This is the first part of a two-part series exploring the potential and challenges of the shipbuilding industry in Bangladesh
Export earnings from the thriving shipbuilding industry of Bangladesh has reached a year-on-year growth of 456.88%, in the first half (H1) of the current fiscal year 2017-18 (FY18).
This exponential growth was revealed in data posted by the Export Promotion Bureau (EPB).
According to the EPB data, Bangladesh exported ships and other floating structures worth $30.35 million between July and December of FY18, compared to $5.45 million earnings during the same period in FY17.
According to insiders in the sector, the growing shipbuilding industry of the country has a huge potential, as demand from both the domestic and the international market is increasing faster than ever before.
Meet the top two exporters
There are a total of seven shipbuilding companies in Bangladesh - 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.
Among them, Western Marine and Ananda shipyards are currently leading the export market here.
The EPB data shows that the two shipbuilders exported 40 ships, both small and medium size vessels, worth $170 million, to 14 countries from 2009 to 2017.
Western Marine Shipyard has earned 89% of the export earnings of $150 million by exporting thirty-one ships to Denmark, Germany, Ecuador, Finland, Tanzania, New Zealand, Gambia, Dubai, Uganda, Kenya, India, and Pakistan.
On the other hand, the Ananda Shipyard fetched $20 million in earnings by exporting nine ships to Denmark, Mozambique, and Maldives.
Bangladesh’s stake in an emerging global market
Business Wire, a global economic data analysis agency, has estimated that around $650.83 billion will be spent across the world for procurement of new ships by the year 2026, and the focus will be on building environment-friendly ships.
Meanwhile, the market for small ocean-faring vessels would grow to $400 billion annually.
Industry insiders are optimistic that Bangladesh could achieve at least 1% of the shipbuilding market share, worth $4 billion annually.
As a matter of fact, countries that have cutting edge shipbuilding industries, such as Japan, South Korea, and China, are fully booked for building super-ships and specialized water vessels for the next ten years.
These leading shipbuilders are currently not constructing smaller vessels.
Bangladesh’s shipbuilding industry has an opportunity to take advantage of the increasing demand for smaller ships in the international market.
“If proper policy support from the government is ensured, this industry will be able to seize the opportunity from the global market and will add more value to the economy,” industry insiders told the Dhaka Tribune.