Shipbuilders on the mend

The shipbuilding industry expects better business ahead as demand from domestic market is picking up, shipbuilders said.

Orders from international buyers resumed with the recovery of the global economy after several years in the doldrums, they said, adding that the blue economy has also opened a window of opportunity.

Western Marine Shipyard, a leading shipbuilder, has now work orders worth Tk 500 crore from domestic and foreign buyers, said Md Sakhawat Hossain, managing director of the shipbuilder.

It has Tk 250 crore orders from Japan, Denmark, Kenya and Tanzania, while the rest is from the domestic market. Western Marine will hand over all the ships to the foreign buyers within one and a half years.

“Additionally, five buyers are communicating with us. Their orders will be finalised in January,” Hossain said.

Western Marine focuses on making environment-friendly ships run by liquefied natural gas instead of oil, he said.

The shipbuilding industry will see 15 percent growth this year, compared to last year, Hossain said.

Western Marine has recently received a go-ahead from the stockmarket regulator to raise Tk 157.5 crore. The company will float 4.50 crore ordinary shares worth Tk 10 each with Tk 25 as premium.

The shipbuilder will use the fund from the initial public offering to develop infrastructure and repay bank loans, according to Bangladesh Securities and Exchange Commission.

Ananda Shipyard and Slipways, another shipbuilder, is currently handling work orders worth Tk 800 crore received in the past one year from the domestic market, said Tariqul Islam, its executive director.

Bangladesh Inland Water Transport Authority, Bangladesh Water Development Board, and Bangladesh Navy called international bidding for building vessels and Ananda won the bids beating international shipbuilders, Islam said.

Bangladesh will be able to save a huge amount of foreign currencies as local companies are building ships for the country, he said.

The industry had to go through rough times as most of the foreign orders were halted due to global economic slowdown, he said.

Orders for eight vessels worth about Tk 700 crore were cancelled in the last three years, according to Ananda.

“Now most of the foreign buyers are showing interest to resume the orders,” Islam said, adding that Ananda is not taking fresh orders from foreign companies as its shipyard has no free space. A two-member team from Germany will visit Ananda Shipyard on Thursday to buy two ships worth Tk 185 crore built earlier.

The shipbuilder is trying to recover losses by focussing on the domestic market, which is worth around Tk 3,000 crore, he said.

A good number of container vessels will be needed to ply the new river route from Chittagong port to Pangaon inland container terminal in Keraniganj, he said.

After the resolution of a dispute with India over the Bay of Bengal, the shipbuilding industry now looks to brighter days ahead as research vessels will be needed to assess ocean resources, Islam said.

If the government wants to reap maximum benefits from the ocean economy, the work of gas exploration should be given to local companies, he said.

“We have the capacity and expertise to build oil rigs and floating production storage and offloading vessels that are used to explore underwater gas and oil fields.”

Export of ships rose 7.35 percent year-on-year to Tk 481 crore in fiscal 2013-14, according to Export Promotion Bureau.
Source: The Daily Star