Govt to assist Bangladesh ship builders assured
Shipping minister Shajahan Khan yesterday said that the government was ready to give full logistic support to shipbuilders to ensure that the industry flourished considering its export potential.
The government had already taken some initiatives to help the shipbuilding sector, he said while addressing a seminar as chief guest on the ‘National Shipbuilding Conference’ held at the Pan Pacific, Sonargaon Hotel yesterday.
The event is organised by the Bangladesh Foreign Trade Institute (BFTI), a non-profit research and training institution built on the concept of public-private partnership.
It is one of the four components of the Bangladesh Trade Support Programme (BTSP).
The conference marks the end of the BTSP, which has been funded by the European Union over the past four years to the order of 7.8 million Euros, and has been implemented by the Ministry of Commerce of Bangladesh.
The shipping minister was happy that the shipbuilders had already exported some quality ships to a foreign country.
“Thousands of locally built ships ply its inland waters. The country has a history of supplying ocean-faring vessels to European countries. It is also a great opportunity for us,” the minister added.
The appearance of clear signs that the world economy was on the road to recovery will provide challenging opportunities for the Bangladesh shipbuilding industry to make its mark, but the key to achieving success lies in preparing today,” he said.
Professor M A Taslim, CEO, BFTI, welcomed the guests. Stefan Frowein, Head of the European Commission delegates to Bangladesh and Einar Hebogaard Jensen, Danish Ambassador to Bangladesh, were present as special guests at the conference.
The Danish Ambassador said that he was satisfied with the achievement so far and was hopeful that “Made in Bangladesh” would become a trusted name and would be regarded as a serous alternative to the ship-building industry in neighbouring countries like India, Vietnam and China.
Professor Khabirul Haque Chowdhury head, Department of Naval Architecture & Marine Engineering of BUET, presented his keynote research paper on “Transformation in Research and Technological Development and Innovation in Shipbuilding Industry and the Implications for Shipbuilding competitiveness.”
He said that the ship building in Bangladesh had evolved from traditional methods into a modern industry capable of competing successfully in the international markets.
“If it is to convert the recent world downturn into an opportunity, it must begin now to ensure that it develops the most accommodating and enabling environment, where there is sufficient skilled labour, compliance with international class standards, easy access to affordable raw materials, efficient import and export processing mechanisms, investment in infrastructure, research training and technological development and appropriate financial incentives. Networks, clusters, suppliers, trade organisations, financing institutions, civil society, the government and public and private sector bodies must work together to achieve a common goal,” he added.
Dr. Abdullahel Bari, Chairman, Ananda Group, and Sakhawat Hossain Managing Director of Western Marine Shipyard Ltd., the top shipbuilding organisations of Bangladesh, presented their papers.
General Manager of Bangladesh Bank Razee Hasan presented his note on growth and future plan and financial policy for the shipbuilding industry from a bank’s perceptive.
K M Mahmood-ur-Rahman, president of the Bangladesh Shipbuilders Association asked for support from government and FDI investment.
S: http://www.theindependent-bd.com/
Bangladesh Shipbuilding industry ‘can be 3rd largest export earner in 10 years’
The country’s shipbuilding industry could become the third largest foreign exchange earner in less than ten years if the government provides support services of issues relating to bank guarantees, access through green channels and declaring export-oriented shipyards as export processing zones (EPZs).
This was revealed in a study on shipbuilding industry in Bangladesh: current position and prospects for future growth conducted by the Bangladesh Foreign Trade Institute (BFTI), a non-profit research institution.
“The government should not dwell over these decisions too long as India and Indonesia are increasing their own ocean-faring vessel capacities,” the study, which is likely to be presented at the country’s first-ever BFTI national shipbuilding conference to be held on September 29.
The study said the ship building industry in India had grown from Rs 10.17 billion in 2002 to Rs 36.57 billion in 2007 as a result of government support over those five years, with sales increasing to Rs 52.83 billion in 2008.
The report said: “This confirms that government can play a crucial role in setting up an enabling environment for the Bangladeshi shipbuilding industry.”
However, the study said bank guarantee constitutes a very significant portion of the total project cost saying the local shipbuilders are paying approximately 7.6 per cent of the total contract value for obtaining bank guarantees.
