In Shipbuilding News 06/04/2015
The government has initiated a move to provide a refinance of Tk 2.0 billion to the shipbuilding industry, considering its potential to emerge as a major export earner, a senior trade official said.
To push the move forward the Export Promotion Bureau (EPB) has requested the ministry of commerce (MoC) to take necessary measure for the refinances.
“We will hold a meeting on April 12 with the stakeholders and other ministries and departments about refinancing the shipbuilding sector,” additional secretary of the commerce ministrty Sawkat Ali Waresi told the FE.
“We will also formally write to the ministry of finance (MoF) to facilitate the refinancing to the shipbuilding industry,” he said.
An expert of Naval Architecture and Marine Engineering department of Bangladesh University of Engineering and Technology (BUET) said the ‘made in Bangladesh’ ships are 15 per cent cheaper compared with Chinese ships and are of the same quality, according to.
Bangladesh’s labour cost is still cheaper than Chinese, Korean and Japanese since shipbuilding is a labour intensive industry.
China, Korea and Japan are leading exporters of ships.
Shipbuilding industry needs huge capital, a major source of competitive disadvantage for Bangladeshi builders.
An official of a private shipbuilding firm said the country’s shipbuilders need to secure loan at as high as 16 per cent interest rate, while their Chinese counterparts can get loan at 6.0 per cent.
“Bangladesh has skilled manpower. The country’s labour cost is cheaper than many other countries. On an average, ship owners can save at least 15 per cent of their production cost if they choose to build their ships in Bangladesh,” a director of leading shipbuilder told the FE.
If the government support is made available like the apparel sector, the shipbuilding sector too will be able to play a great role in the Bangladesh economy, he said.
Bangladesh earned US$440,000 in fiscal year 2013-14 by exporting ships.
China, Japan and South Korea hold major share of the global shipbuilding industry estimated at $300 billion.
If Bangladesh can grab 10 per cent share of this global market, its earnings will be $30 billion, the director said.
There is a great prospect of this heavy and technology-savvy industry in Bangladesh where cheap labour is available.
An estimated 150,000 workers are employed in the country’s 15 shipyards while 0.2 million people are directly or indirectly dependent on this industry.
