28 February 2013

Ship Recyclers complying with Convention ahead of ratification:

A likely boost to the Ship Recycling Convention as Indian ship breakers get into a proactive mode of acquiring certification ahead of this new proposed regulations getting ratified

Incredible as it may sound but ahead of the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 getting ratified, ship breakers in India are on a proactive mode seeking certification under the proposed regulations. At least two major players in this field are in the process of certification of their yard in Alang. But taking a closer look the advantage far out-weigh the drawbacks that were imagined all along by ship breakers of Alang where 40 per cent of the worlds ship breaking activity takes place involving a huge workforce.       

Putting things in the right prospective, the Indian ship recyclers’ interest in getting certification can’t be said to be a ground breaking event as such. In fact, ClassNK has already issued the world’s first Statement of Compliance (SOC) for a ship recycling facility to Jiangmen Zhongxin Shipbreaking & Steel Co., Ltd in China two month’s back and more are likely there. This SOC certifies that the Chinese facility and its recycling procedures are fully in compliance with the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships and it is the first time that a ship recycler’s yard has achieved this recognition.

The two Indian ship recyclers’ are trying to get their ship breaking yard certified by ClassNK. A gap analysis will be done thus indicating which of the rules are complied with and which still need compliance. Will it be easy to fulfil all the regulations considering the malicious attack on the beaching method as practiced by Alang ship recyclers?      

In the case of Jiangmen Zhongxin Shipbreaking & Steel Co.,  the largest ship recycler in China with a yard of over 400,000 sq meters in area has a capacity of only 500,000 light dead weight tons (LDT). However, the yard has been a pioneer in green ship recycling and has earned recognition as a “AAAA” level green ship breaking enterprise from the China National Ship Recycling Association. After a thorough review of the ship recycling facility plan (SRFP) developed by the yard with the assistance of Wilhelmsen Ship Management, ClassNK working as a third party certification body confirmed that the recycling practices of the yard were in compliance with the Hong Kong Convention, and issued the world’s first SOC.

Green ship recycling has become an important issue in the maritime industry, especially following the adoption of the Hong Kong Convention. This has gained momentum especially after the growing concerns about corporate social responsibility and the new local and international regulations helping drive the demand for high quality ship recycling facilities which can recycle vessels in an environmentally sound, friendly and safe manner. 

A.V. Pradhan, General Manager of ClassNK points out that the beaching method followed at Alang cannot necessarily be said as not approved method. Also it cannot be said to be bad process of ship recycling as long as they are able to take care of the pollution. He informed that ClassNK has scheduled the inspection of the two ship recyclers’ yards next month and only after all the regulations have been complied with can they be eligible for SOC. 

“We find the ship breakers are very keen on getting the SOC,” stated Mr. Pradhan. “One reason for the interest being shown could be that a large number of Japanese vessels come to India for recycling. But now the Japanese government is putting restrictions on the Japanese ship owners to have their ships scrapped only at approved ship breaking yards. According to me if these two recyclers who have approached us for securing the SOC find that it is easier to comply with the requirement than what they thought all along then it is possible that most of the others could follow suit and obtain certification. As it is the various players at Alang are very focused and have managed to bring down accidents rate to almost nil in the year preceding last year. However, last year as a result of failure to follow precautionary measures by some workers that some deaths reportedly took place.”

If ship recyclers are able to succeed in making Alang green there is no doubt that they will continue to hold the initiative of being the foremost ship recyclers in the world.

Source: maritime professional. By Joseph Fonseca

27 February 2013

GMS weekly report on shipbreaking industry for WEEK 8 of 2013:

