Shipbuilding industry can earn more for Bangladesh

[Hammer-fist]

Shipbuilding industry can earn more for Bangladesh

Published : Sunday, 17 February 2013


Shahana Bilkis

Shipbuilding has of late emerged as an important sector in the Bangladesh economy. All inland and coastal ships are now manufactured in Bangladeshi shipyards. The government has declared shipping industry as one of the driving forces of our economy. The government's move aims at developing the shipbuilding sector to its full scale so that more and more orders from overseas pour in to the Bangladeshi dockyards.

Bangladesh has the potential to earn US$2.0 billion by exporting ships and vessels in the next five years, sources of the Association of Export-oriented Shipbuilding Industries of Bangladesh, said. The country has been exporting new ships to European Union market, especially to Denmark, Finland and Germany. It is now set to deliver a good number of ships under orders received from Germany, the Netherlands, and Denmark.

Among a dozen of our shipyards, Ananda, Western Marine, High Speed Shipbuilding, Dhaka Dockyard and Engineering Works, Khan Brothers Shipbuilding and Karnaphuli Shipyard are the leading ones that make ocean-going vessels for international buyers. They are capable of making ships of about 10,000 DWT as per international standard, and performance of three of those has been highly appreciated.

Shipbuilding industry of our country needs to overcome a number of challenges. First of all, they have to get more orders from clients abroad through global competition. In order to sustain the competition, the Bangladeshi ship manufacturers need a skilled workforce, deep draft basins with access to the sea, reasonable infrastructure, long-term government policy support, allied forward and backward linkage industries. Bangladesh is a very new entrant in the shipbuilding business. So, there are some weaknesses in this industry. Scarcity of capital, high manufacturing cost, backwardness in technology, inadequate electricity supply, diplomatic deficiency and poor marketing network, inadequate management pool for expanding shipbuilding industry, lack of basic design abilities, procrastination in material mobilisation, lack of comprehensive skill development in various shipbuilding trades, no policy body for advising the government on shipbuilding, and lack of subsidy support are some of the weaknesses of the industry which must be overcome through proper steps. There is also a necessity of existence of industry-related educational and training institutes.

The shipbuilding industry of Bangladesh has created a market for the local furniture manufacturers who supply furniture to the export-oriented shipbuilders. It could become the third largest foreign exchange earner in less than ten years if everything goes fine and the government supports and provides with the necessary bank guaranty, access through green channels and declares export-oriented shipyards as export processing zone. Experts hope that this sector will help Bangladesh to create another thrust sector like RMG and IT.

According to a study report in 2011, more than 250,000 skilled and semi-skilled workers are employed in the shipbuilding industry and the average growth of the industry is eight per cent. Bangladesh possesses the second largest ship breaking industry in the world and these breaking industries are generally the main source of materials for shipbuilding yards located all over the country.

Building environmentally friendly ships will keep the demand of ships growing for the world market. The internal demand in national waterways in the areas of service and support craft, supply vessels, port servicing craft, fishing fleets, smaller ships for feeder services etc has been also consistent for years. So, Bangladesh may also pay attention for the market of small and medium sea going vessels for the international market.

Financial Express :: Financial Newspaper of Bangladesh

@UKBengali

 

[UKBengali]

Unfortunately due the EU recession BD has not been able to get much more substantial orders for ships from the European Union over the last couple of years. BD's exports of ships will stay in the low hundreds of millions of dollars for the next couple of years at least.

Another point is that currently no BD shipyard can make any ships greater than around 12-15,000 tonnes in weight. These ships will not sell for much more than 12-15 million each and the profit margin on them is much lower than on larger ships.

Ananda shipbuilding, who along with Western Marine are currently the two shipyards that are the two largest in BD, is in the process of carrying out expansion to allow it to be able to build up to 30,000 tonnes. Not only will this net much more profit per ship but also allow additional orders due the fact that customers can now order ships of larger sizes from BD.

Ananda did have a plan to expand to allow 100,000 tonne ships to be built but this seems to have been shelved for the time being. If BD wants to be able to export billions of dollars worth of ships a year than it will have to have the capability to build 100,000+ tonne ships.

Shipbuilding industry is doing reasonable well with the increase in the orders at home which will only get greater as the BD economy expands and the shipyards are able to build more sophisticated and varied ships, but the export sector does not seem to be doing too well at the moment.

 

[abdullah123]

Unfortunately due the EU recession BD has not been able to get much more substantial orders for ships from the European Union over the last couple of years. BD's exports of ships will stay in the low hundreds of millions of dollars for the next couple of years at least.

Another point is that currently no BD shipyard can make any ships greater than around 12-15,000 tonnes in weight. These ships will not sell for much more than 12-15 million each and the profit margin on them is much lower than on larger ships.

Ananda shipbuilding, who along with Western Marine are currently the two shipyards that are the two largest in BD, is in the process of carrying out expansion to allow it to be able to build up to 30,000 tonnes. Not only will this net much more profit per ship but also allow additional orders due the fact that customers can now order ships of larger sizes from BD.

Ananda did have a plan to expand to allow 100,000 tonne ships to be built but this seems to have been shelved for the time being. If BD wants to be able to export billions of dollars worth of ships a year than it will have to have the capability to build 100,000+ tonne ships.

Shipbuilding industry is doing reasonable well with the increase in the orders at home which will only get greater as the BD economy expands and the shipyards are able to build more sophisticated and varied ships, but the export sector does not seem to be doing too well at the moment.

I read a while ago that Denmark was helping Bangladesh to build components for the ship, like engines. Is that still the case?