole styles. Fortuna also intends on launching its one-stop shop for international shoe buyers. It has already launched four retails outlets to serve the local markets.

Despite, declining demand for fashionable and high-end leather footwear, globally, owing to the world economic downturn, Bangladesh still has a chance to manufacture ordinary but important shoes.

With the commencement of exporting leather footwear in 1994, on a small level to its neighbouring nations, India and Nepal, the footwear industry has grown in recent times.

The overall market size of Bangladesh's leather footwear stands as Tk 17 billion, of which 45 percent is exported. About 6 million pairs of leather footwear are exported annually.

Fibre2Fashion News Desk - India

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