The shipbreaking industry at Alang clocked a feeble 4 per cent growth in 2016-17, despite a new ship recycling policy introduced by the Gujarat government in January last year. Competition from neighbouring Pakistan and Bangladesh also continued to affect business at one of the world’s prominent ship recycling yards in Gulf of Khambhat.
In the last fiscal, 259 ships beached on the shores of Alang were to be broken and recycled. This was only 4 per cent more than 249 ships that had visited this ship-breaking hub in 2015-16, according to data from the Gujarat Maritime Board (GMB), the state’s nodal agency that overlooks all shipbreaking activities at this yard located in Bhavnagar district.
“Compared to last year, the business in Alang is looking up. Currently, of the total 161 plots about 100 of them have ships and are functional,” said Captain Sudhir Chadha, port officer at Alang that has the largest stretch of beaches where old and ageing ships are broken. However, business is no where near the record highs of 2011-12 when 415 ships had beached at Alang.
During the last three months (January to March), fewer ships have arrived in Alang. Compared to 120 ships weighing 12,32,845 light displacement tonnage in 2015-16, this year only 64 ships with a total 6,26,995 LDT have arrived. Shipbreakers operating at Alang felt that increased competition from their counterparts in Pakistan and Bangladesh, coupled with a strong Baltic Dry Index — a sea freight index — are having a negative impact on Alang. “In the last two months, the number of ships coming to Alang has reduced drastically. Shipbreakers in Bangladesh and Pakistan are currently paying more for ships than India. While we are able to offer between $ 370 and $385 per LDT while purchasing the ships, they are able to offer $ 20 more per LDT. In such circumstances we are not able to compete,” said Haresh Parmar, a shipbreaker at Alang and the honorary joint secretary of Ship Recycling Industries Association (SRIA), a body of ship recyclers.
“Moreover, the improvement in the Baltic Dry Index has ensured that fewer ships are available to be broken,” Parmar added. The freight market is the single largest driver that influences ship scrapping. The lower the freight markets, the greater the number of ships ending up at scrap yards, official sources said. Shipbreakers also said that the new ship recycling policy has little impact in Alang. “Despite a new policy, there has been hardly any new player who has come into Alang. It is largely the older ones or their relatives who are continuing to conduct the business there. In the next fortnight, a few more plots are scheduled for auction, lets see if any new player steps in,” said a shipbreaker. Going forward, the shipbreakers felt that a stronger Rupee and rising steel prices will help boost the business.