NYK Recycles First Ship in Bangladesh After HKC Certification

After years of pressure on the shipbreaking sector and specifically in emerging countries such as Bangladesh, the industry is marking a milestone with the first direct sale of a ship from shipping company NYK to PHP Ship Recycling in Chattogram. The beaching of the ship late last week was an important development coming more than three years after the yard became the first in the country to earn certification and as the industry is under financial pressure.

Watchdog groups have been especially critical of the poor overall track record at the scrapyards in Asia and specifically Bangladesh. They point to poor safety records, lack of protection for the workers, and the pollution coming from the yards.

PHP Ship Recycling set out to change this by adhering to the Hong Kong Convention (HKC) adopted by the IMO in 2009. The yard earned a statement of compliance from ClassNK in January 2020 making it the first recognized as a sustainable green ship recycling in Bangladesh. Since then, PHP also became the first ship recycler in the world to earn an ISO certificate for energy management.

“This achievement is no small feat. It is the culmination of 12 years of intensive hard work, building the facility’s concrete floors and concrete slipway, procuring the best equipment, and aggressively training of staff,” said Mohammed Zahirul Islam, Managing Director at PHP. “All of this required an investment of $11 million so far.”

The yard has nearly 500,000 square feet at the edge of the Bay of Bengal. They report an annual recycling capacity of 160,000 MT LDT.

NYK highlights that it also sent an inspection team to the yard to certify it before agreeing to sell any ships for recycling. They said they use stricter standards than the Hong Kong Convention focusing on the environment, safety, occupational health, and respect for human rights. PHP became the first yard NYK certified in Bangladesh in addition to 30 in India, three in China, and one in Turkey.

NYK sold the Kamo (9,433 dwt) a general cargo ship to PHP for recycling. The vessel which was built in 1998 arrived at the yard in Chattogram after a two-week trip from Ras Laffan, Qatar. She was beached on March 9, but according to both the yard and NYK, a representative will remain at the yard to oversee the recycling process to ensure it is conducted following the standards.

This is especially significant for the industry in Bangladesh as the country’s shipbreaking yards have been under pressure. Reports say that as many as 80 percent of the yards have closed in the past three years. In addition to environmental issues, they have been pressured by low prices and financial challenges due to the country’s weak economy.

Based on the potential from gaining green certification, a second yard followed PHP’s model and announced just last week that it had been recognized by ClassNK as being in compliance with the Hong Kong convention. Working with GMS, the largest cash buyer for ships, and GMS’s Sustainable Ship & Offshore Recycling Program, the yard at Shitalpur, Sitakunda was able to complete the necessary staff training. Under the program, employees from S.N. Corporation were offered technical support and guidance throughout the certification process to ensure a supported end-to-end solution for sustainable ship recycling. The yard also added the required concrete slipway and facilities to prevent the spread of contaminants during the recycling process.

The companies are highlighting these achievements as they work to become more competitive in recycling as it is anticipated more ships will be retired in the face of the new environmental standards.