Shipbuilders back to life with Tk5,000cr orders

The country's shipbuilding industry is witnessing a significant boost as three of its largest companies have secured orders to build around two dozen vessels worth approximately Tk5,000 crore. 

This surge in orders comes after a year of increased inquiries by buyers, which has expanded the industry's potential for acquiring additional orders.

Dr Abdullahel Bari, President of the Association of Export-Oriented Shipbuilding Industries of Bangladesh (AEOSIB), told The Business Standard (TBS), "The shipbuilding sector is emerging as a shining star in the country's economy, with three major companies currently holding combined orders worth Tk5,000 crore." 

Bari, who is also the owner of Ananda Shipyard, said, "We [Ananda] also received a substantial number of inquiries last year, indicating a higher likelihood of obtaining more orders. We have received orders totalling about Tk700 crore."

Khulna Shipyard, one of the country's leading shipbuilders, has secured orders valued at around Tk2,300 crore, while Karnaphuli Shipyard has orders worth nearly Tk2,000 crore.

Captain Al Amin Chowdhury, general manager (Design and Planning) of Khulna Shipyard, told TBS, "We got work orders to build a 70-meter cruise ship, two tugboats for Payra Port, four 24-inch dredgers for the Bangladesh Inland Water Transport Authority (BIWTA), five 60-meter patrol craft, three landing craft tanks for the Navy, three diving vessels, a modern floating crane with a 70-tonne capacity for the Coast Guard, two diving boats for the Coast Guard, two ferries, and a survey boat."

"We are also working on several other smaller orders. These vessels will be delivered to buyers at different times by June 2024," Chowdhury added.

Engineer Abdur Rashid, managing director of Karnafuly Ship Builders Limited (KSBL), said that the firm is currently working on several orders, including building a mother vessel with a helipad, four coastal ships, three cruise ships, a few survey vessels, and other smaller vessels.

Rashid said all these orders were secured last year, requiring to be delivered by 2024.

Dr Bari, chairman of Ananda Shipyard, said his company is building two 24-inch dredgers for the BIWTA, two cargo ships with a capacity of 1,200 tonnes each, a multipurpose 5.5m container ship for India, and five medium and small-sized ships, along with some repair works. 

He said these orders are scheduled for delivery next year.

While the shipbuilding industry faced a challenging year in 2020 and 2021 due to reduced orders and payment difficulties, it managed to rebound in 2022.

Dr Bari said that immediately after the pandemic in 2021, the industry encountered decreased orders and halted ongoing projects due to payment failures. However, the situation improved significantly the following year, with a substantial influx of orders.

Although the Russia-Ukraine war posed a crisis in late 2022, it lasted only a few months, and the industry is currently not facing major issues, he noted.

Regarding the industry's potential, Bari said, "Bangladeshi shipbuilders have established a reputation for producing high-quality vessels at competitive prices and this has created a strong demand for their products abroad, leading to increased buyer interest and positive industry trends."

Regarding the dollar crisis and its impact on the shipbuilding industry, Al Amin Chowdhury of Khulna Shipyard said the crisis regarding opening Letters of Credit (LCs) only lasted for a few months last year. Fortunately, the government promptly resolved the issue, and currently there are no problems in this regard.

Expressing similar sentiments, Engineer Rashid of Karnafuly Ship Builders, said they are currently not encountering any obstacles in opening LCs for importing materials and machinery required for shipbuilding.

However, the situation differs for Ananda Shipyard. Its Chairman Dr Bari claimed that his company continues to face hurdles in opening import LCs. 

"I need to procure certain necessary equipment, but due to the dollar crisis, we are unable to proceed with the imports," he added.