Leveraging fleet expansion to build national shipbuilding capacity

The newly acquired bulk carrier of the BSC (Bangladesh Shipping Corporation), 'M V Banglar Progoti' (63,000 DWT), began her commercial operation on 27 October 2025. Another ship will also join soon by the end of this year, raising the total number of BSC ships to seven. With this, the long-term hiatus in acquiring new ships by the BSC has finally ended.

The current BSC acquisition is unique for two reasons. 

First, the ship was purchased at the delivery stage — a classic case of a resale newbuilding constructed at the Nanyang Shipbuilding Company Yard in Jingjiang, China. 

Second, for the first time in its fleet expansion history, the BSC spent $76.69 million (equivalent to Tk934 crore) from its own funds. 

The entire current BSC fleet was constructed in China and joined the fleet between 2018 and 2025. Of the present six ships, the initial five were acquired between 2018 and 2019 from China under government-to-government contracts for Tk1,500 crore. 

According to the BSC, the state-owned carrier has now decided to buy one ship each year using its own funds. "By 2030, another five new ships will join the fleet," says Commodore Mahmudul Malek, managing director of BSC.

The previous government possessed a strategic plan to acquire 32 oceangoing merchant ships of various types by 2041 under the Smart Bangladesh programme. In addition, private ship owners have also started acquiring brand-new ships constructed in overseas shipyards. 

Both public and private enterprise initiatives in acquiring new ships manifest a strong demand for merchant vessels in the international market. Vis-à-vis this surge in demand and the BSC's current acquisition plan, this article attempts to answer three questions: How is value created under the current ship acquisition model; what model do major shipbuilding countries follow; and can we transform the BSC's fleet expansion plan to upgrade our own capacity for building seagoing merchant ships?

When the BSC or a private ship owner buys a fully constructed vessel from abroad, we create 100% of the economic value (wages, steel fabrication, engines, electronics, design, testing, etc.) in an overseas country. 

As an importing country, we simply receive the finished asset. Obviously, there is no manufacturing, engineering, or design work done at home. As such, there is no multiplier effect on our local industries, such as steel, paint, electronics, machinery, welding, and logistics. Hence, there is zero domestic value addition.

While we do enjoy usage benefits — such as increased fleet capability, enhanced maritime connectivity, growth in foreign exchange earnings through shipping operations, and a stronger national flag carrier presence — there is no industrial value addition. 

This creates dependence rather than domestic industrial growth. We import a finished ship but not the capability to build the next one. Under these circumstances, we may explore the success stories of major shipbuilding countries to understand how their transformation took place.

Based on a report by UNCTAD (Review of Maritime Transport 2025), China, the Republic of Korea, and Japan collectively account for 95.15% of the global shipbuilding market. These countries have established themselves as the primary suppliers of maritime ships in the global market, but their success took time to take off. 

As mentioned in the book Korean Shipbuilding Industry: Growth and Mission, the evolution of the shipbuilding industry in these countries followed common stages of development: first, these nations relied on merchant ships from other countries when trade was insignificant; second, as the need for increased trade arose, they purchased new or used ships from developing shipping nations; third, shipyards for repairing ships were constructed for seaborne trade, and the number of foreign and domestic ships increased; and fourth, new shipyards were built as technologies for repairing ships were acquired and the demand for domestic ships grew.

If we place Bangladesh on this global development path, we find ourselves at a strategic turning point, currently entirely dependent on imported merchant ships, much like Korea and Japan in their early phases. 

Remarkably, we already have limited newbuilding capacity (up to 10,000 DWT), a repair industry, a growing maritime labour force working both at home and abroad, and rising demand for merchant ships from both public and private owners. This combination of factors reflects the conditions under which major shipbuilding nations began transitioning from ship importers to shipbuilders.

The proposed new shipyard, linked with the BSC and private ship owners, would not only enhance Bangladesh's shipbuilding capabilities but also benefit the nation in numerous ways. Beginning with human resource development and employment in the sector, an upgraded shipbuilding yard would provide maritime strategic sovereignty, reducing dependence on foreign yards.

Following this model provides a realistic path for Bangladesh. The question, therefore, is no longer whether Bangladesh needs shipbuilding capacity, but whether we can leverage the BSC's predictable fleet expansion plan, along with private-sector growth, to initiate our own transition to building high-capacity seagoing merchant vessels. The answer depends on how strategically we utilise the demand that has already been created.

Bangladesh already possesses a presence of assured and long-term demand — a fundamental requirement for developing a shipbuilding industry. The BSC's future demand, combined with the enthusiasm of private ship owners who have acquired more than 60 seagoing merchant ships since 2018, manifests a sustainable pipeline of demand. 

As such, the upcoming demand is sufficient to justify investment in a modern, higher-capacity shipyard capable of building large vessels. History shows that giants in the shipbuilding industry began their journey when demand surged.

Thus, the challenge is no longer the uncertainty of demand, but when we will align our industrial strategy with the rising call for new ships. Existing shipyards are built for small ships only. A new shipyard will be required in a deep-draft location to build large-capacity seagoing ships. This initiative may be supported by joint ventures with experienced foreign shipbuilders and mandatory technology transfer.

The proposed new shipyard, linked with the BSC and private ship owners, would not only enhance Bangladesh's shipbuilding capabilities but also benefit the nation in numerous ways. Beginning with human resource development and employment in the sector, an upgraded shipbuilding yard would provide maritime strategic sovereignty, reduce dependence on foreign yards for construction and repair, and enhance resilience during disruptions. 

Instead of becoming a perpetual importer of ships, the proposed new shipyard capability could support ship repair, conversion, and recycling, eventually allowing Bangladesh to become an exporter of large merchant ships. 

Finally, one day, Bangladesh could become a serious maritime industrial nation like the Philippines or Vietnam, following in the footsteps of the existing giants of the global shipbuilding industry.

In conclusion, the plans of the BSC and private ship owners to acquire large new merchant ships provide a pathway to Bangladesh's future shipbuilding capacity. Success now depends on deliberate policy choices, such as building a new high-capacity shipyard and securing technology transfers from major shipbuilding companies. 

With this, the foundation for a sustainable national shipbuilding industry may be laid. Without it, our fleet expansion will remain nothing more than a sourcing exercise.

Sayeed M Hassan is a retired captain of the Bangladesh Navy and adjunct faculty at Bangladesh Maritime University. 

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.