Local shipbuilder signs deal with International buyer, Opening prospects for Bangladesh

Another Bangladesh shipbuilding company signed a memorandum of understanding yesterday with a Dutch firm to supply eight sea-going ships worth US$87 million.

Highspeed Shipbuilding & Engineering Co Ltd signed the MoU with Hollander Scholtens (HS), Groningen to start construction of the ships from December this year.

Highspeed, specialized in building small riverine cargo and passenger vessels, will be the third company to build ships for foreign buyers.

Earlier, Ananda Shipyard and Western Marine Shipyard Ltd, entered the global shipbuilding market with US$350 million orders from Denmark, Germany and Mozambique.

European shipbuilding companies are all booked with orders till 2010, while the Asian shipbuilders in Korea, Japan, China, Singapore, Malaysia and Vietnam have adequate export orders.

This vacuum has created great opportunity for the country's booming shipbuilding industry to grab a chunk of $300 billion worth global export market.

Bangladesh has a competitive edge over its Asian rivals because its cheap and naturally expert workforce.

Highspeed Shipbuilding and Engineering expects it could complete building 9,000 tonnes capacity ships by April 2012.

The company will now have to upgrade its infrastructure and add modern facilities to its facility at Fatullah, Narayanganj in the next nine months before starting the shipbuilding.
The managing director expects the company will invest around Tk 1 billion for expanding its facility.

GB/Mach 16, 2008

This year April Bangladesh  firm to deliver 2 ships to Danish buyer

Bangladesh's ship building industry has entered to a new age as a local company is set to deliver two ships to a Danish buyer in April this year.

Ananda Shipyard and Slipways Ltd will deliver the US$26 million ships to Denmark's Stella Shipping. The capacity of each ship is 2,900 DWT (deadweight tonnes).

Photo:  One of the ships that will be delivered to Danish Company
             

Ananda Shipyard has so far received orders to build 14 ships worth US$200 million, company officials told a briefing in Dhaka on February 18. The ships will be delivered to German, Danish and Mozambique buyers by 2010, the officials added.

International buyers and Ananda Shipyard officials said in the news briefing that the local industry has the capacity to grab a portion of global shipbuilding market, but they said it needs government support.

 “Shipbuilders in Bangladesh have the capacity,” said Jan Fabricius, chairman of Stella Shipping. But they need to reduce the time of delivery, he added.

“Orders for new ships are also pouring in,” Afruja Bari, managing director of Ananda Shipyard, said. “But we could not receive all orders because of our capacity constraints,” she said.

Gerd Wessels, managing director of Wessels Reederei GmbH and Co, Germany, said, “Lead time in shipbuilding industry is very crucial as demurrage cost is very high.” “I'm absolutely convinced with the quality I've seen here,” said York Dyckerhoff, managing director of a Germany-based shipping company.

Choudhury Fakhruz Zaman, a marine engineer and country manager of Germanischer Lloyd, a ship certifying company, said the quality of Bangladesh-made ship was quite competitive.

Ananda Shipyard Chairman Abdullahel Bari said the current market of the global shipbuilding industry is US$800 billion. China alone has US$100 billion worth of export orders and India has US$8 billion orders.

The Commerce Adviser Hossain Zillur Rahman while speaking at the function said Bangladesh's shipbuilding firms must learn to build ships competitively by streamlining management structures, employing new manufacturing processes, and revitalizing labor forces.

International estimates indicate that there is a sizable demand for new commercial ships over the next few years because the commercial fleet in different countries is very old. Only two privately owned yards, including Ananda Shipyard's, are producing ships commercially. The other local company is Western Marine Shipyard.

GB/19th February, 2008

Bangladesh emerges as a new shipbuilding hub

Ship building industry in Bangladesh  emerges as new export leader after two ship builders as they have already grabbed order worth over $250 million in 2007 as said by ship builders on February 3,2008.

Meghnaghat-based Ananda Shipyards has signed agreements worth around $180 million while Chittagong-based Western Marine put its total orders to more than $70 million.

According to the chairman of Ananda Shipbuilders Abdullahel Bari, if the trend continues, ship building in Bangladesh will be the second largest exporter after garments in 2015.

Shakhawat Hossain, managing director of Western Marine expects that if Bangladesh can grab one per cent of the global order for small ships, the amount will be worth $4.0 billion. The global market for small ships is now about $400 billion.
 
Experts are hoping the country can become a new destination for companies seeking construction of small ocean-going vessels as traditional shipbuilding nations such as South Korea and China are now focusing on building large ships. Even, relatively new ship building country, Vietnam, is no longer interested to build small ships weighing up to 25,000 dead weight tons.

The focus on Bangladesh came in April,2007 when Ananda signed deals worth around $100 million with two German shipping companies to build eight vessels with capacity for 325 containers by June 2010.This was probably  the single biggest export order for the country.

The company then went on to sign two more deals worth $82 million in October and December in 2007 and the company is  now investing about Tk 1.10 billion to set up two dry docks in its shipyard. The company hopes by early 2009 when the docks will be built, they can take order worth $500 million.

Western Marine has also had a remarkable year in 2007 as it signed deal worth over $80 million including the construction of five multipurpose cargo vessel for a Danish owner, each weighing 4100 tons.

The company has also signed a letter of intent with two foreign companies to construct 14 small vessels at a cost of around $150 million.
 
The sudden explosion of orders came after vigorous inspection by the shipping companies in the two shipyards. The shipyards had to upgrade their infrastructure to meet international standards the shipping companies were looking for.

According to the industry estimates, more than 100,000 Bangladeshis are now employed in Singapore, Korea and Dubai shipyards. The country has also been known for its small shipbuilding industry, which churns out dozens of launches every year. Most of the nearly 3,000 launches, oil tankers and cargo ships that ply in Bangladesh waterways were made there.

Experts said it was only a matter of time before Bangladesh emerges as a major hub for building small ocean-going ships


GB/4th February,2008

Import and export shipping costs are increasing, Country’s business waiting for a further dilemma

The feeder operators are planning to raise sea freight charges by around 40 percent from February 16 and this move will increase the costs of imports and exports. The freight charges for each 20 feet container will be raised by $100 and the 40 feet container by $200. The feeder operators said that they have decided to raise the freight mainly because of high prices of bunker and increase in the operation cost.

Now the freight charges between Chittagong and Singapore ranges between $260 and $280 for each 20 feet container. According to shipping sources,  feeder vessel requires at least 180 tons of fuel oil worth $ 75,000 and 35 tons of diesel worth $ 28,000 for a voyage between Chittagong and Singapore. If the feeder operators increase the freight charges, the main line operators (MLOs) transporting goods to the continents will also increase. The freight charge for shipping goods from Bangladesh to European ports ia around $1800 and American ports $2000 for each 20 feet container.

The chairman of Shippers’ Councils of Bangladesh (SCB), Mahabub Ali, on January 24 expressed his concern that it will make an adverse impact on country’s economy’s industrial sectors as they import machineries and others things through containers and asked the feeder operators  to review the matters considering the country’s economic situation.

GB/26 January, 2008