...Assignment 4 THE CURRENT STATUS AND FUTURE OF SHIPBUILDING INDUSTRY IN BANGLADESH Prepared for: Shawkat Kamal Course instructor, Portfolio Management & Investment Analysis Prepared by: MD. FERDOUS KABIR ID No.: 140 Batch: 46D MBA Program INSTITUTE OF BUSINESS ADMINISTRATION UNIVERSITY OF DHAKA kabir_ferdous@yahoo.com April 1, 2013 INTRODUCTION: Bangladesh is a maritime nation with 1,66,000 sq. km area of sea, abundance with living and non-living resources. There are more than 200 rivers all around the country, with a total length of about 22,155 km, which occupy about 11% of total area of the country. Here rivers and water transports play a vital role for economical and commercial activities in Bangladesh. Major export and import of Bangladesh (about 85%) is also traveled by sea. At present more than 5,000 inland/coastal ships have been plying all over the country, which carry more than 90% of total oil product, 70% of cargo and 35% of passengers. More than 1,00,000 skilled workers and 150,000 semi-skilled workers are employed in this labor-intensive industry. All inland ships are constructed and repaired in local shipyards. Bangladesh harbours the second largest ship breaking industries in the world. They are the prime source of raw material including plate, frame, stiffener, longitudinal, pipe, old engine/generator, and even auxiliary machinery, for most of the local private shipbuilding yards. Those are used as raw material in manufacturing and repairing...
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...the near future. Thus, product diversification is necessary in that case shipbuilding could be a new horizon. The giant ship building nations such as Korea, Japan, China, and Vietnam have been booked with large orders for the next ten years. Some countries have already announced that they will not go for building ships less than 25,000 DWT (Dead Weight Tonnage). This opens up an opportunity for Bangladesh. If Bangladesh could nurture this opportunity with a helping hand from the government, as well as from other quarters, it could be the second largest export earning industry after ready-made garments within less than 10 years. But the shipbuilding industry of Bangladesh currently faces several problems such as high rate of bank guarantee, lack of working capital with low interest rate, lack of availability of land on river banks to build shipyards, etc., which should be solved on a priority basis to get results early from this industry. Bangladesh is a land of rivers and shipbuilding is synonymous with Bangladesh. Thousands of locallybuilt ships ply its inland waters. Almost 90 percent of petroleum and food products and 20 percent of passengers move through the waterways which has created the opportunity to build and use these water vessels here. Historically Bangladesh has a ship building infrastructure. Shipbuilding in Bangladesh is not new but the rise of export-oriented shipbuilding industry is. With the first export order for building ocean going vessel ...
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...Prospects of shipbuilding industry in Bangladesh Admin by Dr NM Golam Zakaria The rich history of shipbuilding in Bangladesh dates back to a long ago. Due to congenial geographical location of this part of sub-continent, people living here used to craft wooden boat for commuting and transporting goods. They also nurtured their heritage of craftsmanship in boat building over many centuries and transferred this artistic skill to subsequent generations across different cluster of population. Historical records say that Chittagong port was the best centre of building ocean-going vessels in the middle of the 15th century. Even in the 17th century, the entire fleet of ships of the Sultan of Turkey was built at Chittagong. Also in 1805, the British Navy built ships at Chittagong for the famous battle of Trafalgar. However, with the passage of time, the glory of shipbuilding in this region began to fade. Shipbuilding revived again when a number of local entrepreneurs of Bangladesh brought name and fame for the country by developing potential in shipbuilding by handing over some ocean-going vessels to overseas buyers from Denmark, Finland and Mozambique. Bangladeshi shipbuilders have also handed over few ice-class vessels to a German company and more vessels are going to be delivered by the next few years. Thus shipbuilding in Bangladesh is marching forward in a way to securing a firm position in the world market and at the same time, the country is returning slowly to its past tradition...
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...building industries in Bangladesh Abstract: Bangladesh has a thousand year old history in shipbuilding. There are more than 200 shipyards in the country, which are mainly engaged in building and repairing low quality inland vessels. Two shipwards have succeeded in making international classed vessels- and many more will come. It is about 15% cheaper to produce a ship in Bangladesh than anywhere else and the industry is expected to grow significantly. Introduction: Bangladesh is enjoying a boom in ship building. Driven by rising demand and a global supply shortage, existing players in the market have been able to capitalize on a global backlog in orders and sharp rises in prices. While investment in existing shipyards provides significant investment opportunities, investment in new yards may less compelling given two to three year lead times, a forecast fall in demand from 2011 and global dominance from China. However, leveraging its low cost base, adopting new technologies, coupled with government incentives and a strategic focus on areas such as small ships, Bangladesh could carve itself out a profitable niche. Bangladesh, through the course of time, has gained a comprehensive experience of building fine vessels in answer to her communication and transportation needs. From wood to steel, and from single-deck to multi-deck vessels, the country’s Shipbuilding Industry has developed over time and so has the labor force’s mastery...
