The ship recycling industry of Bangladesh, known for dismantling hundreds of ships annually, has seen its lowest import levels of scrap ships in a decade. Converting traditional shipyards to green yards requires significant investment, which most entrepreneurs find unaffordable without external assistance.
Speakers at the “Business and Finance Summit for the Ship Recycle Sector of Bangladesh” seminar on Tuesday called for government and international development organisation support for accessible loans to facilitate this transition.
The two-day seminar was held at Mohona Hall of Radisson Blu Chattogram Bay View.
PHP Family Director and Bangladesh Ship Breakers and Recyclers Association (BSBRA) Vice-president Mohammed Zahirul Islam, presenting the keynote paper, stated, “In the 1980s, commercial ship recycling activities began in the country. In 2011, the government declared ship recycling an industry and included it in the Ministry of Industries' agenda.”
Mentioning that the country became one of the five largest ship recycling countries in the world, Zahirul Islam said that this industry holds a 30 per cent share of the global market.
“Annually, approximately 200 ships are recycled in Bangladesh, amounting to around 2 to 3 million tonnes of LDT (Light Displacement Tonnage),” he said.
“About 60-70 per cent of the country's demand for iron-based raw materials (scrap) is met by this industry. It employs a significant number of skilled and semi-skilled workers directly. Additionally, the sector indirectly supports the livelihoods of approximately 200,000 to 250,000 people in backward and forward linkage industries,” the PHP Family director continued.
“The Bangladesh government earns about Tk 12 billion in revenue from this sector annually. Therefore, the ship recycling industry's contribution to the country's socio-economic development is remarkable,” he added.
Out of 156 BSBRA members, only 50-60 are currently operational, with just four converted to green shipyards. The Ministry of Industries approved the Ship Recycling Facility Plan for 108 yards to be converted into green yards.
BSBRA President Md Abu Taher said, “Converting small traditional shipyards to green shipyards requires an investment of Tk 30-50 crore, while medium-sized conversions need Tk 40-70 crore and large conversions need Tk 80-110 crore.”
“Due to various global problems and the lack of necessary funding, there is uncertainty about upgrading their yards to green shipyards by June 2025. Therefore, the lack of necessary funding for investment is one of the main problems of Bangladesh's ship recycling industry,” he said.
“To resolve this issue, necessary loans with easy terms are required from the government, Bangladesh Bank, IMO, and various domestic and foreign investors and donor organisations. For instance, over 100 yards in India's 'Alang' have been upgraded to green shipyards according to the Hong Kong International Convention with funding from the Japan International Cooperation Agency (JICA). Similarly, Bangladesh's yards can be developed. For this, the government needs to step forward,” he added.
Officials from the Ministry of Industries stated that the Bangladesh government ratified the Hong Kong Convention in June 2023, following the provisions of the Bangladesh Ship Recycling Act, 2018. This convention will come into effect in the last week of June 2025.
By this time, ship recycling yards must be upgraded to green shipyards according to the Hong Kong Convention. Otherwise, it is uncertain whether any ships from Europe or developed countries will be sent to Bangladesh for recycling after that period. To facilitate the transformation of yards into green yards, the Ministry of Industries has approved ship recycling facility plans for 108 yards.