“If the government could provide bank guarantee through the Bank Bangladesh, this cost could be reduced significantly,” the report added.
The government has already granted the industry a partial green channel status. In terms of the current provisions no customs duties are payable on imports of raw materials and components for use in shipbuilding.
The study said: “Granting full green channel status to export-oriented shipbuilders will not place any additional burden to the government, but will save the industry 0.9 per cent of the contract value.”
The report advocated that the shipbuilding yards be declared export processing zones saying: “This would imply that all sales made to such shipyards will be deemed to be export sales.”
Technology plays a major role in the industry and the industry is required to purchase basic drawings at an estimated cost of US$ 200,000, according to the study.
“Considering the importance of this technology, the government may consider subsidising the acquisition of technology, for instance, by undertaking to pay a certain percentage of the cost of acquiring such technology,” the study added.
Currently ship builders have to import virtually all materials required, which constitutes nearly 65 per cent.
If a contract for a shipbuilding is worth $28 million, material imports constitutes around $ 18.2 million.
S: The Financial Express
20 Danish shipbuilders to explore joint venture in Bangladesh
A delegation of more then 20 Danish companies will visit Bangladesh next month to explore possibilities for setting up joint-ventures in shipbuilding.
“The aim of the visit, which takes place from November 8 to 13, is to set-up joint ventures in shipbuilding between Danish and Bangladeshi companies, said Morten Siem Lynge, Business-to-Business coordinator of Danish Embassy in Dhaka Thursday.
The visit is taking place at a time when the country’s ocean-going shipbuilding industry has been hit by global recession as orders worth hundreds of millions of dollars have either been cancelled or put on hold.
“At the moment, more than 20 Danish companies have shown their interests to visit Bangladesh and look for local partners,” Morten told the FE in an interview.
“It is true that buyers are now taking less, cancelling orders or putting them on hold due to global recession. But things will change when the recession is over and Bangladesh has to be ready for that.”
He said ships have to be built in recession times, and Bangladesh can actually benefit from this.
“Bangladesh has done exceptionally well amid recession. It is still building new ships and the number of orders will certainly go up once the global economy recovers.”
Experts said the country has become a new destination for companies seeking to build small ocean-going vessels as traditional shipbuilding nations such as South Korea and China now focus on building large ships.
Even Vietnam, which is relatively new in shipbuilding, is no longer interested to build small ships weighing 4,000-25,000 tonnes, Morten said.
Denmark, which has long tradition in shipbuilding, is now less active in this area due to high production cost. However, a very large number of high quality component and service suppliers for shipbuilders are still very active in Denmark, Mr Morten said.
He said low labour cost, which is one of the cheapest in the world, has also made Bangladesh a new destination for companies seeking construction of small ocean-going vessels.
Danish companies are interested to build ships here because it is at least 15 per cent cheaper compared with other countries, he said adding Bangladesh is the cheapest place in the world for building new ships.
He said 55 per cent of the world’s ships below 20,000 dead weight tonne (DWT) are at least 20 years old and they have to be replaced sooner or later.
Morten said Bangladesh imports 90 per cent of the components needed to build ships. But the local companies can cut cost further and secure a more timely delivery of components if they manufacture components locally through joint venture with overseas companies.
“Many Danish companies, which manufacture components, are willing to go for joint venture in Bangladesh,” Morten said.
The shipbuilding sector, which is hailed as the next industry leader after garments with potentials to earn billions of dollars, will create jobs for thousands and help grow many other allied industries, he added.
Local shipbuilders have termed the upcoming visit of the Danish manufacturers as a positive news for the country’s nascent industry.
“This visit will broaden our business prospect,” said Sakhawat Hossain, managing director of Western Marine Shipyard, the country’s one of the largest shipbuilders.
He told the FE: “I think we have overcome the crisis, as it is evident from the interest shown by the global shipbuilders.”
“The demand for small sea-vessels has also increased due to the economic crisis, and we are ready to take this opportunity,” he added.