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...Economic The shipbuilding and repair services industry faces impacts from global economic development, changes in economic growth patterns and expectations of increasing and/or decreasing growth in the future (Kakatkar, 2009, pg9). The industry’s main driving force is economic growth because sea is the main source of exportation and importation of goods and services across countries and continents (Nam Sung et al., 2009, pg2). Global shipping freight rates rose in 2013 to their highest level in more than 18 months. The measure, known as the Baltic Dry Index, is seen as a key indicator of global economic growth. The index tracks how much it costs for ships to carry dry-bulk commodities such as iron ore and coal. In reference to shipbuilding being a cyclical industry, Bloomberg Businessweek says “When the global economy is booming and trade is healthy, shippers scramble to meet demand with more and bigger ships. But the time it takes to build them is just long enough, in many cases, for booms to end and global trade to sputter. As more and more new vessels come online, the glut exacerbates the collapse in shipping prices, the industry scales back, companies go out of business, and the process begins again…” (NPR.org, 2013). An image of a feedback loop depicts how economic conditions influence the demand for ships. As can be seen from the loop, if the world economy improves, then the desired shipping capacity increases as there is more economic activity across the global such...
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...Bangladesh Shipbuilding industry now a promising sector November 15, 2007 The shipbuilding industry in Bangladesh is now becoming a promising sector as it has signed several contracts with Danish investors to build multipurpose vessels. On at least two instances, Danish shipping interests recently have placed substantial orders with Bangladeshi shipyards. Ananda Shipyard in Meghna Ghat and CS and Partnere A/S, a Danish ship consortium, have signed a agreement to build a ship, said a press release. The first ship – a 2,900 DWT multi-purpose vessel currently under construction at Ananda Shipyard and will be delivered in early 2008 – is the first of a series of up to 14 ships ordered by the Danish investors.The second order landed by a Bangladeshi shipyard was when Western Marine in Chittagong signed a contract to build up to 5 multipurpose vessels (4,100 DWT) to be delivered to a Danish ship consortium. ‘The two orders have positioned these shipyards as serious players in the international shipbuilding industry in strong competition with Chinese and Vietnamese shipbuilders, said Danish Ambassador to Bangladesh Einar Hebogard Jensen. ‘In order to live up to the highest international standards to design ship and to obtain international accreditation from bureaus such as “Germanisher Lloyd” and “Norske Veritas” it will be important for the shipyards to be able to import various fittings and components necessary for the ships to reach an international standard,’ Einar commented...
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...S PRODUCTION PLANNING AT VIKTOR LENAC SHIPYARD w 9B04D019 Authorized for use only by Christopher ODowd in MS 4343 at University of Texas at San Antonio from Aug 27, 2014 to Dec 19, 2014. Use outside these parameters is a copyright violation. Giorgio Sinkovic and Professor David M. Currie prepared this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. Ivey Management Services prohibits any form of reproduction, storage or transmittal without its written permission. Reproduction of this material is not covered under authorization by any reproduction rights organization. To order copies or request permission to reproduce materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661-3208; fax (519) 661-3882; e-mail cases@ivey.uwo.ca. Copyright © 2004, Ivey Management Services Version: (A) 2009-10-09 As the late afternoon sun descended over Mount Ucka, Ivana Boric sat down to prepare the production plan for the coming year at Viktor Lenac Shipyard. It was late May 2003, and the choppy seas caused by the Yugo wind from the southeast reminded her of the turbulent times facing Viktor Lenac. Recent expansion had increased fixed costs beyond...
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...Ship Design and Construction Written by an International Group of Authorities Thomas Lamb, Editor Volume II Y OF NA IET VA C O L CHITECT AR S & RINE E NG MA I The Society of Naval Architects and Marine Engineers 601 Pavonia Avenue • Jersey City, NJ • 07306 THE ERS S NE • Published in 2004 by Copyright © 2004 The Society of Naval Architects and Marine Engineers. ISBN 0-939773-41-4 The opinions or assertions of the authors herein are not to be construed as official or reflecting the views of SNAME. It is understood and agreed that nothing expressed herein is intended or shall be construed to give any person, firm, or corporation any right, remedy, or claim against SNAME or any of its officers or members. Design by Andrew MacBride. Printed in the United States of America by Sheridan Books. Contents Acknowledgments ix xv Author Biographies for Volume II Chapter 27 Multipurpose Cargo Ships 27.1 Description 27-1 27.4 References 27-35 Horst Linde, Berlin University of Technology, Faculty of Transport Technology, Institute of Land and Sea Transport, Germany 27.2 Design Issues 27-28 27.3 Ship Characteristics 27-35 Chapter 28 Reefer Ships Allan M. Friis, The Technical University of Denmark, Denmark 28.3 Design Issues 28-26 28.1 Description 28-1 28.2 System Design 28-8 28.4 Ship Characteristics 28-27 Chapter 29 Oil Tankers Michael Osborne, Shell International Trading and Shipping, UK, and R. Keith Michel, Herbert Engineering...
