The market expects to grow $400 b by 2026
Md Joynal Abedin Khan: The emerging ship business of Bangladesh has gained international popularity for exporting to abroad in recent years, in addition to enlarge a new item in export list.
The fast-growing shipbuilding industry has turned into a high-potential sector following a good reputation in the global competitive market.
Bangladesh already has proved itself to be a new and favourable destination for building vessels, including tugs vessels, offshore vessels and fishing trawlers, Shipping Ministry sources said.
Now shipyards companies are exporting their ships in different countries in the world. The country is likely to reach in a new high as many foreign buyers are knocking on our doors day by day, they said.
Our introduction to the shipbuilding market was back in the late 2000s. The potentiality has been raised as the country’s shipyards companies has received orders for vessels from Europe, Asia, Africa and rest of the world for few years. At present, we are building 38 ships for India, Norway and the Netherlands, and we are also taking orders for some government and local owners inside the country. Recently, we have delivered two cargo vessels to India, an offshore patrol vessel to the Ministry of Fisheries of Kenya and a landing craft to the UAE, they added.
Bangladesh has over 200 shipbuilding companies, largely concentrated in Dhaka, Chittagong, and Narayanganj. Seven of these are incorporated companies: Khulna Shipyard Ltd., Western Marine Shipyard Ltd., Ananda Shipyard Ltd., Chittagong Dry Dock Ltd., FMC Dockyard Ltd., Karnaphuli Shipyard Ltd., and Ready Point Shipyard Ltd. Western Marine dominate the market, with an 89 per cent share of the exports, they further said.
Recently, the Ministry of Industries has drafted the Shipbuilding Industry Development Policy 2019, including policies such as a 10-year tax break, cheaper financing, and cash incentives. The government has also been considering the development of a $0.59 billion special fund dedicated to the advancement of the industry, they added.
Over the past 10 years, over 40 ships have been exported, resulting in exports of over $180 million. Major international destinations include African countries like Mozambique and Gambia, as well as countries like Germany, New Zealand, and Pakistan, they stated.
The market for small ocean-faring vessels is expected to grow to $400 billion by 2026.The demand in the global market for ships are directly related to the economy and its growth. As ships are used for commercial purposes, the level of business and maritime shipping needs is where the demand for ships is derived, as per data of Export Promotion Bureau.
Large manufacturers in the shipbuilding industry, such as China, Japan, and South Korea, are more focused on the construction of large vessels, and make up nearly 90% of the ships built annually. The three Asian giants focus on large vessels above 50,000 Dead Weight Tonnage (DWT), and Bangladesh is focused on utility vessels or ships smaller than 12,000 DW, according to them. Recently, the Ministry of Industries has drafted the Shipbuilding Industry Development Policy 2019, including policies such as a 10-year tax break, cheaper financing, and cash incentives. The government has also been considering the development of a $0.59 billion special fund dedicated to the advancement of the industry it unveiled.
The global ship recycling industry has been mainly concentrated in Bangladesh has been a prominent ship-recycler and emerging ship-builder, said a study of United Nations Conference on Trade and Development (UNCTAD) in 2019.
Due to lower labor costs and a high proportion of usage of steel from recycled ships in domestic manufacturing, the ship scrapping segment of the maritime supply chain is dominated by the developing countries. By dismantling 236 ships in 2019, the country took the lead position in ship breaking. 47.2 percent of the ocean-going vessels were dismantled by Bangladesh, followed by India with 25.6 percent, Pakistan with 21.5 percent, Turkey with 2.3 percent and China with 2 percent.
Rafikul Islam, Managing Director of Western Marine Shipyard Ltd, said that current situation and the future prospects of the shipbuilding industry is boosting day bay day.
Vessels called multi-purpose cargo ships were ordered by German and Danish buyers. From 2008, upon exporting these ships to Europe, Bangladesh came to be recognized as a shipbuilding nation, he said
Our expertise in domestic shipbuilding was an advantage for us while positioning us in the international market. We already had technical knowledge on how to build in-land and coastal vessels for commodity transports in the domestic market, he added.
Even the government of Bangladesh recognized us as a major industry for export diversification. This industry was declared as the “thrust sector” due to its potential in the export business, he mentioned.
The Bangladeshi shipyards concentrate on building medium sized cargo vessels within 12,000 DWT capacities, and various utility vessels. This means that instead of competing with major shipbuilding countries such as Japan, South Korea or Singapore, who concentrate on building big vessels above 50,000 DWT, Bangladesh focuses on a very specific segment of the market, according to him.
It is our pride that we (Western Marine) have recently won the award “Best Large Patrol Boat” by Work Boat World in 2017 for exporting the hi-tech offshore patrol vessel “Doria” to the Ministry of Fishers in Kenya, he added.
Our main advantage in building ships is the presence of Quality Management System (QMS) in Bangladeshi shipyards. A full-fledged shipbuilding facility without QMS cannot be competitive in the long run. We are proud to say that Western Marine is an ISO 9001: 2015 certified yard, which means we ensure the best quality in our workmanship, he added.
We have made our reputation from our Quality Management System (QMS). Our quality system allowed us to deliver the best products to our clients which are now sailing across the world. We have delivered ships which today sail in Pacific, Atlantic, Baltic sea, Gulf & the Indian Ocean, according to him.
Director General of Department of Shipping Commodore A Z M Jalal Uddin, PCGM, ndc, psc, said they have digitalised the whole process, including, registration, survey and selection of surveyor to run the department smoothly.