A week of relative stability in prices saw an increasing number of owners taking the plunge and selling their units At prevailing levels this week. India, once again, was the most active market - unsurprising, given that they have the broadest selection of buvers able to take all types and sizes and vessels, particularly considering the recently abundant supplv of containers from the German market!
The volatility that has plagued the Indian market for much of this year already (and for large chunks of last year) is still very much in evidence, with the currency once more trading back down at 54 to the US Dollar and steel prices marooned some USD 25/LT LDT down from the peaks of the year.
For this reason, manv of those vessels arriving at Alang that were concluded at previous highs, are either facing or are extremely likely to face issues upon arrival. Already we have seen vessels arriving into Alang and facing hefty renegotiations from cash buyers unable to perform at the agreed levels. The perils of the market are not something that owners should have to deal with if going with strong and reputable cash buyers from the outset.
Bangladesh and Pakistan endured quieter overall weeks with fewer of their more favored units open for sale. The Chittagong market is still a relative newcomer to container purchases (with their pricing still not quite as sharp as India for these units) and Pakistan simply refuses to take containers owing to beaching draft issues. For this reason, despite a comparatively weak market, India has stayed ahead on volumes so far this year.
China was the one market firing on all cylinders once again, following the conclusion of the Chinese New year and the ability to buy at levels approaching those of the Indian sub¬continent. Therefore, most the vessels positioned in the Far East were likely to end up as China candidates, rather than owners facing the risk of bringing their vessels over to the Indian sub-continent with the extreme market volatility still very much in evidence there.
For week 08 of 2013, GMS demo rankings for the week are as below:
Market Sentiment
USD 400/ltldt
USD 425/ltldt
USD 390/ltldt
USD 420/ltldt
USD 385/ltldt
USD 420/ltldt
USD 375/ltldt
USD 400/ltldt
Source: steelguru. 26 February 2013

GMS weekly report on Pakistan shipbreaking industry for WEEK 8 of 2013:

After a busy recent few weeks taking in their preferred larger tankers gas free for man entry only it was a quieter week for Pakistan with not as many of their favored units hitting the market as India took the best of the rest smaller handysize bulkers and containers.
Price remains competitive with their Indian sub‐continent rivals and for the right units can be pushed on to impressive levels. The propensity to avoid container vessels due to beaching draft issues has seen Gadani buyers miss out on a vital supply of tonnage with such units receiving numbers similar to and even excess to tankers in India of late.
Source: steelguru. 26 February 2013

GMS weekly report on Indian shipbreaking industry for WEEK 8 of 2013:

Despite the turmoil that the Indian market currently finds itself in, local buyers still managed to do themselves justice by concluding a majority of the market sales for yet another week.
Some vessels have been seeing some extraordinary levels, leading to suggestions of late that cash buyers are once again trying to push prices up to unrecognizable levels, in order to justify some of their overpriced purchases of a month or so ago. This type of gambling has, and will always remain, a dangerous tactic with millions at stake.
Indeed, there appears to have been some sustained speculation recently that levels post budget on 28th February, could well see prices push on once again. However, the reality on the ground is of a currency that is once again depreciating back down to 54 against the US Dollar, whilst steel prices have come off (and stayed off) by nearly USD 25/LT LDT in the past few weeks, without showing any material signs of a recovery.
Of the deals done, the larger container HLL BALTIC (19,520 LDT) caught the eye with a price of USD 425/LT LDT 'as is' Singapore with some 250 T bunkers included in the sale. The smaller container RENALTE SCHLILTE (7,308 LDT) - also from German owners - has been rumored to have concluded at unbelievable LTSD 450/LT LDT, however given her Polish country of build, we believe the vessel to be concluded in the mid $430s/LT.
Finally, the bulker SILVER STAR (5,486 LDT) and the MPP DAE SAN (3,846 LDT), both from North Korean owners rounded off the sales at USD 405/LT LDT and LTSD 411/LT LDT respectively.
Source: steelguru. 26 February 2013

GMS weekly report on Bangladesh shipbreaking industry for WEEK 8 of 2013:

Few of the favored Bangladesh units (such as capesize bulkers and suezmax tankers / VLCCs gas freed for hot works) limited the opportunities of the local market to show their true colors this week. Indeed the onlv market sales concluded saw the smaller handysize bulker ALKAR (7,856 LDT) fixed for a marginally strong USD 410/LT LDT.
The lack of available buyers with strong lines of credit has also been an issue at the start of this year, with cash buyers having to be doubly sure that the end users they are dealing with have the capacity to open and release valid letters of credit on time.
For that reason, with many of the larger buyers taken up with vessels already purchased, those that remain cannot be entirely trusted to perform satisfactorily on arriving units.
Source: steelguru. 26 February 2013

GMS weekly report on Chinese shipbreaking industry for WEEK 8 of 2013:

It has been an encouraging start to life post Chinese New Year for local buyers and the Industry in general, as prices remain firm and even push on for the right units on offer.
Whilst the Indian sub-continent market remains relatively subdued, Chinese buyers are expected to procure their fair share of tonnage (as plenty of units were offered this week), yet the number of confirmed deals was on the lower side.
If China continues this sort of form as Indian sub-continent markets repeatedly stutter, then it is sure to be a bumper year of the snake ahead!
Source: steelguru. 26 February 2013

23 February 2013

Ship Recycling is the Commission’s Titanic:

It was the symbolic date of 12/12/12 that the international NGO, Center for International Environmental Law, decided to publish a legal opinion denouncing as 100% illegal the European Commission’s proposal for a new regulation on ship recycling. This coincided with the legal analysis by the former chief counsel of the European Commission, Dr. Ludwig Kramer, where he uncovered how the proposal of the Commission contained substantial violations of the Basel Convention.

But let’s take one step at a time. In order to see why those people together with various NGOs like Greenpeace and the Shipbreaking Platform condemned the initiative of the European Commission, we need to shed some light first on the hot issue of Ship Recycling, or Ship Breaking, as it is mostly known. Ship Breaking is the process of scrappage of old ships in shipyards where they are being dismantled and recycled. As everybody can understand, this process is not as easy and straightforward as the recyclation of batteries or PET bottles. This is mostly due to the size of tankers that can reach up to a length of half a kilometer and also to the highly dangerous toxic properties of the ship and its carriage.

Imagine that you were the owner of a huge Ultra Large Crude Carrier (ULCC) tanker that has been carrying oil for several years and you want to scrap it due to its age or mechanical problems. Where on earth will you find a massive shipyard to send your tanker for demolition?

Do it like Exxon Valdez:

Exxon Valdez, the notorious tanker that was responsible for the biggest oil spill ever in the USA, after running aground in Alaska’s Prince William Sound in 1989, is still lying dead in Alang, India, the biggest ship graveyard in the world. According to the Spiegel, that was the ship’s final destination where its corps is still being devoured by hundreds of Indian workers in return of a few rupees per day.

Exxon Valdez might probably be the most famous but certainly not the only one. Thousands of ships every year arrive to Alang but also other shipyards of the South Asia region for scrappage. The reason is the limited or absent environmental controls in those parts of the world, the low competitive price and the significant distance from the west.  And of course when it comes to the melting and burning down of highly dangerous for the environment and health vessel properties like asbestos, the mineral mix that is highly linked with cancer and other diseases, machine oil and radioactive material, all the “developed” western countries want to keep that out of their house.

It is seriously very sad what is happening in places like Alang in India. Regardless of the tremendous ecological damage that nobody is able to estimate due to the lack of controls, hundreds of poor workers are killed or severely injured during the demolition process. In the case of ship recycling, like in various other cases, the west is continuously sending to the developing countries death and ecological chaos, in order to avoid the burden of their own waste. That may be sound preposterous but still it is the truth.

Business as usual:

Of course, all those developing countries in the South Asia region, like India, Pakistan or China are seeing this as a big business opportunity. During the scrappage of old ships, huge parts of steel can be pocketed by the local companies and thus boost the steel industry of the country. The business is so profitable that for a vast country like India the steel extracted by ship breaking amounts to an approximate of 9 % of the country’s steel demand, according to the Spiegel. Hence, those countries make sure that they have competitive prices and conditions for foreign customers, with that possibly meaning also to turn a blind eye when the demolition causes a severe environmental damage. Moreover, sometimes they even fight between each other on who is going to get the customer.

So, basically, we are talking about a lucrative business here. Unfortunately, it is a trade of ecological and health hazard and it is always at the expense of the weak, namely here the developing countries. Now that I have sufficiently described the way ship breaking “industry” operates, and feeling the urge to give hope to my reader that there are some basic regulations that try to minimize the social and environmental impact of this chaos trade, I feel ready to come back to the initial allegations that the recent legislation proposal of the EU to change the ship recycling regulations is illegal.

The Commission wants the biggest piece of the pie:

The above allegations that the European Commission is running an unprecedented illegal proposal to restructure European ship breaking are referring to the infamous proposal published on the 23rd of March 2012 in Brussels. Indeed, in this proposal the European Union is planning to change the map of ship recycling concerning the European ships. But, of course, before we find out about the changes planned, we need to know the current status first. Are there any existing rules and limitations that control this rather dodgy and hazardous business?