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...Ship Building Industry of Bangladesh The history of indigenous shipbuilding in Bangladesh goes back a long way. It is one of the early industries developed in Bengal based on its old business of building boats and sea vessels. Bangladesh has a strong background in building ships since ancient times. Many countries of Asia and Europe regularly bought ships built in Chittagong. Bangladesh has a strong background in building ships since ancient times. It is quite natural in that Bangladesh has more than 200 rivers with a total length of about 22,155km plus a long coast line on the Bay of Bengal. It is little known today that Bangladesh was the center of building ocean-going vessels in Asia between the 15th and 17th century. In the early 19th century, the shipyards of Chittagong built many commercial ships of up to 1,000 tons and also British navy vessels that participated in the battle of Trafalgar in 1805. Due to this historic prosperous background and also a natural geographical advantage, there are presently more than 200 shipbuilding and ship-repair yards in Bangladesh. | Ship Building Industry in Bangladesh | Prospect of Shipbuilding Industry in Bangladesh: The history of indigenous shipbuilding in Bangladesh goes back a long way. It began with wooden-bodied passenger vessels having two decks and gradually improved to steel-body construction of multi-deck passenger carriers in the eighties as the passenger transportation in reverine route...
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...PARAMETERS FOR SHIPBUILDING INDUSTRY IN BANGLADESH N. M. Golam Zakaria, M.M. Rahaman and Kh. Akhter Hossain Department of Naval Architecture and Marine Engineering, Bangladesh University of Engineering and Technology, Dhaka, Bangladesh gzakaria@name.buet.ac.bd ABSTRACT Despite Bangladesh has glorious history & heritage as a shipbuilding nation since ancient time, shipbuilding has been in focus only from the last couple of years. The optimism about this industry arose from the success attained by a number of local entrepreneurs who brought the name and fame to Bangladesh as a country with great potentials in shipbuilding by building and handing over some ocean-going vessels to overseas buyers. Since then, the shipbuilding in Bangladesh did not have to look back and now new opportunities are knocking at the door to flourish this industry further. However, due to global nature of this industry, an assessment of suitability to modern shipbuilding in terms of global standard is of prime importance. This paper focuses on studying some crucial competitive factors like labour skill, labour availability, labour man-hour, labour cost & productivity for local shipbuilding which are the inherent part for expansion of this industry. The analysis also focuses on the existing access to the resources like materials, knowledge and capital for shipbuilding. Comparison of these parameters with other nations have been made qualitatively and quantitatively to find the level of our shipbuilding. On the basis...
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...Shipbuilding in Ancient China Ships are one of the oldest and most important means of transportation along seacoasts, across the oceans, and inland waters. For hundreds of years, people have sailed the seas to explore, to settle, to trade and sometimes to conquer. Historians and archaeologists do not know when the very first individual ship was built. However, it is known that the ancient Egyptians were able to create watercraft with hulls using wooden planks and sails as early as 3000 BC. Egyptians used "sailing ships" to transport people and goods on the Nile. These ships were generally made out of reed and also used oars. Shipbuilding is the construction of ships and other floating vessels. It normally takes place in a specialized facility known as a shipyard. Shipbuilders are person (s) or group of people whose job or business is the design and construction of ships. Shipbuilding and ship repairs, both commercial and military, are referred to as "naval engineering". The construction of boats is a similar activity called boat building. China boasts a shipbuilding history as long as that of mankind. Spanning a time period of thousands of years, Chinese ships have evolved from rafts and canoes to wheel ships and today's steel vessels. The various ship models, structures, and propellers have vividly reflected the humankind's technological development and creativity, which is true with the famous ships in ancient China, such as the Lou Chuan (castle ships) of the Han Dynasty(206BC-220AD)...
