'Financing major problem for local shipbuilders'

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FE Report
Financing is now the major problem for development of the country's shipbuilding industry, said stakeholders in a meeting Wednesday.
They said lack of comprehensive policy, cost of fund, bank guarantee and power crises are the other hindrances for the sector. They also said the government should reduce import duty and tax to tap the huge potential of the inland shipbuilding sector.
They were speaking at a meeting of the stakeholders on 'Identifying Regulatory Barriers and Improving Transparency in Shipbuilding', organised by International Business Forum of Bangladesh (IBFB) in collaboration with USAID Progati at its Banani office.
"We now have orders amounting to Tk 9.0 billion, but we are afraid of not getting required finance to deliver the ships, as the banks are suffering from liquidity crisis," said Shakhwat Hossain, managing director of Western Marine Shipyards Ltd.
He said Bangladesh Bank had a Tk 2.0 billion refinancing scheme, from which no shipbuilder was ever benefited.
"Bangladesh can export 12 to 14 ships annually, if its full production capacity is used," said Abdur Rahim, executive director of Khan Brothers Shipbuilding Ltd.
Local shipyards - Western Marine, Ananda, Khan Brothers, Dhaka Dockyard, Bashundhara, South Marine Dockyard and Shipbuilders Ltd - are building ships for buyers, and at present they have order for 70 ships. Ananda Shipyard and Western Marine are exporting ships also.
"Bangladesh now has orders worth Tk 14 billion for the next two years. Western Marine has export order for 10 ships and eight local ships," Mr Shakhwat added.
The stakeholders of the shipbuilding industry emphasised a comprehensive policy for the export-oriented sector, like the RMG sector. They also demanded to place the sector's operation under one specific ministry, as the government declared it a thrust sector in the Industrial Policy 2010.
"We do not have any comprehensive policy for shipbuilding, which is the major barrier for the development of the sector. China has banned export of steel plate to protect their industry. But there is no policy here regarding this raw material," said Mr Shakhawat.
Last year China emerged as the top ship-building country, superceding Korea and occupying 40 per cent of the total global market share. China wants to capture 50 per cent of the global market within this year.
Steel, the major raw material for building ships, has 25 per cent import duty, he said. "Overall import duty of materials, like steel plate, machinery, engine, generator and pump, ranges from 25 to 85 per cent, which is on an average 35 per cent, resulting in high production cost and losing of competitiveness in global market."
"For developing the local ship building industry the government must reduce the tax and import duty."
"Bangladesh will need more ships like oil tanker (for carrying fuel to power plants), container ship, cargo ship and passenger ship in near future," he added.
Saiful Islam, chairman of Western Marine Shipyard Ltd, Masud Hossain, managing director of South Marine Dockyard and Shipbuilders Ltd, M Saiful Islam, technical director of Ananda Shipyard Ltd, Sohel A Chowdhury, former commerce secretary, AKM Motahar Hossain, former shipping secretary, Khorshed Alam, additional secretary, Mahmudul Islam, president of IBFB, and Brig Gen M Mofizur Rahman, executive director of IBFB, also spoke on the occasion.