S: The Financial Express
Bangladesh to emerge as ‘leader in shipbuilding sector’
The country’s emerging shipbuilding industry is capable to fare well in meeting the demand for sea vessels as more than 50 per cent of the existing ships will have to be replaced due to aging, said the Danish Ambassador in Dhaka Tuesday.
Ambassador Einar H Jensen said 25 per cent of the aging ships that would be gradually replaced are small and medium size vessels and Bangladesh could emerge as a leader in Asia in this sector because of lower costs.
“There is no doubt that ships built in Bangladesh are of good quality,” he said while addressing the inaugural session of a national conference on ship building as special guest at Hotel Sonargaon on Tuesday.
The Danish envoy said the industry is still dependent on import of raw materials to build ships of different categories. Such dependence can be removed if the government extends its support to the industry, he added.
He said in order to meet the growing global demand that is recovering from recession, the country should focus on developing the ship building industry. He stressed the need for reducing corrupt practices and meeting eight important compliance standards on ship-building including security and safety of the workers to get a foothold in the global market.
Ambassador Einar informed the conference that some 20 Danish shipping companies will visit the country soon to explore the potentials of buying ships.
The conference, which was organised by Bangladesh Foreign Trade Institute (BFTI) was also addressed by head of European Commission Delegates Stefan Frowein as special guest.
Among others, President of Ship Builders Association KM Mahmood ur Rahman, BFTI head MA Taslim and Dr Abdullahel Bari of Ananda Group and Sakhawat Hossain of Western Marine Shipyard spoke.
Prof Khabirul Haque Chowdhury, head of Naval Architecture and Marine Engineering Department of Bangladesh University of Engineering and Technology (BUET) presented the keynote paper.
Stefan Frowein focused on trade relation between Bangladesh and European countries and said export of diversified products from Bangladesh was worth 4.3 billion Euro taking trade relations in favour of the country.
“It is likely to expand with the emergence of ship building industry,” he added.
In the keynote paper, the BUET Prof claimed that the country has the capacity to be recognised as a ship building nation due to some advantages including a good number of shipyards, training and research facilities, cheap labour force with experience of international market.
“Bangladesh can be one of the top 10 ship building countries of the world,” he said.
The keynote speaker said recession has increased the demand for small and medium sized vessels compatible with the country’s capacity and stressed the requirement for formulating a national ship building strategy and integration of facilities of ship building.
President of Ship Builders Association KM Mahmood ur Rahman said ship building industry is not only a thrust sector for Bangladesh it is also a thrust sector of the world. This market size is US$ 400 billion which is likely to increase with the recovery of global slowdown.
S: The Financial Express
Shipbuilders may change Bangladesh economy
Industries Minister Dilip Barua said yesterday shipbuilding, which is a very labour-intensive industry, has the potential for generating a huge foreign currency and developing extraordinary skills in the field of engineering.
“The country has skilled and semi-skilled professionals as well as necessary ingredients to be a shipbuilding nation. So the industry holds the potential for transforming Bangladesh into a middle-income country in near future,” Barua said.
He was speaking as chief guest at a function organised by Ananda Shipyard and Slipways Ltd, one of the leading local shipbuilders, as it formally handed over its eighth ship, Stella Moon, at $7.5 million to a Danish buyer, Stella Shipping P/S.
The function took place at the company’s office at Meghnaghat in Sonargaon under Narayanganj district.
“The company has so far secured export orders for 34 ships at $373.50 million. It has received export proceeds and advance payments of $48.54 million. Denmark, Germany, Norway and Mozambique have placed the orders,” said Ananda Group Chairman Dr Abdullahel Bari at the ceremony.
Earlier Ananda exported its first ship Stella Maris to another Danish company at $6 million on May 5 last year and six others to the Mozambique government at $6.2 million on November 13, said the company officials.
The officials also said they are now building 10 ships of which six have been ordered by Komorowski and four others by Wessell, two German companies.
“We hope to deliver the ships within the next three years as the construction works are going on in full swing,” said a company official.
Stella Moon has 64 TEUs (twenty-foot equivalent units) container carrying capacity with 2,950 deadweight tonnages.
Deadweight tonnage, also known as deadweight (DWT), is a measure of how much mass or weight of cargo or burden a ship can carry safely.
