Ship recycling yard in Gujarat sees a dip in business

By: |
March 16, 2021 1:15 AM

Since the beginning of 2021, only 26 new vessels have reached Alang Yard, says Ramesh Mendpara, vice president of Alang Ship Recycling Industry Association adding, “On an average 30 to 35 ships arrive at Alang per month.

In January 14 ships were bought by Alang based recyclers and in February figure further shrink to only 12. In the current month, domestic recyclers could hardly buy 10 vessels.”

The world’s largest ship recycling yard at Alang in Gujarat is experiencing a sudden slump in business over the past couple of months as ship recyclers in neighbouring Pakistan and Bangladesh are offering higher prices for the vessels coming for dismantling.

Since the beginning of 2021, only 26 new vessels have reached Alang Yard, says Ramesh Mendpara, vice president of Alang Ship Recycling Industry Association adding, “On an average 30 to 35 ships arrive at Alang per month. In January 14 ships were bought by Alang based recyclers and in February figure further shrink to only 12. In the current month, domestic recyclers could hardly buy 10 vessels.”

The recyclers in the neighbouring countries are offering as high as $460 to $470 per ton. “Recyclers in India have been mandated to follow green shipbreaking guidelines, which are not being followed in Pakistan and Bangladesh. As a result of it, they can afford to quote higher prices,” claims Mendpara.

Post worldwide lockdown, ship recycling business at Alang attracted good business. From June 2020 onward recycling started recovering amid the Covid-19 pandemic situation as many merchant ships across the world were sent for recycling. Alang based recyclers anticipated huge business opportunity but the bulk of the business went to neighbouring Pakistan and Bangladesh.

As per the official data of Gujarat Maritime Board (GMB) during the year 2017-18 the yard handled 24.33 MT scrap by dismantling 253 ships. In the year 2018-19 and 2019-2020 the Alang yard handled 17.73 lakh MT and 16.22 lakh MT through 219 and 202 vessels respectively. During the current financial year, nearly 165 ships have come to Alang for dismantling. With hardly a fortnight remain for the completion of the current fiscal, the total number of ships at Alang wouldn’t cross 175, laments Mendpara.

He says that the state government and GMB needs to think about the reduction of exorbitant tariff and rent because the central government is in the process to double the tonnage capacity of Alang from the existing 50 lakh tonne per annum. For this purpose, Union Finance Minister Nirmala Sitharaman announced Rs 1724 crore corpus, he added.

At present 153 plots (units) are operating at Alang. The yard is blessed with a high tidal range, a long beach with a gentle slope and firm ground facilitating the beaching of ships just at the threshold of the plots. Since the inception of the yard in the year 1982-83, the highest number of ships (415) came to the yard in the year 2011-12 and 38.5 metric tons (MT) of scrap was handled. The recycling industry is providing direct and indirect employment to nearly five lakh people.

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