Project Report

On

The Consumer Behavior of Leather Industry in

Bangladesh

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 Submitted to

Mrittika Shil

Lecturer

Department of Innovation & Entrepreneurship

Daffodil International University

Supervised by

Mrittika Shil

Lecturer

Department of Innovation & Entrepreneurship

Faculty of Business & Entrepreneurship

Daffodil International University

Submitted by

Naima Jahan

ID: 172-45-155

Batch: 8th

Department of Innovation & Entrepreneurship

Faculty of Business & Entrepreneurship

Daffodil International University

Date of Submission:

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 Letter of Submission

Date: 24 April, 2019

To,

Mrittika Shil

Lecturer, Department of Innovation & Entrepreneurship

Faculty of Business & Entrepreneurship

Daffodil International University

Subject: Submission of project 02 report on Internship.

Dear Sir,

With due respect, I would submit my project 02 report on internship at Annex Leather Limited. I
have collected information as possible from the management of Annex Leather limited. I have
been working here for one month. I believe that this internship program will enrich both my
knowledge and experience. If you have further queries regarding this report, please let me know.
Thank you.

Regards

Naima Jahan

ID: 172-45-155

Program: BED

Department of Innovation & Entrepreneurship

Faculty of Business & Entrepreneurship

Daffodil International University

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 Declaration of student

I am Naima Jahan, ID: 172-45-155, 8th batch, Department of Innovation & Entrepreneurship,
hereby declare that the presented project 02 report on Internship is prepared by me after
completing my one month out of 6 month’s work at Annex Leather Limited.

My original work is submitted to Daffodil International University, and no part of this report has
been submitted for any other courses , degree or fellowship and the work has not been publish on
any journal or magazine.

Naima Jahan

ID: 172-45-155

Department of Innovation & Entrepreneurship

Faculty of Business & Entrepreneurship

Daffodil International University

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 Acknowledgement

First, all praise to go to the Almighty Allah, the most gracious, the most merciful, the most kind
& generous to mankind and His action. This internship report is about leather industry in
Bangladesh. For preparing this report, I am grateful to Mr. Tofazzal, operation head, Annex
leather Limited. He helped me a lot through the time of work by giving his valuable time.

I would like to convey my sincere gratitude to my University supervisor, lecturer Mrittika Shil,
Department of Innovation & Entrepreneurship, Faculty of business & Entrepreneurship, Daffodil
International University. Without her guidance & assistance the report would not have been seen
light of day.

Finally, my deep gratitude goes in favor of my university for getting library, lab facilities & my
teachers to enrich my knowledge, which helps me in different stages to complete this report.

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 Executive summary
The project report has been made based on six-month internship at Annex Leather Limited. Out

of six month I have completed only one month. I choose this internship program because I want

to do business with leather goods so this internship program helps me to know the practical

knowledge about the entire leather industry so that I can apply my knowledge into my business.

In 1965, the first tannery was established by R.P. Shaha at Narayongonj. After that the tannery

was shifted to Hazaribag and expanded the leather industry from there. But now government

again shifted the whole tannery industry to Savar and named it Savar leather industrial park.

Annex leather limited is a public limited company in Bangladesh. Five years back from now Mr.

Tofazzal and Mr. Mustafa jointly started a startup at azaribag. And the most amazing thing is

after 5 years of their establishment they enrolled their business in public limited company.

Though Bangladesh is producing lots of raw leather but the surprising thing is we contribute very

little in the local market. The world market is about $215 billion and our contribution is only

1.08 billion that means 10% of the entire market. Another thing is our local market size is also

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big and it is about 160 billion and out of 160 billion we are able to meet demand only 40% and

rest of the 60% met by importing from abroad.

The report comprises of four parts- In consisting chapter one includes Introduction of the study,
objective of the study, scope and limitations of the study. In chapter two the overview of the
company, their vision and mission, production, supply chain management, marketing, sales. The
chapter three of this report contains the findings and SWOT analysis of the company. The last
chapter, chapter four is all about recommendation and conclusion

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 Table of contents
Chapter No. Topics Page No.
Executive Summery
Chapter One Introduction 01
1.1 Introduction 02
1.2 Origin of Report 02
1.3 Objectives of the Report 02
1.4 Methodology 03
1.5 Limitations 03

Chapter Two Overview Company Profile 04

2.1 Brief Overview 05
2.2 Vision of Annex leather 05
Limited
2.3 Mission of Annex leather 05
Limited
Chapter Three Production 06
3.1 Production 07
3.2 Product list 07
3.3 Production Process 08

