JOURNAL # 3

NAME: FAIZ IBNE HOSSAIN NAME: WASIF UL ALAM COURSE: MGT 372

ID: 081 072 530 ID: 082 014 030 SEC: 6

Zone for shipbuilders soon

Bangladesh plans on establishing a special shipbuilding zone to promote the export-oriented shipbuilding sector. As per Jalal Ahmed, EPB vice chairman, The Export Promotion Bureau (EPB) plans on establishing a shipbuilding zone to accommodate top exporters on the same premises and help the sector to expand by providing more incentives and supports. The officials said that they aim of earning $5 billion a year from exports by 2015. Bangladesh needs to diversify the types of items it exports in order to sustain as its economy now is dependent on only traditional export items. The shipbuilding and ICT sectors have the potential to diversify our export basket and generate more employment, Ahmed said The leading ship-builders who make ocean-sailing ships for international buyers are: Ananda Shipyard and Slipways Ltd, Western Marine, Highspeed Shipbuilding, Dhaka Dockyard and Engineering Works, Khan Brothers Shipbuilding Ltd and Karnaphuli Shipyard, and they have orders of building and supplying of ships worth $478 million which has to be delivered by the year 2013. Hence by establishing a common premise for these companies to work on not only will it allow for more productive and efficient production line, but may also enable more business to be attracted in the future because of this. As mentioned in the article, the global recession enforced many ship-building orders to be directed towards Bangladesh. Other reasons for such attraction of orders are the availability of cheap labor in Bangladesh and the abundance of scrap metals which are needed for the building of such ships.

But the past reputation of Bangladesh often leads the country to unprecedented situations. For example, as mentioned in the article, MA Rashid, managing director of Karnaphuli Shipyard, said his company received a good number of queries on dredgers and container ships from the world's top shipbuilders and suppliers, but they are yet to reach a final decision. There the leading players of the industry also needs to take some drastic measures to overcome such doubts and misconceptions the international market has about the country as only by doing so will the industry be able to compete at full capacity in the international ship-building market. Bangladesh, over the last thirty-nine years of its existence, has been able to develop only a few export-oriented industries of any significance, and Shipbuilding is one of them. Competitive wage costs and easily trainable workers provide this country with a decisive edge over other prospective countries in this industry. As a result, Bangladesh can turn itself into a hub of shipbuilding in the global context for small and medium-sized vessels. In order to amplify the earnings for this shipbuilding sector government can also issue cash incentives which would contribute in establishing an integrated shipbuilding zone. Currently the Chittagong port has the most significant shipbuilding industry. Government can diversify the industry by setting up shipbuilding zones in other few areas specially Mongla, Meghna and Patuakhali. Such initiative will not only increase the export but also would be in a position to be more competitive than India, China and Vietnam, particularly in the less sophisticated segment of the industry. If such competitiveness can be achieved, this would lead to greater health and vitality of the existing shipbuilding companies and motivate new entrepreneurs to try out their hands in this growingly lucrative sector.

Source: http://www.thedailystar.net/newDesign/news-details.php?nid=158739 Date: October 17, 2010