Existence of ship breakers at stake
Thursday, 30 October 2008
Our Correspondent
CHITTAGONG, Oct 29: Shipbreaking industry of the country is now under the grip of great crisis following unprecedented fall in the price of the scrap vessels in the international market. The very fate of investment worth Taka 55 billion (Tk.5500 crore) already been made by different banks on this industry is also becoming bleak.
Bangladesh Ship Breakers Association (BSBA) has sought government intervention to get over the current situation. It has also sent a memorandum to the Chief Adviser Monday in this respect.
The President of BSBA Zafar Alam told the FE that the very existence of the ship breakers is at stake as the price of the scrap vessels has alarmingly declined in the global market and under the circumstances, the shipbreaking companies are apprehending bad days in future. They are now simply counting their days amid uncertainty.
However, the ship breakers are still optimistic that the industry rescued from disaster, if special initiative is taken by the government in time, he said.
BSBA chief further said, not only the owners of the shipbreaking industry, its employees are also gravely concerned. International market of the scrap vessels is now pursuing a downward trend and within a gap of only one month, its price has declined by up to 55 per cent.
Price of each ton of scrap vessel was around 800 US dollar in the month of September, which has now been reduced to 350 dollar. Such a fall in the price in the global market has had an adverse impact on local market too.
BSBA president said that the extent of losses in the scrap market ranges from Tk.24,000 to Tk.28,000 per ton at this stage. Side by side amount of interest of bank loan drawn at the time of opening LC for buying the scrap vessels, is being increasing gradually.
Under the circumstances, most of the shipbreaking companies are afraid that they would be able to meet the liabilities of banks. Moreover, banks have also suspended advancing loan on importing scrap vessels, BSBA chief added.
BSBA sources said, BSBA in its memo transmitted to the Chief Adviser has called for taking a number of steps for saving the shipbreaking industry from disaster. As it won't be possible to refund the dues of the banks through selling the scraps kept in the yards, it applied for waiving interest on bank loans for the next 3 months provisionally, advancing loan on easy term for procuring scrap vessels as per current market price and extending the time limit of refunding loan upto one year.
CHITTAGONG, Oct 29: Shipbreaking industry of the country is now under the grip of great crisis following unprecedented fall in the price of the scrap vessels in the international market. The very fate of investment worth Taka 55 billion (Tk.5500 crore) already been made by different banks on this industry is also becoming bleak.
Bangladesh Ship Breakers Association (BSBA) has sought government intervention to get over the current situation. It has also sent a memorandum to the Chief Adviser Monday in this respect.
The President of BSBA Zafar Alam told the FE that the very existence of the ship breakers is at stake as the price of the scrap vessels has alarmingly declined in the global market and under the circumstances, the shipbreaking companies are apprehending bad days in future. They are now simply counting their days amid uncertainty.
However, the ship breakers are still optimistic that the industry rescued from disaster, if special initiative is taken by the government in time, he said.
BSBA chief further said, not only the owners of the shipbreaking industry, its employees are also gravely concerned. International market of the scrap vessels is now pursuing a downward trend and within a gap of only one month, its price has declined by up to 55 per cent.
Price of each ton of scrap vessel was around 800 US dollar in the month of September, which has now been reduced to 350 dollar. Such a fall in the price in the global market has had an adverse impact on local market too.
BSBA president said that the extent of losses in the scrap market ranges from Tk.24,000 to Tk.28,000 per ton at this stage. Side by side amount of interest of bank loan drawn at the time of opening LC for buying the scrap vessels, is being increasing gradually.
Under the circumstances, most of the shipbreaking companies are afraid that they would be able to meet the liabilities of banks. Moreover, banks have also suspended advancing loan on importing scrap vessels, BSBA chief added.
BSBA sources said, BSBA in its memo transmitted to the Chief Adviser has called for taking a number of steps for saving the shipbreaking industry from disaster. As it won't be possible to refund the dues of the banks through selling the scraps kept in the yards, it applied for waiving interest on bank loans for the next 3 months provisionally, advancing loan on easy term for procuring scrap vessels as per current market price and extending the time limit of refunding loan upto one year.