Country's shipbuilding industry has been hurt by slowing demand for export of ships from the key market such as EU countries, but evidence of possible turnaround is strong in the emerging Europe by next year.
There is a huge demand for Bangladeshi small and medium ships in the North America as well, which will be the prime target for local shipyards and the Western Marine Shipyard (WMS) is already in negotiation with certain potential buyers for new orders from the NA.
The main reason why ship-owners from all over the world are getting more and more interested to invest in Bangladesh is its strength for vast and cost effective workforce and the pool of workers are available.
Standard of living is less expensive in Bangladesh compared to other shipbuilding nations like Japan and Korea and it gives us a huge cost advantage while quality and time are managed in the most efficient manner, observed a leading shipbuilder of the country.
But in spite of financial incentive received by the industry currently from the government the shipbuilding is facing challenges of a huge gap between investment and return due to excessive bank interest and lack of long term loan scheme, said the industry insiders.
Ship builders in Bangladesh are giving extremely high bank rate such as 16-17 per cent on loan while China's bank rate in the sector is 1 per cent, Japan half per cent, and in Europe it is 3 per cent.
Besides, China and other countries sell ships on supplier's credit and the shipbuilders are getting long term finance for 10 to 15 years. Local shipbuilders get short term loan for 2 to 3 years, said engineer Sakhawat Hossain, managing director of the country's leading shipbuilder Western Marine Shipyard.
"In shipbuilding business the past record is very important. Local builders have made the ships for Finland, Germany, Pakistan and Denmark. As Bangladesh is very new in ocean-going vessel export industry, stepping into new countries is very important. The ships that we have already built will be testifying our credibility and bringing in new orders," he said.
It is forecasted by experts that if the growth continues in this momentum, Bangladesh only from single industry could turn into a middle income country (MIC) from its current status of LDC (least developed country), he added.
He demanded supplier's credit and long term bank loan on interest rate at around 10 per cent to grow up a robust shipbuilding industry in the country. This industry also requires a special economic zone with the facilities that shipyards require like heavy logistics, river mouth and access to a nearby port. This way the foreign buyers will feel more secure to invest rather depend on one or two shipyards dispersed in different places of the country.
WMS sources said currently it has orders for 19 ships of small and medium sizes and all of them are from the local buyers. But foreign buyers of the WMS ships have slowed down their orders for export due to lack of breaking free of setback sparked by financial crisis.
Western Marine Shipyard has secured orders for six containers ships of around 150 TEUs (twenty-foot equivalent unit) on average out of 50 licenses issued by the government.
Building of the ships is going on in full-swing and they are expected to be delivered to concerned buyers within next few months. They will transport cargo from Chittagong seaport to Pangaon Inland Container Terminal (PICT) which will be able to carry 0.25 million TEUs per year.