DailyStar
Shipbuilding can play significant role in boosting economy
Local shipbuilders, who have already made a mark in wooing foreign buyers, said Bangladesh has a marvelous opportunity to earn huge foreign currencies by building and exporting ships.
“If the government patronises this prospective sector, it can play a significant role in giving a boost to the national economy,” said Karnaphuli Shipbuilders Ltd Managing Director MA Rashid, appreciating the present government’s positive approach to the sector.
He said marine vessels, ferries, cruise ships, fishing boats and launches are built in the country’s coastal belt and the offshore islands, but the potential of this sector still remained untapped simply for lack of visionary entrepreneurs, favourable atmosphere and government support.
“We can raise GDP (gross domestic product) by at least 3 percent within the next six years if we’re given an encouraging environment,” he added.
Industry insiders said the shipbuilding industry will be the driving force of another socio-economic uplift in the country after the RMG-driven revolution in the 80s, as it can create huge jobs at shipyards and its backward linkage industries.
The annual turnover of the global shipbuilding industry is around $1,522 billion. European shipbuilders stopped taking orders until 2010, while Asian shipbuilders in Korea, Japan, China, Singapore, Malaysia and Vietnam have already received adequate export orders.
It is assumed that over $300 billion worth of export still remain untapped and local ship-making companies can grab this opportunity.
“This is a new but bright sector for us. So, it deserves a special consideration. The government will provide all necessary supports to this sector for its growth,” Industries Minister Dilip Barua told the news agency.
Meanwhile, Export Promotion Bureau (EPB) has recommended giving priority to the shipbuilding industry in the upcoming three-year import policy. It also recommended a plan to bring down bank interest rate to eight percent and simplify the import procedures of raw materials for the shipbuilding industry.
Sources said Western Marine Shipyard Limited has so far received orders for manufacturing five seagoing cargo vessels from a Danish company.
Another two shipbuilders — Ananda Shipyard Limited and Slipways Shipyard Limited — are also doing a good business.
Chairman of Western Marine Shipyard Md Saiful Islam said Bangladesh has a competitive edge on shipbuilding for having efficient and cheap labour force.
Referring to a problem, he said the country has an image crisis in the western and developed countries, adding: “We can rebuild the image with a flagship industry such as shipbuilding.”
“Shipbuilding is a heavy industry and also highly technical. Bangladesh can be turned into a shipbuilding nation from a ship-breaking one,” Saiful mentioned.
Entrepreneurs said having international certification and accreditation from the Germanisher Lloyd and Norske Veritas are a must for a country to grow as a shipbuilding nation.
“In most cases, international certification depends on the vessel’s design, craftsmanship, interior and exterior decoration, utilities, security and safety features what are again directly linked to the international suppliers of the vessel components,” an official of the country’s biggest private shipyard said demanding a favourable import policy for the budding industry.
Referring to Vietnamese investment in shipbuilding over the last decade, officials said Bangladesh has a competitive advantage over its Asian competitors because of its cheap and able workforce.
They think it is high time to tap the potential and urged the government to provide the industry required moral and infrastructural support.
Western Marine Shipyard has so far built 55 vessels. The vessels acquired certification from the international classification companies.
UNB, Dhaka
Bangladeshi Local firm to build 10 ships for Japan
Highspeed Shipbuilding & Engineering Co, a Bangladeshi local shipbuilder, has won a US$50 million order from Japan to build ten small ships, further evidence of the country’s booming shipbuilding industry.
This is the first time the country has won a Japanese contract and underlines the increasing global acceptance of Bangladesh as an emerging shipbuilding nation. The buyer is Japan based Tokyo Freighting Ltd, a shipping company. The agreement was signed on Wednesday in Dhaka. “Since the Japanese firm is very conscious about standards and compliance, Tokyo Freighting experts will constantly supervise the overall manufacturing of these ships,” said KM Mahmudur Rahman, managing director of Highspeed Shipbuilding & Engineering, who signed the deal with Shigeki Date, managing director of Tokyo Freighting.
