The shipbreaking industry at Alang in Gujarat witnessed a 12 per cent drop in business during the just-ended fiscal 2017-18, as a two-year-old ship recycling policy struggled to infuse fresh life in to a sector that is increasingly being challenged by competition from neighbouring Pakistan and Bangladesh.
In 2017-18, a total of 253 ships weighing over 24.33 lakh Light Displacement Tonnage (LDT) beached at the shores of Alang that houses one of the world’s largest ship recycling yard. This is 12 per cent less compared to the 259 ships and 27.75 lakh LDT that was broken, reveals data from the Gujarat Maritime Board (GMB), the state’s nodal agency that controls all shipbreaking activities at the yard in Bhavnagar district.
The business at Alang is nowhere close to the highs witnessed in 2011-12 when a record 414 ships with 38.56 lakh LDT were broken at this yard having about 170 dedicated plots for shipbreaking activity. In the last seven years between 2011 and 2017, the tonnage of ships broken at the yard annually has fallen by 37 per cent.
While Ajay Bhadoo, CEO of GMB did not answer calls or messages, a senior official from GMB told The Indian Express on conditions of anonymity that “not a single new player has entered Alang” in the last two years after the new ship-recycling policy took effect. “Only 130 of the 154 plots at Alang are currently occupied. Others are still lying empty,” the official added.
Ship-breakers feel that their counterparts in Bangladesh and Pakistan are able to pay more and the new ship-recycling policy introduced by the Gujarat government in January 2016 has not been able to attract new players to the sector. “The demand of the ships is more in Bangladesh and Pakistan compared to India. The main source of steel for both of them is end-of-life ships. The ship-breakers in Bangladesh and Pakistan are able to pay USD 20 more for every tonne. Indian ship-breakers are able to offer about $420-430 per tonne in the international market, while they offer about USD 450-460 for the same ship and so the ship owners divert their ships to the neigbouring countries,” said Haresh Parmar, a ship-breaker at Alang and the honorary joint secretary of Ship Recycling Industries Association (SRIA), a body of ship recyclers.
Secondly, the demand from construction sector for recycled steel in India is low this year,” Parmar added. Ship-breakers at Alang also feel that despite the state government bringing in a ship recycling policy in January 2016, hardly new players have entered the ship-breaking business. “The new policy has attracted hardly any new players and the banks have also tightened their lending and not giving finance. Who will want to enter the ship-breaking business in such a scenario,” Parmar remarked.