Chapter Four Supply Chain Management 11

4.1 Supply Chain Management 12
4.2 Forecasting Demand 12
4.3 Sourcing Supplier 12
4.4 Manufacturing 13
4.5 Inventory 13

Chapter Five Marketing & Sales 15

5.1 Marketing 16
5.2 Sales 16

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Chapter Six SWOT Analysis & Findings 17
6.1 SWOT Analysis 18
6.2 Findings 19

Chapter Seven Recommendation and 20

Conclusions
7.1 Recommendation 21
7.2 Conclusions 21

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Chapter One
Introduction

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1.1Introduction:

If we look at the present situation and comparison of leather and leather products production in
Bangladesh compared to other countries, then we see that Bangladesh is one of the largest good
qualities of raw leather producer country in the world. But the most unexpected thing is we are
not in the top 10 position in the whole world, where china India, USA leading the market.
Another thing is USA’s 90% finished leather comes from Asian countries through exporting
there for processing. Apart from this case, we export processed leather like to India, USA and
other countries as a result what happens if we export finished products instead of processed
leather we can earn more. And though this leather sector is second priority sector in the
Bangladesh, leather producers are not initiates to move forward to make finished products.

1.2Origin of the report

There are myths about leather in our country and these are, leather product is more expensive
and it is not durable. But these myths are not right that price is affordable by the customer
because we are the direct producer and it lasts very long time. This report titled “Buying
behavior of leather goods in Bangladesh” is prepared as a part of the fulfillment of project 02 of
the Bachelor of Entrepreneurship degree.

1.3 Objective of the report:

The main objective of this report is to analyze the buying behavior of leather goods in
Bangladesh.

● To know what are the major factors consider buying leather goods.

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 ● To know why customers are not willing to buy leather goods?
● To analyze what types of leather goods they want?
● To find out the exact gab between customer and producer.

1.4Methodology

This report is prepared for to know the buying behavior of leather goods in Bangladesh and I
have collected necessary information from two types:

❖ Primary sources of data

● Face to face interview with some leather goods producer
● Interview with some customer

❖ Secondary sources of data:

● Documents of Annex leather limited
● Different websites
● Different newspaper and article

1.5limitations of the study

● Every organization has their own secrecy so I cannot get proper and accurate information
sometimes.
● Lack of time
● The location of leather industry is not a friendly place for a alone women for collecting
data.

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 Chapter two

Overview of the company

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2.1 Brief overview:

Annex leather limited is a public limited company in Bangladesh. Five years back from now Mr.
Tofazzal and Mr Mostafa jointly started a startup at hazaribag. And the most amazing thing is
after 5 years of their establishment they enrolled their business in public limited company.

Though Bangladesh is producing lots of raw leather but the surprising thing is we contribute very
little in the local market. The world market is about $215 billion and our contribution is only
1.08 billion that means 10% of the entire market. Another thing is our local market size is also
big and it is about 160 billion and out of 160 billion we are able to meet demand only 40% and
rest of the 60% met by importing from abroad.

So between this crucial point Annex leather Limited working to fulfill the local demand along
with increasing global market contribution through exporting leather goods. As their target
customers are middle class people in the Bangladesh, so they consider the affordable price for
the customer so that we all can buy leather goods and increase our domestic market.

2.2 Vision of Annex Leather

To expand their business all over the Bangladesh by few years.

2.3 Mission of Annex Leather Limited

Keeping the vision in the mind they will serve good qualities of leather goods in an affordable
price.

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 Chapter Three

Production

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3.1 Production

Annex leather Limited is leather goods producer in Bangladesh. They produce lots of leather
goods in different category. Their products are shoes for male female both, bags (travel bag,
different ladies bags, corporate bags etc.), prayer matt, prayer cap, and others accessories items.
Among these products categories most of the products are made by Annex at their production
house. Only shoes are out sourcing from the third parties because Annex is a startup, for shoes
production there needs a huge infrastructure and that is more costly at this moment for Annex.
But they have plan for it to go production at a full swim.

In their production house, every product transformation from its raw shape to its finished shape,
they take time average only 4 to 5 days. They have around 20 skills employees in their
production site. After finishing the products make, every product is send to the quality control
room for measuring the quality according to design or standard.

3.2 Product List:

Product Name Customers Materials

Shoes Male. Female Leather

Bags Male, Female Leather

Belt Male Leather

Money bags Male Leather

Prayer mat Male, Female Leather

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Payer cap Male, Female Leather

Other Leather

3.3 Production Process:

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 Chapter Four

Supply Chain Management

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4.1 Supply Chain Management

Within the organization supply chain management refers to such activities like inbound and
outbound transportation of products, warehousing, inventory control, sourcing supplier etc. So
Annex leather follows supply chain management for better output of production and their supply
chain management is very strong because they directly collect their raw materials and other
accessories from those production house as a result they can buy products at a very cheap rate.

