Business

Bangladesh's ship breaking industry picks up pace again

  • 6 August 2012
  • From the section Business

Mohammed Shahin Alam's sprawling yard on the muddy beaches of Sitakunda, near the southern port city of Chittagong, is buzzing with activity.

There is a constant clanking of metals as hundreds of workers keep stripping iron plates and waste metal from broken ships. Trucks are lined up to carry the scrap metal to the local market.

Huge gas cylinders, giant propellers and engines are strewn across the mud and the smell of oil and metal permeates the air.

A huge oil tanker has been beached a few hundred metres away.

As you approach, you are overwhelmed by the enormity of the ship. But the 190-metre long iron monster will be reduced to a heap of scrap metal in a few months by the workers.

'Back on track'

Bangladesh's ship-breaking industry was the world's largest until 2009 when various legal campaigns by environmental groups almost shut down the sector.

At the peak of their business a few years ago, shipyards in Sitakunda, described as the graveyard of ships, dismantled more than 200 ships a year.

In 2010, due to court restrictions only 19 vessels were broken.

However, last year, courts lifted the ban on the import of ships until government ministries formulate detailed guidelines for the ship-breaking sector. That has seen business pick up pace again, with 150 ships dismantled in 2011.

Officials say 143 ships have already been broken in the first six months of 2012.

"The business is back on track and we are expecting more ships," Mr Alam says pointing to a pile of stripped steel from the ships.

'Vital to our economy'

The industry is worth around $1bn (£640m) and shipyard-owners say the sector employs nearly 200,000 workers.

Ship-breaking yard owners claim they provide nearly 60% of the country's total steel demand.

With the boom in the construction sector in the country, there is a growing demand for iron and steel. They say the steel from the dismantled ships is also used by the country's ship-building industry.

Image caption Some critics have cited concerns over the working conditions and safety of workers at the shipyards

Hence they say, the more ships they can break, the better it will be for the steel supply.

The industry is hoping to extract around three million tonnes of steel from the broken ships by the end of this year.

"The ship-breaking sector is vital to our economy as it supplies the much-needed steel and iron to our domestic market," Dilip Barua, the Bangladesh Industries Minister says.

"As we don't have any iron mine resources, ship-breaking is essential to boost our economic growth."

Shipyard owners argue that apart from contributing steel to the domestic industry, many parts of a ship such as propellers, generators and engines are reused or recycled.

Environmental concerns

Environmental groups argue that many of these ageing ships are not cleaned properly before they are brought to the shores.

They say many of these vessels contain hazardous materials like asbestos and toxic chemicals.

Campaigners claim that dozens of workers are killed in Bangladesh every year mostly due to gas explosions on ships they are breaking or due to other accidents at the yards.

They say the workers are not getting paid enough either. On average, workers earn around $150 a month.

"The ship-breaking industry is not doing any good for our country. The environmental damage to the area has been immense," says Syeda Rizwana Hasan, a leading environmental campaigner.

"As far as we know, they haven't done any improvement in the working conditions."

She also disputes the industry's claim that it had been supplying nearly 60% of the country's steel demand.

Shipyard-owners say the industry has been gradually evolving.

"Over the years, we have improved safety standards for our workers. We are also conscious of the environment," says Hefazutur Rahman, President of the Bangladesh Ship Breaking Association.

"The situation is different from what it was a few years back."

Strong growth

Despite objections by environmentalists, more ships are expected to be brought to countries like Bangladesh, as it's too expensive to get rid of unwanted vessels in developed countries.

Bangladesh's unique geography is also another reason why ageing ships are taken to the beaches there.

The unique tide pattern makes it easy to ground the ship during occasional tides.

The other leading countries in the ship-breaking business are India, Pakistan, Turkey and China. With their abundance of cheap labour, these countries control the global ship-breaking sector.

And with the entire fleet of single-hulled oil tankers around the globe scheduled to be scrapped by 2026, ship-breaking yards in Bangladesh are likely to be busy for the coming years.

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