Rise of shipbreaking industry in Bangladesh

In 1960, a Greek ship named "MV Alpine" was stranded on the coast of Sitakunda, Chattogram, following a cyclone. The sight of this colossal ship ignited curiosity among the locals. People flocked to see it, some even attempting to board. However, for five long years, the ship remained stranded, unable to be salvaged.

Later, in 1965, Chittagong Steel House purchased the ship. Without any prior experience, they employed local labourers to dismantle the ship using traditional methods and recover scrap metal. This marked the introduction of the term shipbreaking in the port city.

During the Liberation War in 1971, a Pakistani ship, "Al Abbas", was damaged by allied forces and was salvaged and brought to Faujdarhat, Sitakunda. In 1974, an organisation named Karnaphuli Metal Works Limited purchased the ship and later sold it as scrap, making a profit. This marked the beginning of commercial shipbreaking in Bangladesh.

In the 1980s, the import of scrap ships began commercially for the first time. Gradually, shipbreaking activities increased, and it became recognised as an industry.

Domestic businessmen and industrialists started investing in shipbreaking. Since then, it has been known as a profitable industry. In addition to old investors, new entrepreneurs are now joining this industry.

The flourishing industry in Sitakunda significantly increased the income of people in the shipbreaking yard area. A shipbreaking yard involves a variety of work and trade in various goods. Thus, it provides employment for thousands of people.

According to Chittagong Customs House, 166 ships were imported in the 2023-24 fiscal year, containing 975,000 tonnes of iron. According to shipbreaking industry entrepreneurs, there are currently 50-55 institutions that import ships.

Thousands of establishments are involved in the sale of various products from these ships. A large number of people have found employment in the sale of products used outside the shipbreaking industry.

Abu Taher, president of the Bangladesh Ship Breakers and Recyclers Association and a veteran entrepreneur in this sector, confirmed that the shipbreaking business in Bangladesh started with the stranded ship in the 1960s.

From the 1980s to 2011-12, this sector was a booming business. At that time, at least 150 yard owners, both old and new, operated the business. Thousands of people were involved in this business directly or indirectly at that time.

However, due to the ups and downs of the domestic and international markets, many inexperienced businessmen's trade failed after 2012-13.

The number of active shipbreaking yards has dwindled, with many facilities now operating intermittently or having been completely closed. The number of registered yards stands at 120, however, ship breakers association said there are 30 to 35 operational yards.

Ship scrap to steel rods

The demand for steel rods in both the public and private sectors in Bangladesh is increasing day by day. The annual demand for rods in the country is 55-60 million tonnes.

About 70% of the scrap (raw material) required for rod production is supplied from shipbreaking yards. The primary raw material for rods is scrap from old ships.

In addition, various steel re-rolling mills also produce rods by importing raw materials from abroad. There are around 130 large and small re-rolling mills in the country, out of which 50 are large-scale. Among these large-scale mills, 30 are auto steel mills.

According to the Ship Breaking Association, 35-40 million tonnes of scrap are obtained from old ships each year. More than 70% of this is supplied to the steel industry, especially to steel re-rolling mills.

The major buyers of dismantled ships are over 130 large and small steel re-rolling mills across the country, including Chattogram.

Nothing goes to waste

Not only scrap iron, but nothing from a ship goes to waste except for harmful waste.

After import, yard owners auction off the remaining goods after removing the iron. Those who win the auction sell them to small-scale traders. These goods are then sold to end-users through multiple hands.

Shipbreaking goods are sold in several places in Dhaka and Chattogram. There are countless shops along the highway from Banshbaria to Faujdarhat in Chattogram where shipbreaking goods are sold.

Besides, different goods are sold in Pahartali CDA Market, Sagarika, West Madarbari, Kadamtali, and Muradpur areas. Shipbreaking goods from Chattogram are also sold in Dhaka's Dholai Khal and Sadarghat.

Apart from carrying goods, a ship also has all kinds of residential facilities. 

As a result, in addition to daily necessities, ships also contain raw materials for industries. Steel for re-rolling mills is one of them.

Large pipes, machinery, electrical equipment, furniture - everything is found on ships.

Large and small generators, electrical wires, utensils, showpieces, exercise equipment, air conditioners, electric fans, refrigerators, washing machines, soundboxes, printers, photocopiers, computers, televisions, etc. can also be found on a ship.

In addition, the most expensive part of a ship, the propeller, is an exportable product. Large ship propellers are sold for around Tk5 to Tk6 crore. Many products like copper, brass, and corrosion-resistant steel equipment are also exported.

Slump in industry

The once-thriving shipbreaking industry in Sitakunda is no longer as vibrant due to various factors such as global crises, economic downturns, and environmental pollution.

At one point, the industry's operations spanned approximately 25 kilometres from Salimpur to Kumira along the Sitakunda coast with about 150 yards in operation.

However, Nazmul Islam, the secretary of the Ship Breakers and Recyclers Association, reports that the number of operational yards has now dwindled to between 30 and 35.

According to the International Maritime Organization (IMO), despite various adverse conditions, Bangladesh has maintained its top position in the global shipbreaking industry since 2015. Even during the COVID-19 pandemic in 2020, Bangladesh alone recycled 38.5% of the world's ships.

Every year, over 600 ships worldwide are declared obsolete. A significant portion of these ships is recycled in Bangladesh. Bulk carriers are recycled the most globally, followed by container ships and oil tankers.

Environmental and health risks

Bangladesh's shipbreaking industry, a major sector, has been heavily criticised as a risky and environmentally destructive industry.

Therefore, the industry is still classified as red. The industry has frequently faced allegations of labour exploitation and environmental pollution. Accidents are also not uncommon in this industry.

For many years, efforts have been underway to bring order to the industry through various laws and regulations. In response to demands from environmentalists, the government has pledged to create a pollution-free and risk-free industry.

The Basel Convention of 1989, the Hong Kong Convention of 2009, the ILO Occupational Safety and Health Convention of 1981, the ILO Guidelines on Occupational Safety and Health Management Systems 2001, and the IMO Guidelines 2012 are applicable to the shipbreaking industry.

In addition, 12 national laws and regulations apply to this industry. Efforts have been underway for several years to transform the shipbreaking industry into a green industry or green yard through the use of modern technology.

According to ship breakers association president Abu Taher, five institutions have so far greenified their yards. He also mentioned that at least 20 more yards are in the process of going green.

PHP Ship Breaking Yard was the first to embark on this journey seven years ago in 2017, initiating efforts to create a green industry. Subsequently, Kabir Ship Recycling Facilities, KR Ship Recycling Yard, SN Corporation, and Mac Corporation were transformed into green facilities.