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...Identifying and Analysing Underlying Problems of Shipbuilding Industries in Bangladesh Journal of Mechanical Engineering, Vol. ME 41, No. 2, December 2010 Transaction of the Mech. Eng. Div., The Institution of Engineers, Bangladesh 147 IDENTIFYING AND ANALYSING UNDERLYING PROBLEMS OF SHIPBUILDING INDUSTRIES IN BANGLADESH K. Shahriar Iqbal*, N. M. Golam Zakaria and Kh. Akhter Hossain Department of Naval Architecture and Marine Engineering, Bangladesh University of Engineering and Technology, Dhaka-100, Bangladesh *Corresponding email: iqbal.shahriar@gmail.com Abstract: Shipbuilding is considered to be a thrust sector in the economy of Bangladesh. But various problems are there to obstruct the development of this sector. This paper is aimed to identify the underlying problems and then analyze the nature of the problems to make it helpful overcoming the obstacles. A brief history and prospect of the shipbuilding industries in Bangladesh in the perspective of global scenario is also discussed. Key Words: Problem identification, shipbuilding industry, Shipyards. INTRODUCTION Bangladesh is a maritime nation with 1,66,000 sq. km area of sea, abundance with living and nonliving resources1. There are more than 200 rivers all around the country, with a total length of about 22,155 km, which occupy about 11% of total area of the country. Here rivers and water transports play a vital role for economical and commercial activities in Bangladesh. Major export and import...
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...Prospects of shipbuilding industry in Bangladesh by Dr NM Golam Zakaria The rich history of shipbuilding in Bangladesh dates back to a long ago. Due to congenial geographical location of this part of sub-continent, people living here used to craft wooden boat for commuting and transporting goods. They also nurtured their heritage of craftsmanship in boat building over many centuries and transferred this artistic skill to subsequent generations across different cluster of population. Historical records say that Chittagong port was the best centre of building ocean-going vessels in the middle of the 15th century. Even in the 17th century, the entire fleet of ships of the Sultan of Turkey was built at Chittagong. Also in 1805, the British Navy built ships at Chittagong for the famous battle of Trafalgar. However, with the passage of time, the glory of shipbuilding in this region began to fade. Shipbuilding revived again when a number of local entrepreneurs of Bangladesh brought name and fame for the country by developing potential in shipbuilding by handing over some ocean-going vessels to overseas buyers from Denmark, Finland and Mozambique. Bangladeshi shipbuilders have also handed over few ice-class vessels to a German company and more vessels are going to be delivered by the next few years. Thus shipbuilding in Bangladesh is marching forward in a way to securing a firm position in the world market and at the same time, the country...
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...performance, merit pay, skill based pay, gain sharing, and many more. Job designs and alternative work arrangements are also very important in increasing or decreasing employees’ motivation. Our group decided to focus on the motivational factors and the reality of it in a real business organization. We came across an acquaintance who currently works as Hyundai Heavy Industry (HHI). He told us about the unique culture of foreign dispatch system, common in industrial companies. According to our interviewee, foreign dispatch systems have clear pros and cons and that organizations use various methods in order to satisfy the ones who work abroad. Hyundai Heavy Industry is the world's largest shipbuilding company, headquartered in Ulsan, South Korea. It has seven business divisions: Shipbuilding, Offshore & Engineering, Industrial Plant & Engineering, Engine & Machinery, Electro & Electric Systems, Construction Equipment, and Green Energy. HHI was awarded a trophy to celebrate an achievement of exporting one hundred million dollars in 1974. Continuously, HHI was awarded one billion dollars trophy, five billion dollars trophy, ten billion dollars trophy, and fifteen billion dollars trophy before 2009, in the same field. HHI is one of the major companies which have more than twenty-five-thousand employees. Hyundai Heavy Industries Co., Ltd established a manufacturing plant of wind power generator...
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...HISTORY OF TRADE LIBARALIZATION The history of trade between nations has been a long and colorful one, interrupt by wars and dramatic changes in beliefs about trade. Because of the economic impact that trade has always had on civilizations, governments often become involved in trade with the goal of producing a particular economic outcome for their countries. Trade liberalization refers to the removal of government incentives and restrictions from trade between nations. It is a subject of much scholarly and political debate, given the impact that trade has on the livelihood of so many people, especially in developed countries. After independence in 1971, Bangladesh followed a of a highly restricted trade regime strategy. This was characterized by high tariffs and non-tariff barriers to trade and an overvalued exchange rate system that was supported by the import-substitution industrialization strategy of the Government. This policy was pursued with the objectives of improving the balance of payment position of the country and creating a protected domestic market for manufacturing industries (Bhuyan and Rashid, 1993). The trade regime registered a major shift in the mid-1980s, when a policy of moderate liberalization was initiated. However, in the early 1990s, large-scale liberalization of trade was implemented. Since then, successive Governments have reaffirmed their commitment to the development of a more liberal trade regime. Economists in particular have debated the advantages...
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