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‘Bangladesh gaining global recognition as a shipbuilding nation’

  • Published at 12:38 am May 25th, 2018
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Md Shakhawat Hossain

In recent years, the fast-growing shipbuilding industry in Bangladesh has emerged as a significant means of export diversification. In a short period of time, this high-potential industry has made a good reputation in the global competitive market. In an interview with Dhaka Tribune’s Rafikul Islam, Managing Director of Western Marine Shipyard Ltd, Engineer Md Shakhawat Hossain discussed the history, current situation and the future prospects of the shipbuilding industry

How did shipbuilding become an industry in Bangladesh?

Our introduction to the shipbuilding market was back in the late 2000s. Initially, a few small boats would be exported to Mozambique and a few others to the Maldives, but the major turning point came when Bangladeshi shipyards started receiving orders from Europe.

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.

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.

Some shipyards had to start from scratch, and others enhanced their capacities to turn themselves into a fully-fledged world class shipyard.

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.

What are the future prospects of the shipbuilding industry and Western Marine?

In my opinion, other than the IT sector, shipbuilding is probably the most promising export-oriented industry in our country. We are very optimistic about our future prospects. There has been an increased demand of various kinds of vessels worldwide, and Bangladesh is a lucrative destination in this market.

The Bangladeshi shipyards concentrate on building medium sized cargo vessels within 12,000 DWT capacity, 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 statistical data, there will be a huge demand for medium sized cargo ships running on green energy in the European market very soon. Recently, Western Marine has already secured an order for an LNG driven cargo vessel from Norway.

At the same time, demand for utility vessels such as tugs, offshore vessels or fishing trawlers are on the rise all over the world. As Bangladesh has proved itself to be a new and favourable destination for building these vessels, many foreign buyers are knocking on our doors.

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.

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. 

How should the government provide support to tap this growing industry?

Shipbuilding is a sophisticated and a heavily tech based industry with the prospect of huge economic and social benefits. This industry offers massive job opportunities, industrial development, a steady flow of foreign revenues and many other opportunities for this country. Hence, the government should come up with policies to support and promote this growing industry.

Most importantly, shipbuilding has been recognized as a heavy-tech based industry all over the world, which builds a positive image for Bangladesh. But where shipyards in other countries enjoy the lowest interest rates for developing their yards and executing their shipbuilding projects, Bangladeshi yards are still fighting to sustain in the industry.

Since huge investments are needed in the capital intensive shipbuilding industry, the government must work out a policy for the provision of long term loans at lowest rates of interest to ensure sustainability in this massive and competitive international market.

Why is Bangladesh such a lucrative destination for building ships? What are the advantages of building them in this country?

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.

Secondly, we have a skilled and cost-effective workforce with expertise in building ships. Also, since our country is a riverine country, we have the advantage of building yards on river banks- a prerequisite for any shipyards since they need to create access through waterways to deliver a ship to its destination. 

Last, but not the least, our favorable weather conditions allow us to be more productive compared to shipyards in Europe and other parts of the world.

If the environment is impacted by ship-breaking, then how are you going to save the country’s environment?

Before I answer this question, firstly, we must differentiate between shipbuilding and ship-breaking.

Shipbuilding and ship-breaking are two different industries. One builds new ships, whereas the other breaks the ships to scraps, which could be harmful to the environment if certain compliances are not met.

No one can disagree that ship-breaking has major negative environmental impacts. However, I am hopeful that due to the recent government interventions, breaking yards will take preventive measures to reduce adverse effects on the environment.

I, myself being a shipbuilder, can ensure that the shipbuilding industry is not harmful to the environment at all. We are a shore based industry. We only come in contact with the water once a ship has been fully built and launched in the river. No harmful chemicals are used which can cause water or air pollution.

Furthermore, the facilities inside shipyards are “asbestos free”. Western Marine shipyard is a BV certified ISO 14001: 2004 industry, which emphasizes favourable working environments- something which would never have happened if we were not environment friendly.

How can the Bangladeshi shipbuilding industry build a global reputation?

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.

We have covered most of the major destinations in the world which includes Europe, S.America, New Zealand, Asian subcontinent, Middle East Asia and East & West Africa. So far we have not received any major warranty claim from any of our buyers, this is our reputation in the global competitive market due to which new buyers are directing their shipbuilding queries to us.

What are the challenges that our country’s shipbuilders have to face?

Our primary challenge is the high cost of funds. Shipyards require long-term easy loans with single digit interests for its high social and economic value addition.

Secondly, we also have logistics challenges because heavy industries like shipbuilding require constant maintenance of proper roads and highways, bridges, port facilities, dredging works and many others to facilitate the heavy engineering and high-tech work.

We are contributing to the economy by meeting diversified domestic demands for increased growth, increased domestic and international trade and most importantly, capacity build-up. A shipyard is the only industry which has a capacity for heavy steel engineering for any mega construction works like bridges or offshore platforms. If we do not receive financial support for the government, like easy loans with low interest rates and long term payment terms, it will be impossible for us to compete in the global competitive market.