Bangladesh gearing up for big time shipbuilding

Shipbuilding industry in Bangladesh gets a huge boost as two of the country’s biggest conglomerates announced their entry into the booming sector. Meghna Group, the commodity to power conglomerate, and Rangs, the real estate to sea-fish giant, said they are going into ocean-going ship-building industry amid boom in orders from the European ship companies.

Meghna, a leading group of companies with a turnover of Tk 40 billion ($583 million), said it would build the country’s biggest shipbuilding yard at a cost of $35 million with technical help from South Korean shipbuilder STX Heavy Industries. Afzal Hossain, a general manager of the company, said: “Already we have huge land at Meghnaghat on the river Meghna. We will initially build 2,500 DWT ocean going bulk carriers for our company and also for European buyers.”

Afzal said Meghna would also procure all its machinery from the STX but it does not have any plan to go into joint venture with the South Korean shipbuilder. “Our aim is to build the biggest ship building company in the country. And that?s why we are signing technical and machinery deal with one of the top companies in the world.”

Rangs Group, which owns one of the oldest shipyards on the river Karnaphuli near the Chittagong Port, has signed a joint venture deal with a local consortium to build ocean going vessels for a big Dutch buyer. The joint venture is now transforming Rangs’ Fisheries Shipyard into a top class ship manufacturing facility, ready to manufacture ships within months, said Abdul Hannan, a general manager of the company.

“We will initially build ships worth 20 million euro ($30 million) annually for a Dutch shipping company. If we can satisfy the company, it said it would go into joint venture with us within a few years,” he said. The 13-acre Fisheries Shipyard has already built a hydrographic research vessel several years ago, but since then has remained idle and concentrated on the ship repairing needs of Rangs? fleet of ocean-going fishing trawlers. Hannan said the company would buy more land and upgrade the facilities for shipbuilding.

A leading ship building expert said the latest entries by big companies show how promising the industry is for Bangladesh. “We knew it would happen. Now we can see how fast it is happening in Bangladesh,” said CF Zaman, head of ship-inspection agency, Germanischer Lloyd, Bangladesh. “The arrival of the two big conglomerates means a lot to the industry. It will now be a matter of time before shipbuilding emerges as a billion dollars industry,” he said.

The arrival of the two giants was announced just weeks after the government announced bonded warehouse facilities for the shipbuilding companies. This will enable companies which build ships for export will now be able to import machinery and raw materials free of duty. The government said the facilities would inject a new momentum into the hugely potential export earning sector and create tens of thousands of jobs.

Bangladesh joined the boom in shipbuilding industry early last year when two companies, Ananda Shipbuilding and Slipways and Western Marine, captured export orders worth $150 million from European shipowners. Experts said buyers have rushed to Bangladesh and other developing countries, which have a network of rivers, after the traditional shipbuilders in Europe and Asia started refusing orders for small ocean going ships. Top Asian shipbuilders, like South Korea, Japan, China and even Vietnam, are no longer interested to build smaller ships because of poor profit margins.