Bangladesh finalises plan to build a state-of-the art shipyard near Payra port
The shipbuilding industry has been an underrated and underappreciated sector of Bangladesh over the last decade. However, the market has a significant contribution to the total earnings of our country. It has substantial potential thanks to the availability of cheap labour in the country but since the business requires significant investments and export opportunities overseas, the industry has only a handful of big players who currently lead the market.
Thankfully, that scenario will change as Bangladesh is set to receive heavy investment in the shipyard sector with Singapore-Australia-based company Gentium Solutions Group and Dutch-based shipbuilding company Dutch Shipyard Group. The proposal has already been presented to the Industries minister Nurul Majid Mahmud Humayun. They are developing world-class shipbuilding and ship repairing facilities in the Patuakhali district. The consortium has intended to invest BDT 14,000 crore in the project. The government has already allocated an approximate land area of 101 acres of land close to the Payra port. It will be developed under the direct supervision of the consortium. The two companies will support the government project to build world-class vessels that are in high demand in many parts of the globe. The inclusion of Damen Shipyards Group will facilitate the use of state-of-the-art technology in the shipyard’s infrastructure. Therefore, many shipbuilding projects that were not feasible to develop in Bangladesh would now be possible to approach and supply in high numbers. Both the companies also have global affiliations with projects that would bring in orders for the venture as well.
Gentium Solutions Group advisor Md. Kaikobad Hossain stated, “Damen is the leading shipbuilding company globally with 35 shipyards under their name around the world. The shipyard planned in Patuakhali will be their 36th undertaking.” He added, “We had inked the agreement with the government on 14 January 2020. Then we hired EY India to conduct the feasibility study. The study took two years to finish.” Now, the companies have thought about entry into the Bangladeshi market. EY India, a renowned consultancy firm in India, has done a feasibility analysis for the project, including cost projections and extensive analysis of the prospect of the latter events. The main reason behind the companies investing in Bangladesh is the availability of cheap labour. The Gentium-Damen consortium will also work on land development, taking about three years to finish. The consortium plans to rent shipyards of Chattogram and Khulna for shipbuilding purposes during that period. Upon completing the land development process, the consortium will shift its operations to Patuakhali, where the latest facilities will be available. Damen has 90 years of expertise in shipbuilding, with over 6000 prominent ships built under its portfolio. The company holds a strong reputation in the global industry for their diligence.
Gentium Solutions Group advisor Md. Kaikobad Hossain stated, “Damen is the leading shipbuilding company globally with 35 shipyards under their name around the world. The shipyard planned in Patuakhali will be their 36th undertaking.”
The proposed project aligns with the Bangladesh government’s vision to capture a significant portion of the global market in the shipbuilding industry. In the 200 billion USD shipbuilding and repairing industry, the government aims to grab a market of at least 2 billion USD with the help of the Payra port only. The government also aims to export high standard, industry-leading vessels to 17 countries using Damen Shipyard Groups.
It will create a significant amount of employment and catalyse the growth of connected SMEs and services around the port. The project’s success is crucial for ensuring Bangladesh’s sustainable growth post-LDC graduation.
Bangladesh started its journey in the shipbuilding market back in the late 2000s with a few small boats that were exported to Mozambique and a few other countries. However, the major game-changing point for Bangladesh in receiving global orders came from Europe in 2008. There were huge orders from 2008 from German and Danish buyers for multi-purpose cargo ships. Currently, Bangladesh serves about 0.84% of the global shipbuilding. The new facility and investment prospects largely depend on how well Bangladesh can integrate technology into its operations and infrastructure. The lack of technological capacity and expertise has proven to be the primary impediment to the sector’s growth in the past instances. The new facility in Patuakhali will open doors for the other shipyard projects in the country as Bangladesh will start receiving more orders for prominent ship and vessel building. This level of global exposure to Bangladesh’s shipbuilding and repairing industry will be highly beneficial for the industry. The consortium plans to take the standards of the shipbuilding industry of the country to newer heights, which will serve as a benchmark for other shipyard companies. Technologies used in the Patuakhali government initiative will be a role model for other shipbuilding and repairing facilities in Bangladesh. “The project will contribute to developing a reliable and competitive supply chain that will produce top-notch vessels to compete in the global market,” said the Industries Ministry press release. However, it is crucial to address the environmental aspects associated with the shipbuilding/breaking industry. The environmental effects of the shipbuilding industry include air pollution, water pollution, acoustic, and oil pollution. For the sake of our environment, the new infrastructure and regulations must facilitate sustainable practises in accordance with global standards. Subsequently, the government must proactively work on regulationary practices that prioritise the welfare of the people employed in the sector.
The consortium has plans to prepare the production and overall supply chain in a way that does not damage the environment heavily. It would be a significant challenge for the government and Gentium-Damen consortium. Moreover, China, having about 41% of the global shipbuilding market share and looking forward to growing more, would also be a concern for the project. Adaptation to technology and innovation at work will give the project the sharp edge it needs to compete for global demands.
The proposed project aligns with the Bangladesh government’s vision to capture a significant portion of the global market in the shipbuilding industry. In the 200 billion USD shipbuilding and repairing industry, the government aims to grab a market of at least 2 billion USD with the help of the Payra port only.
Considering all associated factors. The consortium and the government are jointly focusing on developing the site. This joint venture of some global experts and the government has enormous potential to ensure the envisioned landmark. the completion of the envisioned implementation and growth of this project could be immensely opportune for Bangladesh’s economy. The impact will reflect in the national economy once the projects are live and the consortium and the government start developing ships and exports. The national ship and vessel demands will also be met with such access to shipbuilding on such a large scale.
