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Economic Contributions of
Ship Recycling in Bangladesh

Industry Perspective

Bangladesh is one of the leading ship recycling countries in the world. In the 1980s, the Bangladesh ship recycling industry emerged as one of the leading destinations for dismantling and recycling end-of-life seagoing vessels of the world. In 2015, the industry scrapped and recycled 222 ships weighing a total of about 2.4 million light displacement tons (LDTs). Such scale of domestic operation has placed Bangladesh at the top of the recycling countries in 2015 in terms of LDTs of scrapped ships. On average, the industry scrapped and recycled over 175 ships totaling about 1.8 million LDTs, a year over the past decade up to 2015. During this period, the Bangladesh ship recycling industry has accounted for over 25 percent of all ships scrapped by the five-leading ship-breaking nations – (Bangladesh, India, Pakistan, China, and Turkey).

Geographic Location & Accessibility to Connecting Construction and Steel Industries

All ship recycling yards in Bangladesh operate on the 18 Km. long Shitakundu-Bhatiyari coastal strip in the north of Chittagong. The geographical concentration of breaking yards in Bangladesh, a typical feature of ship recycling across the world, has been driven largely by locational advantages, benefits of necessary access to input supplies and enabling services, as well as by proximity to re-rolling and rolling mills for downstream processing of ship steel scraps. The concentration of ship breaking, reworking, and recycling yards in a specific location gives rise to economies of scope and scale which enhances industry productivity and thereby contributes to the ongoing growth and development of the ship recycling industry as well as other industries forward- and backward-linked with the ship recycling industry. The adoption of a relatively inexpensive tidal beaching method is one of the major factors that underpinned the past growth of the internationally competitive ship-breaking industry in Bangladesh (and also in India and Pakistan), taking advantage of the natural coastline for bringing ships ashore.


Labor Market

According to the statistics of the World Bank and YPSA (Young Power in Social Action, an NGO), about 22,000 to 50,000 workers are employed at ship breaking yards in Bangladesh directly whereas the number is around 100,000 to 200,000 indirectly.  This relatively condensed labor market has been possible owing to the availability of cheap labor. Also, the geographical location of the Sitakundu-Bhatiyari area is such that the majority of the people within the community are unable to find access to formal schooling and hence depend on daily labor-based activities for livelihood. These factors have resulted in making ship-recycling a profitable and sustainable business entity for the yard owners within this region. The ship-breaking industry is thus, directly and indirectly, contributing to the labor market not only in terms of providing livelihood but also connecting all parties involved with scrap materials, starting from third party wood wholesale and retail consumers to metal, asbestos, and machinery communities.

Global Perspective

According to many reports, the ship breaking industry in Bangladesh is estimated worth an annual turnover of around 1.5 billion dollars on average. It is estimated that approximately 30 percent of the world’s Light Displacement Tones (LDT) were scrapped in Bangladesh during the period 2000-2010. Today it has become a large and profitable industry for the nation. In 2015, a total of 21.80 million Gross Tons (GT) was recycled in the world and Bangladesh was the biggest ship recycler with 7.52 million GT (34.5%). (World Casualty Statistics 2015).


Bangladesh is considered to be one of the most active emerging ship-breaking nations. Ship Breaking Industries (SBI) met around 51% of the demand for raw materials and 37% of the demand for finished steel products. The rolling industry’s output in FY (Fiscal Year) 2010 was 1,451,000 tons; 23% of the input for this production was from ship-breaking sources. SBI was found to be the sole source of scraps for small re-rolling industries in Bangladesh, and their output in 2008 more than doubled as compared to 2005. In 2017, Bangladesh scrapped a total of 197 ships and which was 6.5 million GT ( Larger rolling industries fulfilled their input needs for steel scraps by using both SBI and imported materials. We found a sharp increase in input imports during the global ship-breaking recession in 2003–2007 and when Bangladesh's SBI faced a temporary ban in 2010.


Ship breaking plays an important role in the national economy by different means. Because of having cost-effective human resources, simple importation facilities, enthusiastic entrepreneurship, Bangladesh is having a steady expansion of this industry and hence the contribution is immense. The scrapping of ships provides the country’s main source of steel and in doing so saves a substantial amount of money in foreign exchange by reducing the need to import steel materials. Reports say, that at present Bangladesh has a demand for 50,0000 tons of metal/steel, but Bangladesh has no iron ore sources or mines, which make ship scrapping, an inevitable and important source of raw materials. More than 350 re-rolling use ship scraps as their raw materials. The industry is currently supplying more than 50% of the raw materials for the local steel industry. A good number of local industries including heavy and light engineering already been developed depending on the ship breaking industry. In some ways, it can be considered a “green industry”. Almost everything on the ship and the ship itself is recycled, reused, and resold. The scrapping of ships supplies raw materials to steel mills, steel plate re-manufacturing, asbestos re-manufacturing as well as providing furniture, paint, electrical equipment and lubricants, oil to the number of businesses that have sprouted up specifically as a result.


In order to promote the ship recycling industry as a green industry, the government and relevant stakeholders are considering the aspects of the Hong Kong Convention (HKC) to be implemented as quickly as possible. This step will be a pivotal commencement in terms of harnessing the benefits of the blue economy for the future and also become an intriguing factor for establishing ship recycling as a safe, sound, sustainable, and environment-friendly industry in Bangladesh.

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