NUR UDDIN ALAMGIR

Although some 50 world-class “Made in Bangladesh” vessels are now operating across different seas and rivers around the globe, the country’s shipbuilding industry is struggling to survive and tap into its vast global market.

Bangladesh is yet to secure one percent of the global market of $200 billion over the decades of manufacturing the vessels, insiders said.

After facing the unprecedented setbacks following global recession, the COVID-19 pandemic, and the Russia-Ukraine war, the industry is regaining some momentum now.

Industry insiders noted that demand for new vessels has been rising sharply since the aging fleets struggle to comply with modern technologies and international regulations.

Shipbuilders across the world are now racing to capitalise on this renewed demand. But, Bangladesh continues to lag behind due to lack of funding and policy support, they stated.

Shipbuilders said India has announced a $75billion fund to support its shipbuilding sector. But, in contrary, a single taka from the fund of Tk2,000 crore Bangladesh government introduced in fiscal 2022-2023 has been disbursed so far for different complexities.

Against this backdrop, entrepreneurs laid emphasis on low-cost long-term special fund at 4.5% interest rate, policy amendments to facilitate “ease of doing business” and introduction of one-stop service for smooth export and import procedures.

Rich History of Shipbuilding

Bangladesh has a rich shipbuilding heritage since far before the British colonial era when locally built wooden ships were exported abroad and available in museum now.

Although the existing shipbuilders primarily served domestic needs for decades, the industry drew attention when the Ananda Shipyard and Slipways Limited of Dhaka exported the first ocean-going vessel to Denmark in 2008.

Later, the Chattogram-based Western Marine Shipyard Limited (WMShL) became the second ship exporter in 2010.

So far, WMShL alone has exported 36 of the total around 50 vessels built for foreign buyers, accounting for over $130 million in revenue from 11 countries.

The sector initially flourished with orders from Germany, Denmark and the Netherlands, maintaining a steady export trend until 2012. It started witnessing downtrend since 2013 after the global economic recession hit, severely impacting Bangladeshi exporters.

The industry faced dire consequence after the Covid-19 affected the world badly in 2020. At that time, the leading shipbuilding nations like China, Japan and South Korea faced severe challenges – with about half of China’s 3,000 shipyards shutting down, insiders said.

The governments of those countries stepped in with massive subsidies and injected several billion dollars for survival of the potential industry.

In Bangladesh, the shipbuilders survived largely by constructing local vessels and cutting costs.

Revival of the Industry Again

In 2023, the industry started reviving slowly ushering in hope again.  

With delivery of a modern landing craft by WMShL, renowned for developing world-class vessels such as warships and patrol crafts, the country resumed export of vessel to foreign buyer in December last year.

They received an order for developing eight vessels – four landing crafts, two oil-tankers and two tugboats, from their old buyer “Marwan Shipping Limited” of the UAE.  

Additionally, WMShL also recently built two passenger vessels for the Bangladesh Inland Water Transport Corporation (BIWTC).

Like WMShL, other local shipbuilders in Chattogram is also either struggling to operate or stopped production due to the crises like fund shortage.

WMShL developed around 150 vessels including tugboat, passenger vessel, fishing vessel, multipurpose vessel, cargo vessel and Ro-Ro vessel for different clients including the Chattogram Port Authority.

Currently, the shipbuilder is working for building 16 vessels including seven for foreign buyers and nine for locals ones. Some 1,000 workers, officials and staff are working at their yard.

Talking to the Daily Sun at their yard located under Karnaphuli upazila on the other bank of the river Karnaphuli, the WMShL Managing Director (MD) Captain Sohail Hasan said the company has developed their yard on a 36-acre of land and spend Tk400 crore for infrastructure development in the beginning.

The investment increased gradually as the business drew attention in home and abroad. But, the repeated global crises put them in severe difficulties, resulting in even loan defaulting, he claimed.

“We have contacted with our clients after resumption of export and they promised to come again. But, there are still major obstacles in Bangladesh,” Sohail observed.  

The MD pointed out that the previous government announced a low-cost special fund to provide the shipbuilding industry with an interest rate of 4.5 percent.

“But, none of the entrepreneurs could avail the fund due to complex terms and conditions. We have requested the present government to grant the fund like our global competitors such as Singapore, Korea, Vietnam and India,” he stated.

He laid emphasis on facilitating “ease of doing business” and providing one-stop-service for facilitating the import and export procedures.

“The country could earn mere $200 million exporting some 50 vessels in seventeen years. The amount is less than 1% of global shipbuilding market of $200 billion,” added Sohail.

“We have the capacity to build all types of ships. But, we are unable to bag the potentials due to lack of fund. With proper financing and land allocation, we can even build larger container vessels with modern technologies, making the country self-sufficient in shipbuilding,” Sohail anticipated.

Karnaphuli Ship Builders Limited (KSBL) Managing Director Engineer Abdur Rashid said they have developed several hundred world-class vessels since in 1994.

Echoing WMShL MD Sohail, Engineer Rashid said India has offered a $75 billion fund for their shipbuilders to grab the current opportunities.

“In contrast, we have to return the loans with 14% interest rate while not a single taka from the Tk2,000 crore government fund reached us,” he said.

“Since it requires one to two years to complete a vessel, loan repayment schedules should begin at least three years after project initiation to give the industry a chance to recover,” he added.

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The writer is the Bureau Chief of Chittagong office, Daily Sun. He can be reached at [email protected]