In recent years shipbuilding has emerged in Bangladesh as a substantial means of export diversification. Portraying high potentiality, within a short period of time the industry has made a good reputation in the global market. As many as 40 ocean-going ships have been exported to various parts of the world in the last 10 years which has fetched us remittance of about Tk 12.0 billion. Export destinations of the ships include Mozambique, Denmark, Finland, Germany, Pakistan, Tanzania, Ecuador, Uganda. Besides, 18 world-class Cutter Suction Dredgers have been constructed and delivered to the Bangladesh Inland Water Transport Authority (BIWTA) and Bangladesh Water Development Board (BWDB).
The shipbuilding sector of Bangladesh complies with the Prime Minister’s Vision 2021 (MIC) & Vision 2041 (Developed Country) objectives. Completing all significant infrastructure works, development works, and logistics-related jobs are the key to achieving the Vision 2021 and Vision 2041 and meeting the UN Sustainable Development Goals (SDGs). It is the shipbuilding and heavy steel engineering industry of Bangladesh which is capable of addressing these works in an efficient manner. The optimistic projection puts the export earnings by the export at about $2 billion annually in the five years’ time and much more in in the years beyond. According to industry people, the global market for small vessels (3,000 to 12,000 DWT) is about $400 billion with China, India and Vietnam as the main competitor to Bangladesh.
At present 10,000 inland and coastal ships and 36 foreign going ships are plying all over the country, which carries more than 90% of total oil product, 70% of cargo and 35% of passengers. More than 150,000 skilled and semi-skilled workers are employed in this labor-intensive sector. Further, the expansion of maritime boundary leading to the emergence of the Blue Economy is another area of high potential benefits which will be possible to reap if the shipbuilding industry is nurtured for sustainable growth and development. Although Bangladesh was traditionally known for export of jute, tea and ready made garments, in the last 10 years it has attracted attention of many foreign buyers in shipbuilding. Two million people are related directly or indirectly with the shipbuilding industry. Shipbuilding is a growing industry in Bangladesh with great potentials.
It may be noted that the life cycle of a shipyard is approximately 200 years, and the shipyards of Bangladesh are only 12 years old. What the sector has achieved in this very brief span of time is impressive. Besides exports, meeting local demands by our local industry also deserves serious consideration.
|Summary of Bangladesh Shipbuilding Industry
|Number of Companies
|Number of Yards
Traditional market leaders of world shipbuilding industry are over-booked mainly for construction of large ships and they are not interested in building small scale ships leaving a golden opportunity for countries like Bangladesh which can make ships up to 12,000 DWT (dead weight tonnage). High speed Shipbuilding and Engineering Company Ltd, the country’s oldest shipbuilder, will sign the deal with Groningen-based Hollander Scholtens (HS) to build 9,000 tones capacity eight ships by April 2012. High speed Shipbuilding and Engineering Company Ltd. the country’s oldest shipbuilder specialized in building small riverine cargo and passenger vessels will be the third company to join the boom in ocean-going shipbuilding industry. Ananda Shipyard and Slipways Limited based at Meghnaghat and Western Marine in Chittagong have already bagged export orders worth $280 million since the country emerged as a new global destination of shipbuilding last year. The latest export order came, as Bangladesh has become a new destination for construction of small sea vessels, with an annual market of $400 billion, as traditional shipbuilding nations such as South Korea, Japan and China now focus on large vessels. An expert said the latest order proves that the country is very much on the path to become a major ship-builder.
According to shipyard industry sources, there are some 70 shipbuilding firms in Bangladesh. The main market players are below:
|Western Marine Shipyard
|Ananda Shipyard and shipways Limited.
|Narayanganj Engineering and Ship Building
|Khan Brothers, Karnaphuli Shipyard,
|High Speed Shipbuilding and Engineering Company Ltd
Bangladesh has a distinct advantage in shipbuilding and the most important ones are:
- Bangladesh has a quickest learning workforce perhaps in the entire world. Bangladesh is a biggest source in the world for shipbuilding workers. There are more than 20,000 steel ships built in Bangladesh and plying in the inland waters. This industry has created a huge pool of semi-skilled workers. These workers can be quickly trained to the skill required for shipbuilding of international standard. Shipbuilding industries in Singapore, Dubai are based on Bangladeshi workforce. They are diligent, hardworking, and intelligent and dedicated. Right wages in due time is only they ask for.
- In the recent few years, the country has experienced many bright professionals emerging in industries and business houses equipped with modern tools. Shipbuilding is a complex function and a successful shipbuilding required a good planning exercise to ensure that every element of the ships is built not only perfectly but also in a coordinated sequence. Management professionals and engineers of the country are quite capable of performing the same with some training or education.
- The professionals of the country possess better skill of communication compared to many competing countries, especially China and Vietnam. This will help smooth interaction with the ship owners and impressing the owners will be easier.
- Although the industrial entrepreneurship history of the country is recent, but the entrepreneurs have demonstrated extraordinary capability in this job. Most of the entrepreneurs of the country are first generation businessmen and they have risen to a level which can perhaps not be seen in any country of the world, rich or poor. This skill and courage will facilitate in taking Bangladesh to the center stage of shipbuilding in a span of 5-10 years
- The cost of the labor is low, especially when compared to skill. In other works, best combination of sill and cost.
- Bangladesh possesses a very efficient and educated pool of engineers and technicians for shipbuilding. Many experts working in Singapore are eager to return to the country even if paid much smaller salary.
- The Government is playing a very proactive role for promotion of shipbuilding
- Bangladesh has the most liberal policy for Foreign Direct Investment making the country most attractive for foreign investors. This includes easy withdrawal of investment, repatriation of profit, avoidance of double taxation etc.
Shipbuilding industries in Bangladesh have already exported ocean-going cargo vessels and more export orders are being executed. The delivery value has exceeded 100 million USD mark. The shipbuilding industries in some of the competing countries are supported by up to 30% government subsidies. In Bangladesh, the Government has just introduced 5% subsidy. Even without the subsidy, the shipbuilders in Bangladesh had been doing well because of better productivity. Currently the extent of value addition in the shipbuilding industries is 35%. This share may rise to more than 50% will little effort and the competitiveness of the shipyard will be even stronger. This makes the country is very prudent destination of investment in the shipbuilding industry both in form of setting up shipyard or placing orders for ships.