As per the agreement Tokyo Freighting Ltd will also provide technical support to Highspeed in developing its Narayanganj dockyard, in line with Japanese standards. Highspeed, which is to invest around US$ 5 million in the coming months to upgrade the manufacturing facility of its dockyard, will supply the ships by October 2010. Shigeki Date, managing director of Tokyo Freighting Ltd, along with Executive Director Yoshiteru Ikeda visited Highspeed dockyard recently and expressed their satisfaction, as it is well equipped with modern machinery. Manufacturing of the first four ships will start by December this year and will be delivered to Tokyo Freighting by March next year. The size of the ships, including dry cargo carriers and oil tankers, will vary from 2,000 tonnes to 4,000 tonnes. The Japanese company will supply all raw materials and other equipment.
Rahman said Japanese manufacturers are currently outsourcing small ships, as it is not cost effective now to manufacture them at huge dockyards. “It is a great development for the country’s shipbuilding industry as Japan, the most advanced shipbuilding nation in the world, starts building in Bangladesh. It may inspire other advanced shipbuilding nations to come to Bangladesh,” Rahman hoped. Currently local shipbuilders including Ananda Shipyard and Western Marine Shipyard are working on about US$ 400 million worth of orders for over 40 vessels for buyers from Germany, Denmark, Netherlands and Mozambique. The success of these two companies have encouraged other local companies such as Meghna Group of Industries, Rangs Group, Khan Brothers and Narayanganj Engineering & Shipbuilding to jump on the bandwagon of global shipbuilding market.
Behind the current boom of the industry is the global rise in the demand for new ships, especially smaller ones with a capacity below 15,000 dead weight tonnes (DWT). This has helped Bangladesh attract the attention of international shipping companies as traditional shipbuilding countries such as Japan, China, South Korea and Vietnam are not interested in building ships with under 20,000 DWT.
jasim@thedailystar.net http://www.thedailystar.net/story.php?nid=41981
Bangladesh Shipbuilding industry now a promising sector
The shipbuilding industry in Bangladesh is now becoming a promising sector as it has signed several contracts with Danish investors to build multipurpose vessels. On at least two instances, Danish shipping interests recently have placed substantial orders with Bangladeshi shipyards. Ananda Shipyard in Meghna Ghat and CS and Partnere A/S, a Danish ship consortium, have signed a agreement to build a ship, said a press release.
The first ship – a 2,900 DWT multi-purpose vessel currently under construction at Ananda Shipyard and will be delivered in early 2008 – is the first of a series of up to 14 ships ordered by the Danish investors.The second order landed by a Bangladeshi shipyard was when Western Marine in Chittagong signed a contract to build up to 5 multipurpose vessels (4,100 DWT) to be delivered to a Danish ship consortium. ‘The two orders have positioned these shipyards as serious players in the international shipbuilding industry in strong competition with Chinese and Vietnamese shipbuilders, said Danish Ambassador to Bangladesh Einar Hebogard Jensen. ‘In order to live up to the highest international standards to design ship and to obtain international accreditation from bureaus such as “Germanisher Lloyd” and “Norske Veritas” it will be important for the shipyards to be able to import various fittings and components necessary for the ships to reach an international standard,’ Einar commented. “To live up to export requirements, it will be essential that a mechanism can be introduced for facilitating an easy clearance of such fittings and components when imported. A “Green Channel” like in the textile industry could probably provide necessary flexibility for the involved parties,” the ambassador said.
The Ambassador continues: “To our knowledge, Ananda Shipyard and Western Marine are breaking new grounds in Bangladesh in their endeavours to succeed in these projects. The orders obtained will be instrumental in bringing Bangladesh into the picture as a serious player for building ships for the international shipping market. He also added that a number of potential ship owners are watching closely the development of the Ananda Shipyard and Western Marine projects.“If these assignments prove successful, the ship building industry in Bangladesh will play a very important role in future competition against ship building nations like Vietnam and China,’ the diplomat mentioned. He also claimed that successful shipbuilding ventures will have a tremendous positive impact on job generation, technology transfer and export revenues, and help Bangladesh to create another ‘thrust’ sector like export-oriented readymade garments and textiles and IT.
Source: http://www.newstoday-bd.com/business.asp?newsdate=11/15/2007#5260