In 1989 the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal was adopted. The European Union abides by the Basel Convention and the Basel Ban Amendment that explicitly prohibits the export of hazardous waste from the European Union to non OECD (Organization for Economic Co-operation and Development) countries. Of course, neither India nor Pakistan nor China is a OECD member and yet, according to the Commission, in 2009 more than 90 % of the European fleet chose his last voyage destination to be South Asia. That the Basel Convention is not enforced is not news. The problem lies in the fact that there is a loophole in the regulation that lets EU ships change their flags to something else in the middle of the Ocean, hence they can escape the Basel Convention. Thus, the Basel Convention is hard to be enforced and this can be also confirmed by the evidence that the Guardian recently brought to light that  365 European ships were scrapped only in 2011 in South Asia, with Greece being one more time the negative example with 174 ships, Germany 49, Norway 37, Britain 32 and so on. So, perhaps a reform is highly needed and the NGOs are wrong to accuse the Commission this time, or not?

Well, the thing is that those loopholes in the Basel Convention are very well-known and the shipping industry is making insanely large amounts of money every year out of them. An attempt to cover these gaps was the Hong Kong Convention under the umbrella of the International Maritime Organization of the United Nations that was adopted in 2009. The latter convention, that has not been ratified yet, permits the ship breaking to happen in countries out of the OECD that have ratified the Convention and under certain requirements. However, since no ratification has been made yet and is not expected to be made until 2020 or so, the Hong Kong Convention has no validity at this moment. Therefore, the only universal regulation for this issue that is valid is the Basel Convention.

It was, thus, inside all this mess that the European Commission, that more than often operates as a huge conglomerate, decided to bring on the table its own rules and regulations. The “European Company” with this proposal aims to early break the limitation of the European ships not to be scrapped in non OECD countries. Basically, what the NGOs claim is true. The proposal of the commission appears to be illegal because it is against the Basel Convention and even the Commission’s previous regulation 1013/2006. But we need to show some understanding here to the European arrivism. The Commission just broke the law to do business.

Nobody resists an open jar of marmalade:

The European Commission acted as a pure opportunist on this one. They even admit this in a way in their proposal. They bluntly say that they take this initiative because they cannot wait for 2015 or later that the Hong Kong Convention will be ratified. Hence they defy the Basel Convention, they break the barriers of the non exports in non OECD members, and all this, in order to make profit. You see, time is money for the European Conglomerate.

They saw a door and they just came in. They even propose a system where there will be EU controls and standards that will allow the ship breaking outside OECD. We have to admit that this is not a regulation proposal. This is an excellent business plan. All this will eventually bring a lot of money to the Commission and will make this chaotic trade of toxic waste a very lucrative business for the Old Continent. They even dared to state in the infamous proposal that this regulation will “hasten the entry of the Hong Kong Convention into force globally”.

In short, the European Conglomerate, namely European Commission, is violating an international Convention to exploit an opportunity and make aggressive business while on the top of that they act like the saviours of the world. The vanity is so immense that this time they even went against the interests of the Shipping Industry, that they often tend to serve, like in their recent decision not to prolong maritime transport antitrust guidelines any more. The Ship lords, namely International Chamber of Shipping (ICS), met in London on the 5th of February and did not omit to go against the Commission on this initiative-proposal while praising the Hong Kong Convention. Of course, those rich ship owners are seeing that the European Conglomerate with its initiative is setting its own rules in the business and this will steal significant market share from them.

The Epitaph of a European Business Plan:

The truth is that the Commission caught all those ship lords sleeping this time. It does not want only a good piece of the pie. It wants the entire pie for itself to the great disappointment of the Ship owners that were seeing the Hong Kong Convention as their big chance to boom the ship breaking business in the developing world. I think it is quite clear what is going on here. These are pure competitive business plans and certainly not policy making. I think the EC has completely forgotten about its role this time. The ship recycling business is a sad business just like the war business. Companies make profit from environmental chaos and death. Instead of finding ways to end this madness and limit the environmental and health impact of this business with unanimous consent and serious global strategic actions, Europe is trying to make extra profit from that. I am wondering then: Is this the role of the European Commission? And most importantly, is this the future of Europe?

