Bangladesh's shipbuilding sector caught between hope and uncertainty

Bangladesh's ship exports first turned heads 16 years ago, earning a surprising $40.44 million in foreign currency in their debut year.

Entrepreneurs, expecting the momentum to continue, invested heavily, and a 16 percent rise in earnings the following year only fuelled their confidence.

But the eurozone's economic downturn knocked the sector off course in its third year, with earnings falling 88 percent.

A further 1,202 percent decline in the fourth year left the sector adrift in a sea of disappointment.

Earnings climbed for three straight years, reaching $65.61 million in 2016-17, the highest ship export earnings in Bangladesh's history.

The decline resumed the following year, before the COVID-19 pandemic upended the sector entirely.

Bangladesh earned no foreign currency from ship exports at all in FY2021 and FY2022.

A token amount returned in FY23, only for earnings to fall back to zero in FY24 amid the shock of the Russia-Ukraine war.
Over the past two years, though, the shipbuilding sector has begun rebuilding hope.

Exporters have launched fresh initiatives and are recalculating their prospects, hoping they will not need to look back again.
This is how the sector's fortunes have swung between hope and despair.

The latest Export Promotion Bureau (EPB) data show Bangladesh exported $22.53 million worth of ships in the fiscal year that ended on Jun 30, up 666.33 percent from the previous year's $2.94 million.

Dhaka's Ananda Shipyard and Slipways became the country's first ship exporter, sending a cargo vessel to Denmark on Sept 14, 2008.

Chattogram's Western Marine Shipyard followed in 2010, exporting a sea-going vessel to Germany on Nov 30 that year.

These remain the only two companies exporting ships from Bangladesh.

Coastal nations worldwide have increasingly focused on ocean-based economic activity in recent years, spanning fisheries and mineral extraction, marine renewable energy, maritime tourism, and maritime security and research.

Unlike the cargo ship market, the specialised high-tech vessel market doesn't see the same volatility, which is what drew Bangladesh's shipbuilders towards this promising export segment.

The government has also taken steps to boost exports in this sector, offering cash incentives, a special fund and tax breaks to exporters, while banks have extended substantial financing to the industry.

In early 2021, the then government introduced a policy projecting annual ship export earnings of $4 billion.
The promise shipbuilders showed a decade and a half ago proved short-lived.

From 2011, the global shipbuilding downturn began hitting Bangladesh directly, with foreign buyers cancelling numerous export orders.

The pandemic and the Russia-Ukraine war dealt further heavy blows to domestic entrepreneurs, with loan repayments from the two ship-exporting companies falling into irregularity.

Still, they are now trying to get back on their feet, leaning on the government's special policy support.
Western Marine Shipyard Managing Director Sohail Hasan told bdnews24.com, "For about two and a half years in between, we couldn't export a single ship.

“It wasn't just us, nobody exported any ships. Our industry really hit rock bottom. We never imagined we'd face such a precarious situation.�" bdnews24.com