Bangladesh: Ship-breaking industry back to business

Ship-breaking industry is back to business as the government has permitted the ship-breakers to import about 20 ships after a break of eight months. Department of Shipping has issued no-objection certificate in the current month for importing scrap vessels and prior to this it gave import NOC in April.
"This is a good sign for the economy because the industry supplies scrap iron to about 700 re-rolling mills which are dependant on the raw material for producing MS rod," Zafar Alam, president of Bangladesh Ship-Breakers Association, told the FE.
The sector annually supplies about 2.3 million tonnes of scrap iron, 0.35 million tonnes of furniture, emergency generators to different factories, motors and spare parts to different users, and pay about Tk 7 billion revenue to the public exchequer.
Some of the ships have already arrived in Bangladesh and some will arrive soon, he said adding, "Sixteen ship-breaking yards have already got clearance from the Department of Environment."
"We got the NOC for importing the ships as we have fulfilled two major conditions which are required for bringing any ship to Bangladesh," Mr Zafar said.
The conditions are environment clearance for yards provided by the Department of Environment (DoE) and ship decontaminating certificate provided by both - exporter and importer.
The iron price has started to pick up in the domestic market due to shortage of scrap iron supply as import was virtually stopped since April.
Asked about environment pollution, an official of Department of Shipping said one should look into the issue with a holistic approach.
"Every industry irrespective of its nature pollutes environment and ship-breaking is not an exception," he said adding, "one should consider the comparative cost of pollution as well as the economic benefit the industry provides to the society."
The comparative cost of import of 2.3 million tonnes of scrap iron and the number of trees that would have to be chopped for 0.35 million tonnes offurniture should be taken into consideration before terming the industry as polluter, he explained.
Bangladesh, India, Turkey, China and Pakistan are the five major ship-breaking countries and Bangladesh holds about 50 per cent of the market.
Importers last year imported over 150 old vessels, which they bought from auction in the international market.
"International market is very competitive and old vessel exporters will sell ships even if the margin is 25 cents per tonne," he said.
The ship-breakers stopped importing ships since April after a High Court verdict in which it said that they must get approval from the Department of Environment before importing any old vessel.
About 1.2 million people are directly and indirectly dependant on the sector.