Source: europeansting. 20 February 2013

20 February 2013

GMS weekly report on Chinese shipbreaking industry for WEEK 7 of 2013:

A lack of activity due to Chinese New Year holidays is expected to be broken next week with the return to the table of yards in both North and South China.

Whether all yards have renewed licenses in time and even returned from their hometowns from the holidays remains to be seen so it could be a rather stuttered start to the week at least.

No market sales were (unsurprisingly) concluded for the week and several owners will no doubt be monitoring prices with interest upon reopening as a number of candidates remain positioned in the area and Bangladesh has yet to jump up significantly on the price to justify the voyage over.

Expect a good scrap between the Chinese and Bangladeshi market in the year ahead on geographically positioned tonnage!

Source: Steelguru. 19 February 2013.

GMS weekly report on shipbreaking industry for WEEK 7 of 2013:

The resistance on prices and buying that has been witnessed over the past few weeks particularly in India was once again evident this week, despite cash buyer speculation that was once again, taking center stage.

Many of the high priced deals concluded in January are now starting to deliver and for those who had banked on a market upswing amidst a frantic buying month, the pain was starting to be felt especially on those vessels arriving without an end buyer in place.

Indeed, if cash buyers were not struggling to get their end buyers to perform, on the whole there were some significant hits being taken across the board - particularly on the raft of larger container vessels purchased into the high 460s and 470s/LT LDT only last month. While certain vessels are being taken over by cash buyer crews at anchorage and hoping to idle for a potential market upswing in order to justify their speculative purchases other (less scrupulous) buyers are simply renegotiating deals down to prevailing levels so as to minimize losses.

The scene is most difficult of all in India, where the Indian Rupee has once again started to depreciate back towards INR 54 to the US Dollar, and steel prices faced another uphill struggle in order to gain parity with recent acquisitions / expectations.

The spotlight therefore fell heavily onto Pakistan and Bangladesh (with China out of action) whose performances were needed in order to deflect attention from India. Many cash buyer vessels began to be diverted away from India, as a large number of end buyers in Alang simply even refused to come forward and make offers.

Minimal activity in China owing to the New Year holidays heightened the expectation that upon reopening, the Chinese could add some much needed impetus and urgency into the market.

For week 07 of 2013, GMS demo rankings for the week are as below:

USD 400/ltldt
USD 425/ltldt
USD 390/ltldt
USD 420/ltldt
USD 385/ltldt
USD 420/ltldt
USD 375/ltldt
USD 400/ltldt

Source: Steelguru. 19 February 2013.

GMS weekly report on Pakistan shipbreaking industry for WEEK 7 of 2013:

Pakistan looked to take advantage this week of the dire circumstances in India (where very few end buyers were even offering hoping to see a more settled market than that of today) by concluding a few candidates that mav otherwise have been destined for Alang shores.

The 31 vears old panamax bulker HAYDAR (11,796 LDT) from Turkish owners achieved a strong USD 430 per LT LDT with 400 T bunkers remaining on board. Meanwhile the fire damaged undertow bulker RENOS (9,050 LDT) achieved a comparatively modest, vet firm LJSD 391 per LT LDT in comparison.

The tendency still exists though in Gadani to follow closely the movements (both up and down) of their Indian counterparts rather than taking a definitive lead and striking out to secure the majority of the market tonnage out there. So if the slide in India continues it will remain to be seen if the ongoing purchases do get performed at the time of the vessels arrival at Gadani.

Source: Steelguru. 19 February 2013.

GMS weekly report on Bangladesh shipbreaking industry for WEEK 7 of 2013:

A drastic few weeks of decline and fall has finally seen prices settle, some way below USD 400/LT LDT on dry units (with up to 400-405/LT LDT there on decent, favored bulkers), and about USD 25/LT LDT ahead for tankers (gas free for hot works) and containers.

All types of vessels continued to arrive from cash buyers, and those that had not been diverted elsewhere, invariably faced trouble with end buyers trying to wriggle and justify the market price of the dav. Those units concluded at some of the extraordinary and speculative highs of last month faced particular pressure with certain cash buyers becoming increasingly desperate to sell at numbers that no longer exist.

