Western Marine shares jump 9.38% on UAE export deal

The share price of Western Marine Shipyard, one of Bangladesh's leading shipbuilders, surged 9.38% to Tk7 following the announcement of a plan to export at least eight ships to a UAE-based company.

The company disclosed the plan during an event held at Chittagong Boat Club on Saturday (28 December).

The news has been positively received by investors, especially after a four-year break in exports by Western Marine. 

Earlier this year in February, the share price was Tk16.50, but it has since declined steadily, reaching Tk6.40 on Thursday.

Persistent issues like poor performance, loan defaults, and a lack of dividend declarations have left shareholders frustrated for an extended period.

According to Western Marine, this will mark the first ship exports from Bangladesh in two years. The country's last ship export occurred in September 2022.

In 2023, Western Marine signed an agreement with UAE-based Marwan Shipping to build eight ships. Under the agreement: A 69-metre landing craft named Rayan will be delivered in January 2025. Two tugboats, Khalid and Ghaya, will be delivered in April 2025. The remaining five ships are scheduled for delivery at various times throughout 2025.

Western Marine previously exported a ship to Marwan Shipping in 2017, and the success of that shipment encouraged Marwan Shipping to proceed with this new deal.

In addition to exports, the company is set to deliver two passenger vessels, MV Rupsha and MV Sugandha, to the Bangladesh Inland Water Transport Corporation next month.

To date, Western Marine has exported 33 ships to 11 countries, with a combined value exceeding $100 million. Between 2010 and 2017, the company built 50 different types of vessels, including container ships, oil tankers, and tugboats, for domestic clients.

The company's exports came to a halt in 2019 due to the global economic downturn caused by the Covid-19 pandemic. It managed to export two bulk carriers in 2020 but has not secured any significant export deals in the last four years.

According to the National Board of Revenue, Bangladesh has not exported any ships for the past two years. The last export was by Narayanganj-based Ananda Shipyard, which delivered a vessel to Denmark in September 2022.

Established in 2000 by 15 entrepreneurs in Chattogram, Western Marine has built over 150 vessels of various types over the last two decades. These include cargo vessels, passenger vessels, multi-purpose ice-class vessels, landing crafts, offshore patrol vessels, tugboats, fishing vessels, bulk carriers, and container carriers.

The company remains a key player in the shipbuilding sector and is optimistic about future growth, starting with this new export deal.