Livestock department and Bank of Punjab will help Pakistan Tanners Association members apply as raw leather exports keep slipping and tannery pollution persists.
LAHORE:Punjab is urging tanneries to borrow up to Rs5 billion each under its flagship industrial financing programme to modernise plants, treat effluent and move into higher-value leather goods, as the province tries to reverse years of stagnant leather exports.
Livestock and Dairy Development Secretary Ahmad Aziz Tarar met a Pakistan Tanners Association (PTA) delegation led by chairman Malik Muhammad Azam on Saturday to promote the Sanati Taraqi & Export Programme (STEP). His department, together with the Industries Department and the Bank of Punjab, agreed to help PTA members prepare and submit applications.
STEP lends in three tiers: Rs1 million to Rs100 million for export financing, Rs100 million to Rs1 billion for inclusive industrial growth, and Rs1 billion to Rs5 billion for strategic and high-value projects. Applications are made through step.punjab.gov.pk, and the programme helpline is 042-99030283.
The department described the financing as interest-free. Earlier official said only the smallest tier was interest-free, with the larger tiers carrying a concessional markup of about 3 percent and 5 percent. Tanners weighing large projects should check the terms that apply to their tier.
The programme is a core part of the chief minister’s PIVOT plan, which targets $6.8bn in additional exports and 162,000 jobs by 2029. Budget documents put STEP’s allocation at Rs193 billion to support 463 industrial projects with 10-year repayment, with the Bank of Punjab mobilising up to Rs300 billion in lending.
An industry stuck in neutral
Leather has been one of Pakistan’s more resilient non-textile exports, but growth has been thin. In fiscal 2025-26, exports of leather manufactures rose just 0.64 percent while raw leather exports fell 6.35 percent, according to Pakistan Bureau of Statistics data. Tanned leather exports fell 4.49 percent to about $120.7 million in the first eleven months of the year.
The new fiscal year has started better. Leather goods exports rose 13.45 percent to $118.4 million in July-August, led by leather garments.
Officials want tanners to sell finished leather and products rather than semi-processed hides. Tarar said the industry had significant potential to strengthen Punjab’s export base, attract private investment and create jobs, and that interest-free financing would help firms improve productivity, quality and their place in international markets.
The effluent question
PTA members said they wanted to use the financing to upgrade tannery infrastructure, adopt new technology, improve effluent treatment and meet environmental rules. Those last two items matter as much as output.
Pollution from tanneries has dogged clusters such as Kasur for decades. After a Lahore High Court order directing Kasur tanneries to install effluent treatment or chrome recovery plants, only two complied, according to local reporting. In June, Sialkot opened what its operators called Pakistan’s first fully integrated common effluent treatment plant at the Sialkot Tannery Zone, a model that other clusters could copy with STEP money.
Buyers in Europe and the United States increasingly require chemical and environmental compliance from leather suppliers, so cleaner tanneries are also a condition for export growth. Punjab has also stepped up enforcement, sealing industrial units in a pollution crackdown.
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