It is never a good time to sell when the market is falling - no cash buyer or owner wants to be chasing down the market and certainly, end buyers have begun to scent blood and are looking to take advantage of some increasingly desperate Sellers.

Of those deals that were concluded, the Polish built bulker YELLOWSTONE (9,765) achieved a firm USD 415/LT LDT as did the ABS classed handysize bulker BARBRO (6,575 LDT) at USD 410/LT LDT. Meanwhile the STAR ISLAND H (5,409 LDT) faced a renegotiation by a reported USD 12/LT LDT upon arrival by the concerned cash buyer.

Source: Steelguru. 19 February 2013

GMS weekly report on Indian shipbreaking industry for WEEK 7 of 2013:

A drastic few weeks of decline and fall has finally seen prices settle, some way below USD 400/LT LDT on dry units (with up to 400-405/LT LDT there on decent, favored bulkers), and about USD 25/LT LDT ahead for tankers (gas free for hot works) and containers.

All types of vessels continued to arrive from cash buyers, and those that had not been diverted elsewhere, invariably faced trouble with end buyers trying to wriggle and justify the market price of the dav. Those units concluded at some of the extraordinary and speculative highs of last month faced particular pressure with certain cash buyers becoming increasingly desperate to sell at numbers that no longer exist.

It is never a good time to sell when the market is falling - no cash buyer or owner wants to be chasing down the market and certainly, end buyers have begun to scent blood and are looking to take advantage of some increasingly desperate Sellers.

Of those deals that were concluded, the Polish built bulker YELLOWSTONE (9,765) achieved a firm USD 415/LT LDT as did the ABS classed handysize bulker BARBRO (6,575 LDT) at USD 410/LT LDT. Meanwhile the STAR ISLAND H (5,409 LDT) faced a renegotiation by a reported USD 12/LT LDT upon arrival by the concerned cash buyer.

Source: Steelguru. 19 February 2013

19 February 2013

Eight shipbreaking workers fall sick inhaling carbon-dioxide in Chittagong:

Eight workers became sick as they inhaled excessive carbon-dioxide gas when opening a gas cylinder at a ship breaking yard in Sitakunda upazila of Chittagong on Saturday.

Of the victims Imran Hossain and Abdul Wahidur were admitted to a local clinic.

Police said the workers at ARL Ship Breaking Limited mistakenly opened a gas cylinder in the engine room of a ship around 1:15pm.

Ritesh Mahmud, director of the yard, said they will bear all the cost of the workers' treatment.

Source:  The Daily Star.  17 February 2013

17 February 2013

Financial Express – Govt to enact Shipbreaking and Recycling Law by June: Barua

Industries Minister Dilip Barua Monday expressed hope that his government will enact Ship Breaking and Recycling Law by June of this year to create a safe environment for the sector.

He was having a meeting with Norwegian Ambassador Ragne Birte Lund on technical assistance in maintaining safety measures with support from Norwegian Agency for Development Cooperation (NORAD).

The minister said the Ministry of Industries (MoI) and the NORAD will jointly work to reach an international standard platform that will create an environment-friendly ship recycling industry.

He said once the law is in place, it would be easier for the government to monitor and supervise the industry and it would also create an impetus to force the shipbreakers to maintain rules.

The minister said currently the shipbreakers are supposed to follow the government’s Ship Breaking & Recycling Rules 2011.

The Norwegian Ambassador said NORAD will mark up indications with the government’s support to strengthen the safety measures in the ship recycling industry.

She said both the government and the NORAD will jointly work to support the local ship recycling industry in maintaining safety rules according to International Maritime Organisation (IMO).

The Ambassador said, “We are here to provide technical assistance in dealing with the hazardous materials, equipment and in building the workers’ capacity and supports in some other projects that will be helpful to deal with the bigger ships according to the IMO rules and regulations.”

MoI Secretary in-charge Mohammad Moinuddin Abdullah said at first there would be a Memorandum of Understanding (MoU) between the government and the NORAD.

He said soon after the signing of the MoU there would be a Technical Assistance Project Proforma (TAPP) under which both the parties would indicate and finalise the possible safety measures for a green shipbuilding industry.

The MoI is going to extend help to the shipbreaking and recycling industry in the light of suggestions and rules of IMO and Basel Convention by forming a Technical Assistance (TA) body.

