Ahmed Khan Malik

The shipbreakers in Gadani area of Balochistan have sought incentives from the federal and provincial governments to help revive the sector, which is one of the key components of the provincial economy. 

Gadani is located 50 kilometres from Karachi and is part of the Hub District. With a coastal belt and fisheries potential, Gadani is known for the shipbreaking industry, which has been facing troubles for the last many years after the arrival of small vessels from abroad amidst stiff competition from other regional countries. Shipbreaking is the process of disposing ships by dismantling them for reusable parts or for extraction of metals as raw material. Ships are driven up to the shoreline and taken apart manually. Shipbreakers seek financial and taxation relief for the sector, which would also boost growth of the construction industry linked to low-cost steel.  “Lack of the federal government’s attention towards the shipbreaking sector may bring it to a closure that may end supply of low-cost steel to the poor segments of the society for construction,” Asif Ali Khan, Vice-Chairman of Shipbreakers Association, told WealthPK.

He added that federal authorities should support this very important industry. He said that the industry needed necessary incentives for growth to help provide a value-added raw material to the steel industry to meet local requirements rather than directly importing the re-rollable scraps.  Highlighting the significance of shipbreaking in the country, he said it is a major industry in Balochistan, providing jobs to over 25,000 skilled and unskilled workers in Gadani with additional 200,000 workers in downstream industries. “However, this industry was deliberately made to fail during the last two years," he said. “The shipbreaking industry is a major source of the best quality raw material to steel processing and manufacturing industries in the country, including rerolling mills, small-scale steel cottage industries and melting furnaces,” he said. “This sector has served as one of the largest sources of steel raw material in the country for last five decades,” he said.

The shipbreakers’ association vice-chairman said that the industry suffered badly after dollar appreciated massively in the last two and half years. “It was the dollar rate that badly affected the shipbreaking industry in Gadani. High value of the US dollar is sinking this industry fast.” Asif said the shipbreaking industry had a 20% share in the total steel supply of the country. "The shipbreaking industry mostly supplies long steel products, which are used in the construction sector." He said the industry had the capacity to process three million tonnes of steel through dismantling of ships. “The shipbreaking industry has informed the government about its plight. However, as long as the dollar remains on the higher side amid continued economic uncertainty prevailing in the country, there is little hope for any improvement in this sector’s fortunes,” Asif said.

Credit: INP-WealthPk