20 Danish companies look to partnership

A Danish delegation is expected to visit Bangladesh on November 8-13 to introduce them to relevant local industries to explore the possibilities of setting up long-term joint ventures.

The delegation will consist of delegates from about 20 Danish companies that are mostly active in the production of components and services required for shipbuilding and similar industries. A few other companies in fishery are also on the list.

Possible cooperation will be over Danish know-how and investments that will be combined with local knowledge and manpower skills, the Danish embassy in Dhaka said in a statement yesterday.

"Shipbuilding is a great opportunity to create jobs, diversify exports and develop Bangladesh. We strongly believe in the potential of the country's shipbuilding industry and also the fishery and food processing sectors,” said Einar Hebogård Jensen, Danish ambassador.

"I have followed the shipbuilding industry in Bangladesh with great interest for the last three to four years and was pleased when the first vessel meeting international standards was produced in Bangladesh and handed over to a Danish company last year," he said in a study on the shipbuilding sector in Bangladesh.

According to the baseline study done by the embassy, 10 Bangladeshi shipyards are expected to be capable of building high quality international classed ships of up to 10,000 DWT within a year or two.

Two shipyards have already made it on the international scene and have at present around 50 vessels in their order books from Danish, German, Dutch and Finish buyers, while the size of the contracts are around of $500 million and a memorandum of understanding has been signed for an additional $200 million.

“I strongly believe in combining Danish know-how with Bangladeshi low labour costs and hard work in joint ventures or other forms of strategic partnerships. This will give Bangladeshi companies the possibility to acquire the necessary skills and experience to supply the shipbuilding industry,” added the Danish ambassador.

The main strengths of Bangladeshi shipbuilding are its long history of maritime activity, the presence of favourable geographical advantages, the presence of a low-cost shipbuilding workforce and industry-related educational and training institutes, according to the study.

Significant government focus is placed on aiding the shipbuilding industry -- green channels for duty free market access and easy importation facilities have been created and a tax holiday is in the making, the study finds.

Bangladesh is believed to be 15 percent cheaper in building small ocean-going vessels than main competitors like Vietnam, primarily due to low labour costs, the study said.

At present, Bangladeshi companies can manufacture around 40 percent of the components for vessels built for local demand.