No doubt demand for local steel and iron is being increasingly met from ship scraps at various shipyards of the country. Suffice it to say, the local supply source has, to some extent, contained price spiral besides helping a number of steel plants--- quite a few of them equipped with state-of-the-art technology --- run successfully. To ensure that import of scrap ships remains unhindered, the concerned quarters have urged the government at a pre-budget parley recently to provide fiscal benefits by way of reduced VAT and customs duty. Observers consider the plea rational, particularly in view of rapid price hike of steel in the international market.
Ship breakers have urged the National Board of Revenue (NBR) to lower import duty on scrap ships by two-thirds to stabilise the prices of iron and steel products in the local market. They proposed to cut the rate from Tk 1,500 to Tk 500 per tonne to facilitate the country's construction sector. They argued in favour of the proposed cut saying that due to price hike of scrap ships and increased exchange rate of the dollar, prices of raw materials of the country's iron and steel sector also increased, adversely affecting the local construction industry.
Bangladesh currently ranks number one importer of scrap ships and local ship breakers dismantle half of the world's discarded ships. The total number of ships imported for scrapping in 2021 was 254 and more than eight million tonnes of metal were dismantled, according to a report published in this newspaper. Presently, there are 160 shipyards in the country of which 70-80 are in operation. More than 300 re-rolling mills are using ship scraps as their raw materials while ship-breaking industry meets more than 60 per cent of the raw materials for local steel industry.
A highly prospective sector, ship-breaking is estimated to be worth around US$2.0 billion. While it offers employment to around three hundred thousand workers, it has the proven capacity of supporting a vast array of heavy and light engineering industries. Iron rods and billets recycled from ship scraps, believed to be of high quality, meet a major portion of domestic requirement in the construction sector. Old ships meet 80 per cent of the demand for raw materials in the rerolling mills. Experts have opined that Bangladesh is a unique place for ship-breaking and ship-recycling as nearly all the products available from dismantled ships are being used locally. Moreover, as the advanced countries have stopped ship breaking because of the high cost of labour and accompanying compliance issues, ship breaking has all the prospects to thrive in countries like Bangladesh. So, it is of critical importance for those directly associated with the sector to make sure that the country is well poised to reap the gains from the opportunities offered by it. This can only be done if the challenges associated with the task are met in an appropriate manner.