16 October 2012

Shipbreaking sector springs to life with import bonanza

Chittagong-based shipbreakers have imported a record number of recyclable ships weighing about 2.1million tonnes of iron plates during the last nine months, industry people said.

They said over 200 ships have already been broken in the first nine months of 2012, which is the highest in the last two years when the industry saw many ups and downs due to legal complexities.

They said their business is back on track and they are expecting more ships to dismantle in the coming days.

"Now Bangladesh is on the top position in terms of dismantling ships," President of Bangladesh Ship Breakers Association (BSBA) Hefazatur Rahman told the FE.

Bangladesh is a unique place for shipbreaking as nearly cent per cent of the products coming from the dismantled ships are being used here, he said.

In a ship there are more or less 200 cabins and all the furniture goods are sold in the local markets reducing the pressure on forest, he said.

He expressed the hope to extract around three million tonnes of steel from the broken ships by the end of this year.

The situation is now different from that a few years back, he said adding over the years, the industry has improved safety standards for the workers and "it is also conscious about the environment".

A total of 206 ships weighing 2.1 million tonnes were imported at a cost of about $945 million, Technical Adviser of BSBA Captain Salahuddin Ahmed said.

"Bangladesh is the only country, where every part of the ship is sold at a doubled rate compared to other countries like India," he added.

Bangladesh was the top ship buyer for eight times in a row from 2000 to 2010 leaving China, India, Pakistan, Turkey behind, he said adding after 2009 various legal campaigns by environmental groups almost shut down the sector.

"But now it is back on the track," he said adding the shipbreaking sector is vital to the economy as it supplies the much-needed steel and iron to the domestic market.

Bangladesh's unique geography is also another reason why ageing ships are taken to its beaches. The unique tide pattern makes it easy to ground the ships during occasional tides, he explained.

The country's 125 shipbreaking yards imported 145 ships weighing 1.7 million tonnes of iron plates in 2011. The import had dropped significantly in 2010, upon a judicial verdict, as environmental groups took the issue to court on the allegations of dumping hazardous materials by the ships on the coast and exposing workers to toxic substances.

In the face of protest and obeying the court order, the government had suspended import of recyclable ships for about a year. Later, the government introduced new rules for shipbreaking and formed a Ship Breaking Cell at the Ministry of Industries to implement the rules.

The Ship Breaking and Recycling Rules 2011 was issued in a circular on December 14, 2011.

The once active shipbreaking yards at Sitakunda, 20 kilometres north of the port city of Chittagong, dismantled only 75 ships in 2010, more than 170 ships in 2008 and 150 in 2007. Bangladesh used to dismantle around 50 per cent of the ships sent to scrap-yards across the globe, according to BSBA.

The government gave shipbreaking the status of an industry in February this year as part of a long-term plan to promote labour standards and safe toxic management. The shipbreaking industry is the country's main source of iron and steel. Private re-rolling mills and steel mills melt the scrap pieces dismantled from ships to produce mild steel (MS) rods, bars and angles.

Source: Hellenic Shipping News. 17 September 2012

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