According to data available from the MoI, currently Bangladesh is breaking 26 per cent of the world’s total scrapped ships, China 33 per cent, India 31 per cent and Pakistan 4-5 per cent.

Statistics show that Bangladesh alone is dismantling more than one quarter of the world’s total abandoned ships and the industry is rising gradually.

Source: shipbreaking platform. 12 February 2013

14 February 2013

Alang Ship Recycling Yard turns into an unlikely shopping destination for bargain hunters and collectors

The 50-km drive from the district centre of Bhavnagar to the maritime graveyard at the AlangSosiya Ship Recycling Yard is bumpy and unpleasant. But for a few years now, this road has witnessed a growing stream of bargain hunters from all over India on an unlikely shopping expedition.

When a ship dies, it doesn't receive a dignified burial. It is taken apart to the every last valuable ounce of metal, and recycled. The process entails consequences to the environment.

But along the long road that leads to Alang, a cottage industry has sprung up, selling every reusable part found in a ship, ranging from furniture to crockery, carpets, consumer goods such as television sets and refrigerators and all kinds of knick-knacks. These represent a bargain for their low cost and typical high quality- ship makers generally use top-notch equipment to minimise repairs during the product's lifecycle.

Because of the bargains to be unearthed, and because goods that are not commonly found elsewhere can be bought here, the place attracts hoteliers, factory owners, art collectors (see box), home makers and others who come looking for the remains of a vessel.

"Ship builders and owners do not take chance with quality of products they use and install on board. Anything that comes on ship has to be capable of performing in any marine conditions and also meet some of the global regulatory provisions," says Vimal Vaja, whose Harsh Traders sells kitchen appliances.

Kitchen equipment makers use much better grade of steel to cater to the marine business, Vaja says. Utensils, refrigerators, coffee makers, sandwich grillers, platforms, hotplates, dish washers, steam cattle, vegetable cutting machines, soda makers, dough makers and ice cube makers used in ships all have very robust build and are sought after by the hospitality sector.

Nearly a thousand shops dotting the main road sell used goods. There is no guarantee, but there is a bargain to be driven at every store. Many goods-especially electronics and home appliances-can be of very high quality, and feature designs not commonly seen in India. This is true also for furniture, carpets and other such household items. Boats, gym equipment, video games, navigation equipment, machine parts, tools and heavy machinery are also found in abundance.

This has turned Alang into a hot destination for small businesses. Factory owners from industrial centres such as Jalandhar, Noida, Chennai, Hyderabad and Coimbatore come here looking for used diesel generator sets, motors, welding equipment, turbo chargers, oil purifier, heat exchangers, cooling towers, navigational safety equipment and other such industrial products.

Toothpicks to TV Sets

Traders dealing in different products visit the vessel once the ship breaker is through with clearances from customs, the pollution control board and the maritime board. Traders negotiate with ship breakers for the entire cache of goods in their category.

Payments are made within a month of delivery that comes in phases once workers start dismantling the ship. Over the years, traders have become highly specialised and many boast a loyal clientele that come from afar to buy from them. Girish Dave of Bhagwati Traders is among the earliest entrants in the trade and owns a shop close to the yard. "I used to deal only in furniture when my shop was in the beginning of the market outside of ship breaking yard.

Source: economic times. By Mitul Thakkar. 01 December 2012

The business of shipbreaking

Alang Ship Recycling Yard is one of the largest ship recycling yards in the world. In an interview with Anto T Joseph, Gujarat Maritime Board vice-chairman & CEO, Pankaj Kumar says, Alang has undergone various stages of development and has witnessed soectacular growth since its inception in 1982.


Alang is the world’s largest shipbreaking yard, and year 2012 has been one of the best years for the industry. What is GMB’s contribution to the industry’s growth?

Year 2012 has been historic for GMB. During the year, GMB recycled 415 ships; the highest number recycled till date at Alang, and in the process, 3.86 million tonne (light displacement tonnage or LDT) was recycled. This financial year, up to November, 266 ships were handled at Alang and 2.62 million tonne has been recycled, which in itself is a phenomenal achievement, when worldwide, the shipbreaking is at an all-time low.

GMB’s contribution has been multifold. We have taken up various initiatives like environment protection, safety and labour welfare measures, health measures and the regional development at Alang, a few of which are mentioned below:

1) Creation of the state-of-the-art training and labour welfare institute.