4.2 Forecasting demand:

Basically we produce products based on forecasting because we don’t know how much will be
sold or not. So in this case Annex Leather estimates their raw materials according to their
product demand and their experiences. For minimizing the cost and others factors they always
plan to purchase around 6 months materials at a time.

4.3 Sourcing Supplier:

After forecasting the demand Annex leather limited sourcing needs to source the supplier who
can supply the best products. It can be third party or other producer company. They select
supplier very carefully because the final products depends on the raw materials which will be
collected from different supplier. To select good supplier they consider some major factors and
they are- quality, price, reliable and convenience because behind this consideration they think
that they will not change their supplier frequently that hamper the business flows as well as
production flows. That’s whys they always try to find out the most reliable and best supplier to
supply their raw materials.

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 Make Supplier list
They make potential
supplier list based on their
Supplier evaluation quality.

Develop alternative supplier After completing the list of

vendor the send them a
proposal and vendor send
Annex product sample. Then
Annex evaluates that vendor
and through negotiation they
formally agree to do
business.

For avoiding any emergency

an crisis they also develop
alternative suppliers.

4.4 Manufacturing

After all the process is to be done, then they go for manufacturing. Annex Leather has its own
production factory and here different products are produces and other thing is they also sourcing
the products from different manufacturer and most of the time the sourcing shoes and some bags.

4.5 Inventory

To minimize the cost, they keeping inventory for each products with its details so that further
they have not to face any crisis.

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Raw leather collected from Accessories collected from They have their own
reliable suppliers importing from china designer

Warehouse

Hazaribag

Production House

Manufacturing the
products Keeping inventory

Handover to the
customers
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 Chapter Five
Marketing & Sales

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5.1 Marketing
Marketing is the core function of any kind of business. As Annex is working with leather
products and in our country perspective there are some myth about leather products. Among
those myths, customer knowledge and lack of knowledge are most important. So as we know
that Annex is doing their business on that point so they have to emphasize on product marketing
in different angle so that customer has no confusion when they go for buying leather goods.

Types of Details
advertising &
promotion

Digital marketing They already have created a Facebook page. Every update and information
((Facebook, E- about their company are available for their customer.
mail, Linked in,
You tube)

Website They have their own establish website and they are strictly maintain that
because they are also exporting their products in abroad.

News Paper As their target customer is all over the country so some of the place in our
country still not yet under social media and website coverage. So reach
those under coverage people they regularly publish advertisement in the
prominent newspaper in Bangladesh.

Banners For the city customer like Dhaka, Chittagong they are posting banners.

5.2 Sales

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For selling products Annex leather limited has three outlets. Tow outlets are in Dhaka city and
rest of the one is Chittagong. Apart from these three outlets they have also few online store in
different platform like Daraz, Ajker deal and Facebook page.

Chapter Six
SWOT Analysis & Findings

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6.1 SWOT Analysis of Annex

Weakness
Strength
 High price
 Availability of raw material  Lack of awareness
 Cheap labor cost  High cost structure
 High growth  Lack of promotional activities
 Potential market

Opportunities Threats

 Potential local & international  Technological hindrance

market  Establish market competitors
 Government special concern  Financial crisis

6.2 Comparison among Annex Leather Limited and others

Annex Leather Limited Bata

 Annex leather limited is a Bangladesh  Bata is a Canadian multinational
public limited leather producer shoes maker company
company
 Founder of Bata brand is Thomas
 Founder of Annex are Mr. Mostofa Bata
Dpi & hir partner Toffajjol Topu

 Age of Bata brand is 124.

 Age of Annex limited is only 05 years
 They have 5300 shops in 70 different
 They have only 03 shop in 03 different countries.
places in Bangladesh
 They are working with differ
products like leather shoes, bags,
 Annex registered itself as a public clothing
limited company

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6.3 Findings
● Their overall business documentations are not good because their no. of official
employees is very few as a result one employee done different types of job.
● Their marketing is traditional not trendy as a result they are unable to attract more
customer.
● They are less innovative

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 Chapter Seven
Recommendation & Conclusion

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4.1 Recommendations
❖ To attract more customers Annex leather Limited has to create new marketing strategy
which will increase their brand value.
❖ Annex Leather need to more emphasize employee’s skill development.
❖ All the official activities should be under digital technology.
❖ Improving customer feedback system
❖ To hire a good designer

4.2 Conclusion
Though Bangladesh is the one of the largest raw leather producer country in the world but lack
of nurture and proper patronage, this industry is now in threat. If government of Bangladesh and
we are the entrepreneurs to take initiatives then we can bring the life back in this industry.
Because if we carefully noticed in the global market we can see that the top leather producer
countries are lost their market because of increasing wages of leather industry, different tax
issues etc. so in this stage we have the great opportunity to make use of those opportunities.

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