Western Marine Shipyard Limited, well known as the leading shipyard building company in Bangladesh. They have gained a global reputation as shipbuilders by embarking on a journey through ship repair and marine supply exports. Bangladesh was once well known for its shipbreaking industry, which has posed a serious threat to the country’s coastal environment, as well as workers’ health problems and frequent accidents. Since the Western Marine shipbuilding activities, there has been a lot of potential for the transition from Bangladesh’s shipbreaking industry to the shipbuilding industry. Since its inception in 2000, Western Marine has built and delivered more than 150 ships. However, the company has not been able to build and deliver a single ship in the last one and a half years. Even more recently, Abu Dhabi’s Al Rashid Shipyard has filed a $5 million compensation lawsuit against the company for failing to deliver on time, which is currently pending in the High Court. What had happened that the leader of the country’s shipbuilding industry is now in the current situation of unserviceability?
History
The journey of Western Marine Shipyard started with the hand of Western Marine Services Limited. Western Marine Services Limited is continuing its work as a leading technical expert in the marine sector of Bangladesh. The company was established in 1994 by a team of experts in ship repair and marine supply. Later in 2000, Western Marine Shipyard Limited started its journey as a shipbuilder on its own 1.5 acres shipyard on the east bank of the Karnafuli River in Chittagong for the construction of inland vessels and dams. From its inception in 2000 till 2006, the company has built 52 vessels. These include ocean-going multi-purpose cargo ships, passenger ships, boats, oil tankers, ro-ro ferries, pontoons, barges, fishing trawlers, dredgers, tug boats, container vessels, etc.
In 2007, Western Marines expanded their shipbuilding facilities by hiring a variety of professionals ranging from Marine Engineers, Mechanical Engineers, Electrical Engineers, and Naval Architects. The company goes through such expansion mainly for the purpose of international export. In the context of which in 2007 the company gained recognition from the Bangladesh Board of Investment as a 100% export-oriented industry. That same year the company set up a shipbuilding keel for German Grona Shipping.
Expansion
In 2009, the company set up Keel to build an Oil Waste Collection Vessel for LAMOR Corp. in Finland. The same year, the company transformed from a private limited company to a public limited company. The company exported the first ship of LAMOR Corp in 2010. The company also received orders from the Karachi Port Trust of Pakistan to build two passenger ships. The company formed a joint venture with Holland-based dredger builder IHC to supply dredgers to the Asian market in the same year. Western Marine made history by delivering the largest export ship in the history of Germany to Grona Shipping in 2010 as well. In 2011, the company received an order from the Danish-based Hundested-Rorvig to build a double-ended car ferry and set up Keel. At the same time, the company is the first homemade RORO Ferry delivery for the Government of Bangladesh. In addition to this, the company established Western Fishers Shipyard Ltd in a joint venture with Fishers Shipyard with the aim of delivering fishing trawlers to the Asian market.
In 2012, the company delivered 2 passenger ships for Pakistan and completed the country’s most expensive shipbuilding project by delivering a total of 8 ships that year. The same year the company began to gain recognition as an IMS Certified Company. By 2013, a 50-meter double-ended car ferry was exported to Hundested-Rorvig, Denmark. The company also signed a contract to build a Catamaran Passenger Ship for the Tanzanian Government and an Intl. SOLAS Passenger Ship for the New Zealand Ministry of Foreign Affairs & Trade. In that year, the company’s revenue was more than BDT 2.44 billion and profit exceeded BDT 130 million. In 2014, the company set up Keel to build an offshore patrol vessel for the Kenyan government and delivered the Cataraman passenger ship to the Tangierian government. On November 2 of that year, the company started its journey in the stock market by being listed on the Dhaka and Chittagong Stock Exchanges.
In the 2015-16 financial year, the company signed an order to build 6 Bulk Careers from Jindal Group of India. The company also delivered two passenger vessels, a Ro-Ro Ferry, and a Pontoon to BIWTC that year. At the end of the 2015-16 financial year, the company’s gross turnover was more than BDT 2.55 billion, and the net profit stood at more than BDT 170 million. In the 2016-17 financial year, Western Marine received several shipbuilding orders from Gambia, Kenya, and the United Arab Emirates. The company’s net profit stood at around BDT 300 million against a gross turnover of over BDT 2.81 billion in that financial year.
In the 2017-18 financial year, the company received orders from the Bangladesh government as well as several other shipbuilders, and at the end of the year, the company’s profit exceeded BDT 450 million.
Present
However, in the 2019-20 financial year, the company was able to generate a turnover of BDT 2.28 billion and a gross profit of around BDT 200 million as per its annual report. Nevertheless, since 2019, the company’s activities began to come to a standstill. Unable to increase the number of orders and internal disputes over the repayment of loans taken from several banks and institutions, the company’s long-time managing director resigned. According to a report in The Business Standard, the company owes about BDT 20 billion to about 19 banks and financial institutions. On the other hand, the company has not been able to build any ships in the last one and a half years due to the rise in steel prices during the Corona epidemic. As a result, about 3,000 employees of the company have arrears of salary allowances of around BDT 80 to 100 million. As a result, many of the company’s engineers and experts have not returned to work, despite the fact that the pandemic has decreased. The company currently has only 15-20 employees in the shipyard and the shipyard has not yet been able to start operations. In addition to workers’ salaries, Western Marines have not paid any rent to the owners of the leased land in their shipyards in the last one and a half years. Of the 40 acres of land at Western Marine Shipyard, 28 acres were owned by the company, but the remaining 12 acres were leased. A landlord has raised a notice in the shipyard to put up walls so that the company can no longer build ships. Another owner of the shipyard has also sent a legal notice to Western Marines to vacate the space. According to a recent report in The Business Standard, Dubai-based Al Rashid Shipyard has filed a lawsuit against Western Marine Shipyard for $5 million in damages for failing to deliver on time. According to the agreement reached in 2016, Western Marine was supposed to deliver three ships for around BDT 500 million. The agreement stated that the ships are to be delivered by 2021, but the company has not even started building the ship, alleges Dubai-based Al Rashid Shipyard. On the other hand, the company has collected over BDT 1 million from Al Rashid Shipyard in several installments. Al-Rashid Shipyard has filed a petition for compensation and the matter is currently pending in the High Court.
Since its inception, Western Marine Shipyard has been conducting business in Bangladesh with great success. The company has made a significant contribution to the development of the shipbuilding industry in Bangladesh and the promotion of the shipbuilding industry in the international arena. Although the company is currently lagging behind on various internal issues, the Corona pandemic, and several other issues, it is hoped that in the future the company will be able to return to its previous position.
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