Founding ship recycling on sound footing

When he started in 1969, Sufi Mohammad Mizanur Rahman had a vision to work for social welfare through business. Almost 50 years have passed. The PHP Family has become a model of how businesses can flourish and uplift the communities in which they operate. It is now an enterprise of 30 companies operating in diversified sectors including aluminum, textiles and spinning, galvanising, power plant, petro-refinery, rubber, university, media, insurance, stocks and security, agriculture, ship-breaking, Proton brand car assembling, and, most prominently, steel and float glass.

PHP Family Chairman Sufi Md Mizanur Rahman received the 'Pride of Chittagong' award jointly given by the Daily Purbokone and GrameenPhone for his outstanding contribution to business and industry. He received the Standard Chartered-Financial Express Corporate Social Responsibility Award 2016.

Giving a brief background of the pioneering industrial conglomerate, Zahirul Islam Rinku, Managing Director of PHP Ship Recycling Industry and Director of the PHP Family, said the conglomerate would invest an amount of USD 4.0 billion (Taka 34,000 crore) to establish an integrated steel plant in the Mirsarai Economic Zone. The plant will be established in two phases within next three years, which will produce three million (30 lakh) tonnes of basic steel per year. The PHP will supply USD 1.0 billion ($ 100 crore) worth of finished products from the plant to the local market and will export steel products worth $ 500 million ($ 50 crore) to African countries. He said the Bangladesh Economic Zones Authority (BEZA) already allotted 500 acres of land for establishing the integrated steel plant at the Mirsarai Economic Zone in Chattogram.

Regarding gas connection, the PHP director said gas inside the Mirsarai zone would be available by March 31 as said by BEZA Executive Chairman Paban Chowdhury. The units will get electricity from two 230megawatt power plants, which are under construction inside the zone. The BEZA will also upgrade its existing one-stop service centre by December 31, 2018 to provide investors with over 100 types of information from a single platform. At the event, Abul Kalam Azad, Principal Coordinator for Sustainable Development Goals Affairs at the Prime Minister's Office (PMO), said the gas would be supplied from imported LNG and the industrial units would not suffer from any gas crisis any more.

The introduction of the one-stop service centre and proper utility connections to the industrial units will help Bangladesh upgrade its ranking from 177 to 99 in the World Bank's 'ease of doing business' index by 2030.

The PHP started its ship-breaking and recycling industry back in 1982 and has a capacity to handle approximately 150,000 tonnes of scrap a year. A new ship recycling law in Bangladesh has set a five-year target for the country's ship-breaking yards to improve the management and regulation of the industry to the highest international standards. The Bangladesh Ship Recycling Act 2018 was passed in January last to ensure standards as of the Hong Kong Convention (HKC).

The Bangladesh ship-breaking industry entered the green recycling era with beaching the country's first ever green ship at the PHP Ship Breaking and Recycling Industry at the Sitakunda beach. Bangladesh's only ship recycling yard with HKC certification received its first green vessel for recycling from Vale.

Managing Director of the Shipyard, Zahirul Islam, said it would recycle a 233,000dwt (dead weight tonnage) ship, a very large ore carrier built in 1989. Mr Islam said the deal represents a historic and significant development as it is the first demolition sale to the Bangladeshi yard since it was given a statement of its compliance (SOC) with the Hong Kong Convention for the safe and environmentally sound recycling of ships by Italian classification society RINA in October 2017. The SOC demonstrates that a ship recycling facility meets a wide range of stringent environmental and social criteria listed in the HKC.

There is a bigger role for the ship owners to play, to ensure safe and green recycling of their ships. The ship owners are not keeping the pace with the green yards and there is no much incentive for the yard owners to go green. Every yard owner would like to earn return on their investment and the ship owners have to provide extra incentives on the green option. Only then, the other yards in Bangladesh will be motivated to become compliant, he observed.

For PHP, which has an annual turnover of about $1.0 billion, ship recycling is only 4.0 per cent of its entire business portfolio. So, it was easier for the yard to make a big investment. But the other yard owners, who are only involved in ship recycling business, require potential returns to upgrade their scrap yards to an acceptable level of compliance. A typical yard in Chattogram will require $3.0 to $4.0 million to comply with the standards in the HKC as the scrap yards are almost double the size of an average Indian yard.

Dubai-based GMS, one of the world's largest old ship sellers, congratulated the Luxembourg-based NGO Friendship for supporting an HKC-compliant yard in Bangladesh - the PHP Ship Breaking and Recycling Industry, recognising its expertise in responsible ship recycling. Greenpeace recognised that safe and responsible recycling, using the beaching method could be conducted in the Indian subcontinent and that Bangladesh specifically could be a green recycling destination, said the PHP Shipyard authority.

By acquiring the SOC, the PHP Ship Breaking and Recycling Industry has proven that responsible ship recycling is possible in Bangladesh. It is also important to mention that the Ministry of Industries gave their wholehearted support to the PHP Ship Breaking and Recycling Industry Ltd to attain this milestone.

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