Shipbuilding industry in Bangladesh: Points to ponder

Current situation

  • Bangladesh has now over 200 shipbuilding companies.
  • Bangladeshi shipyards can build diversified types of vessels for both inland and sea travel such as Multipurpose vessel, Fast Patrol Boat, Container vessel, Cargo Vessel, Tanker, Dredging Barge, Ro-Ro Ferry, Passenger Vessel, Landing Craft, Tourist ship, Tug, Supply Barge, Deck Loading Barge, Pleasure Craft/ Yatch, Crane Boat, Speed Boat, Deep Sea Trawler, Self Propelled Barge, Inspection Vessel, Cargo Coaster, Troops Carrying Vessel, Double Decker Passenger Vessel, Hydrographic Survey Boat, Pilot boat, Hospital Ship, Water Taxi, Pontoon, Dredger etc. Some shipyards are also capable of manufacturing small warships like large patrol craft, offshore patrol craft, fast attack craft, fleet tanker, even corvette with some expert supervision from the international arena.
  • As per World Trade Organisation (WTO), global shipbuilding market size is US$ 1,600 billion.
  • Two leading local shipyards, Ananda and Western Marine bagged orders to make 41 small vessels worth about US$ 0.6 billion mainly from European buyers (2013).

 

Domestic demand

  • Bangladesh is a riverine country. With the Bangladeshi economy growing at a rate of about 6-8% a year, new smaller ships and cargo carriers are needed to transport goods and other raw materials from Chittagong port to different parts of the country.
  • Hundreds of thousands of people use ferries and steamers to travel from one part of Bangladesh to another, and most of these vessels are built in the country.

 

International demand

  • More than 50% of the world’s ships are more than 20 years old and need replacing.
  • There will be a huge demand for medium sized cargo ships running on green energy in the European market.

 

Market segment (International)

  • Shipbuilding yards in Bangladesh exports small and medium-sized ships for the highly competitive European market. Since 2008, Bangladeshi yards have manufactured and exported ferries, cargo vessels, and ocean-going multi-purpose ships.

 

Competitive advantage of the nation

  • Bangladesh has plenty of skilled manpower and labor cost is cheaper than many other countries. On average, ship owners can save at least 15% of the production cost.
  • Bangladesh’s favorable weather conditions allow us to be more productive compared to shipyards in Europe and other parts of the world.

 

Recommendations for the government

  • Shipyards require long-term easy loans with single digit interests for its high social and economic value addition. The industry looks forward to more government involvement in this regard.
  • The government should prohibit import of second-hand ships.
  • The country’s infrastructure needs to be improved to attract orders for new ships. Shipbuilding requires constant maintenance of proper roads and highways, bridges, port facilities, dredging works and many others to facilitate the heavy engineering and high-tech work.
  • Presence of Quality Management System (QMS) has to be ensured in Bangladeshi shipyards.
  • In addition, investment is needed in research and development to take the industry to the next level to build bigger ocean-going vessels.

 

Recommendations for industry players

  • Now is the time to move one step further and build very big, specialised and hi-tech ships.
  • The shipbuilding industry should turn its focus to building environment-friendly ships. Ships of the future will be emitting very little toxic elements into the atmosphere.

(Various sources)

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