2) For scientifically disposing off the hazardous waste and solid waste, we have created two landfill sites. For housing migrant workers, GMB initiated a project for constructing housing facilities in a phased manner.

3) We provide services such as fire brigade, emergency response van and 108 emergency medical services.

4) Infrastructure development such as approach road, water supply, safety institute, sanitation, streetlights and fire-fighting equipment in place.

5) Realising that the nearest full-fledged hospital is at Bhavnagar, we have signed an MoU with GVK-EMRI for 108 Ambulance service, especially at Alang.

What are the difficulties faced by GMB in implementing rules and regulations (especially the supreme court order) at Alang-Sosiya? Do you think monitoring has been lax?

Alang-Sosiya Ship recycling yard is being run as per supreme court order dated September 6, 2007, which laid down the steps to be taken by various government agencies such as Customs, GMB, directorate of industrial health & safety (DISH), Gujarat Pollution Control Board, Petroleum & Explosives Safety Organisation (PESO, an institute of the central government) and the Atomic Energy Regulatory Board (AERB).

Only after the NOC is obtained from above the agencies, beaching of the vessel is allowed. Also, the interministerial committee (IMC) headed by the steel ministry, is monitoring the overall working of Alang-Sosiya recycling yard from time to time.

In a recent fire, seven migrant workers were killed, exposing poor safety gears used by them. Is GMB taking any action against the shipbreakers that are making migrants work without adequate safety measures?

Safety of workers and beaching operations are of prime importance to GMB. After the establishment of safety training institute, the rate of accidents has come down drastically. The last such fire accident took place in Alang in 2009. The recent accident was an unfortunate event and we been very sensitive on the issue. Strict action is initiated against the plot owners and we strive for ‘zero tolerance’. When such casualties happen, an immediate detailed inquiry is initiated and the plot where the accident happens is closed down with immediate effect till the inquiry is over. GMB also imposes penalty on the ship breaker and ensures that the family of the deceased is compensated financially as per the provisions of the regulations.

To prevent accidents, we have appointed 10 safety officers and labourers are given extensive training. We have also evolved a mechanism of safety audit. All ship-recycling activities are conducted under the direct supervision of these safety officers.

Despite several deaths of workers from accidental fire, are tankers allowed to break at Alang-Sosiya that are not ‘gas-free for hot work’?

Tankers are allowed to break or beach only after getting clearance from PESO at anchor prior to beaching. The fire incidents have been controlled to a large extent. After 2009, only in 2012, there was a major accident. The cause of the accident was leakage from pipelines when they were being decontaminated as per guidelines of PESO and department of safety and health (DISH). From 2008 to present, about 180 oil tankers have been safely recycled and we are working constantly to improve and plug any loopholes in safety measures along with inputs from other agencies.

Is the supreme court-directed desk clearance looking into all details of ships arriving at Alang for breaking? There are reports that most ships come to Alang without any protection and indemnity (P&I) cover or a certificate from the recognised classification society?

Various authorities as mentioned undertake the desk review, as per the directions of the Supreme Court earlier. Only on receipt of the clearances from various authorities, the ships are allowed to be beached at Alang.

As per the supreme court order, the work of various agencies like customs, GPCB, AERB and GMB has been well defined. During the desk review, emphasis is given on the condition that no vessel of hazardous nature is allowed to be beached. Only after clearance from the above agencies, the vessel is allowed to be beached.

Prior to beaching of any vessel at Alang, every ship is considered a normal ship and it has to comply with all international and flag state regulations for sailing vessels. Only after beaching, the ship ceases to be a vessel. It is pertinent to note that any vessel can only sail or get port clearance from the last port only after all its certificates required for sailing are in proper order. So it may not be true to say that most ships come to Alang without any P&I cover or certificate from a recognised classification society. It is pertinent to mention here that the vessel owner is liable for criminal negligence for putting a vessel to sea if he tries to circumvent any law.

Permission to use plots (lease) has expired in September 2009. Why is it not renewed for such a long time?

The validity of the earlier regulation has been extended and there are no cases where lease permission is not renewed.

Source: By Anto T Joseph (antojoseph@mydigitalfc.com). 21 December 2012