Shipbuilding industry now in big trouble

Al Amin :
The shipbuilding industry, a promising export-oriented sector in the country, is now in a big trouble due to the ongoing Covid-19 pandemic and Russia-Ukraine war.
The industry was expected to be bright player in global market for small and medium sea-going vessels by catering to the domestic market. Many Bangladeshi companies would export different types of vessels, tug boat, landing craft, bulk carrier, patrol vessel, catamaran water taxi and ferry to various countries in Europe, Africa and Asia.
But, except some machinery, no complete ship has been exported from Bangladesh in the last three years, according to the industry.
The country has more than 100 ship builders and over 120 registered shipyards of varying size, the industry insiders said.
Owing to steady economic and trade developments and activated infrastructure projects, locally registered number of vessels have been increased with average annual growth rate of 5.39 per cent.
Annual market value of local shipbuilding industry is around $1 billion and the demand growth is forecasted to remain steady along with the economic growth and annual building capacity for export orders is estimated as more or less 20 vessels.
The high-tech specialized ship export market is not as volatile as the cargo ship export market. Following this, the shipbuilding companies showed interest centring the potential export market and the government also took various steps for the developing the industry including cash incentive and tax exemption.
The government formed policy for the industry in 2021. The banks provided capital support for the entrepreneurs of the sector as it was expected $4 billion export earnings from the sector.
Eng Shakhawat Hossain, General Secretary of the Association of Export Oriented Shipbuilding Industries of Bangladesh (AEOSIB), said, “None of us has exported any ship in last three years as the industry is passing through worst time. We never thought that we would face such a delicate situation. Pandemic and war have destroyed us.”
“Banks are also in trouble because of us. They provided capital worth of Tk 10,000 crore in the shipbuilding industry, which increased to Tk 25000 crore. None of us can able to pay the installment of the loans,” he said. “We can’t keep factories and offices running properly.
If this situation continues, many people involved with the industry will become unemployed,” Shkhawat added.
The earned around $1.13 crore in 2019-20 fiscal year, which was the highest. But, since the beginning of the Covid-19 pandemic, the export earnings fell drastically to only $2000 in last fiscal year (2021-22), according to the Export Promotion Bureau (EPB) data.
More than 70 per cent of the total export of ships were sailed the to European countries. But, followed by the pandemic, the European countries are suffering severely due to the shock of the war.
Inflation has risen abnormally and the people of all those countries are struggling to buy food now. Unless the situation improves, they don’t see any hope of exporting ships to the Europe, the entrepreneurs said.