Ship Recycling in Bangladesh A look at the economic impact of the Industry
Contents Ship recycling sta;s;cs at a glance Snapshot of ship recycling Industry in Bangladesh Economic contribu;on of ship recycling in Bangladesh Commercial viability of the industry
Introduc;on :Ship recycling sta;s;cs at a glance Considered one of the oldest “ green industries” . Up to 85% of a vessel recycled and reused. Ship recycling industry forms part of the four major shipping markets: dealing with demoli;ons In 2011 over 8.8 million LDT was recycled , representa;ve of 1281 ships. Bangladesh accoun;ng for 27% of the tonnage recycled. Only second to India at 32% .
Major Ship Recycling Countries by Number of Ships Recycled
Number of Ships
Year Bangladesh Figure 1 Source : IHS Fairplay
Major Ship Recycling Countries by Tonnage (GT) 9 8
1 0 2006
Figure 2 Source : IHS Fairplay
2008 2009 Year
Average Age and Number of Vessels Recycled 2000
Average Age of Vesels
1000 31 30
Figure 3 Source : HIS Fairplay
2008 2009 Year
Number of Vessels recycled
Snapshot of Ship Recycling in Bangladesh Beaching of Greek ship MD Alpine gave birth to Ship Recycling Industry in 1960. Forged its posi;on since as a top ship recycling country. In 2008 recycled 50% of world tonnage. Almost all of recycling ac;vity centered around Chi\agong.
What makes Bangladesh an “ a\rac;ve” recycling des;na;on……? Tidal diﬀerence of 6 meters , long ﬂat uniform inter;dal zones allows for easy beaching. Beaching involves ;ming the ;des, sailing at maximum speed driving the vessel as far up the beach as possible. Low labour costs Inadequate environmental and health and labour laws.
Ship recycling trend in Bangladesh
Major vessel types recycled – Tankers and Bulkers In 2009 Tankers and Bulkers represented 72% of ldt commissioned for scrapping Over the period 2006 – 2011 imports of Tankers and Bulkers for recycling grew 59% and 73% respecfully.
Bangladesh : Recycling Major Vessels by type and LDT 10
200 150 5 100 50 0
Figure 4 Source : IHS Fairplay
Number of Vessels
Overview of Ship Recycling Legal Framework Recycling industry bound by the guidelines set out in two conven;ons – Basel Conven;on & Hong Kong Conven;on (once ra;ﬁed). Basel Conven;on – Recognizes that a “ship” may be deﬁned as waste because of the hazardous materials it contains. Illegal to violate the ‘ban amendment’ by transpor;ng waste from an OECD Country to a Non OECD Country
Hong Kong Conven;on proposes three pronged approach to ‘greener’ recycling. Cradle to Grave concept. Implementa;on of controls at ship design, construc;on and maintenance stages. Green Passport / Inventory of Hazardous Materials development and implementa;on. Compliance enforcement by all stakeholders : recycling state, port state and ﬂag state.
Economic Contribu;on of Ship Recycling in Bangladesh Government revenues associated with the ship recycling industry account for an averange of 1,000,000,000 Taka annualy. It provides jobs for some 200,000 workers along the supply chain, with some 30,000 directly employed in the industry. It has given rise to other ancillary services and increased entreprenual ac;vity owing to second hand trade in materials and refurbished ship parts.
Reduces currency exposure risk as the domes;c steel supply obtained from scrapping reduces the amount of foreign currency used for import payments Provides a ready source of raw materials (re rolled steel and ingots) for the construc;on industry
Uses of scrap from recycling acHviHes
Re Rolling Scrap-‐angles ,ignots,billets etc Resuable steel plates Mel;ng Scrap Source :Hossain et al 2012
Commercial Viability of Ship Recycling in Bangladesh World Bank Report (2010) “Ship Breaking and Recycling Industry in Bangladesh and Pakistan” presents comprehensive data and analysis on the proﬁtability of ship recycling. Costs and revenues of a sample Panamax vessel decomissioned for recycling used for analysis Analysis representa;ve of recycling ac;vity during 2009.
Revenues,main costs and proﬁts for sample ship in Bangladesh
Purchase of Ship
Taxes, tariﬀs and du;es
Other Costs including rents 38,400.00 & investment costs PROFIT
Source : World Bank Report (2010) Ship Breaking and Recycling Industry in Bangladesh and Pakistan.
Conclusion Ship Recycling ac;vi;es in Bangladesh have made a signiﬁcant impact in the commercial and economic ac;vity of the country. It has contributed to the crea;on of jobs, government revene ,development of small and medium entreprises associated with ship recycling ac;vity It provides a signiﬁcant amount of steel to be re-‐ used in the construc;on industry.
Hong Kong Conven;on provides a clear environmentally friendly and accountable framework for recycling. Sample Panamax proﬁt assessment proves that the industry can be commercially viable .
Published on Apr 16, 2013