Shipbuilding Industry: Dawn of a New Era

The commencement of industry maybe was the biggest elucidate moment in human chronicle,
with every feature of life being influenced by zooming industrialization. It not only have made
colossal influence on population growth and income but also uplifted world-economy to great
instance. For a developing country like Bangladesh, who is also rich with rivers and waterways
side by side, has been a hotspot for shipbuilding since Mughal era. Bangladesh is already
exporting ships in 12 countries {India, Pakistan, Saudi Arabia, UAE, Sweden, Denmark, Italy,
Germany and many African countries). This industry of Bangladesh has been compared with
countries like China, Japan and South Korea. Bangladesh has around 300 shipbuilding
companies, but only 2 company exports vessel abroad. The revenue earning of the country
would have gone a 100 times higher if even one-tenth of those companies could build large
ships for local and foreign buyers

In 2019 the local shipyards have exported 40 ships to different

countries of Europe, Africa and Asia and earned $180 million.
According to the Export Promotion Bureau (EPB), BD earned To uplift the
$30.45 million in the 5 months of the FY 2017-18, a robust Economy of
growth of 460.77% comparing to the previous FY. The total Bangladesh this
export figure for the whole FY 2016-17 was $65.61 million, a Industry could
growth of 230% from $19.89 million in FY 2015-16. As per Help immensely
World Trade Organization (WTO), prospect of Bangladeshi By Earning a
shipbuilding in global shipbuilding market size is $1,600 billion. Plenty of foreign
If only 1% market share can be captured by Bangladesh, it will Currency
be worth $16 billion which could allure foreign investors to
invest in this sector.

Despite having such potentials this industry is going through many challenges and also posing
dangers for others which are hindering their progress. Firstly, the commercial banks are not
capable of making required investment in ship building industry (especially when the scale of
investment is to the tune of 100 to 1000 crore or more). The interest rate for industrial and
working capital loans ranges from 12% to 16%, which is unsuitable this sector. Whereas 7% rate
of interest on export credit is prevailing for other export sectors like ready-made garments.
Secondly, the ship building process paints are widely used that contains volatile organic
compound (VOC) which is unsafe for the atmosphere. Apart from that the toxic substances of the
ships (residual oil, chemicals, petroleum and poisonous gas etc) pollutes water and air. And it
was observed that 86.44% of the labor force doesn’t receive any medical facilities or proper
compensation. 10.64% of the workforce is under 18. Thirdly, lack of research and development
is failing to bring innovation and new technology in the sector. Lastly, entry to the foreshore for
shipbuilding entrepreneur is restricted by bureaucracy problem like unfriendly attitude of the
administration toward local shipbuilding.
Recently, the Ministry of Industries has drafted the “Shipbuilding Industry Development Policy”,
which includes a 10 year tax break, cash incentives etc. They are also considering developing a
$0.59 billion fund for the advancement of the industry. They have also trained 7,500 workers to
increase productivity as they plan to earn $1 billion annually by exporting ships.
The market for small ocean-faring vessels would grow to $400 billion annually by 2026 and if
Bangladesh could achieve at least 1% of that market share it’ll bring $4 billion annually into the
country. It would carry Bangladesh to the next phase of its development as a middle-income
country. In the past, the country failed several times to take the advantages and lucrative
opportunities of modern trade and commerce due to the delay in response. So, this time the
concerned authorities should take action while fixing the identified problems and dangers leaving
no delay. After all, “You can’t cross the sea merely by standing and staring at the water.”

-
Tanzina Harun Tanni
And
Nushakha Israt

BBA, 2nd year, Department of Marketing, Jahangirnagar University