Alang Shipyard Gears Up for Expansion Despite Declining Business
India’s largest ship-breaking yard in Alang, Gujarat, is undergoing a significant expansion plan after nearly four decades of operation. This initiative aims to revitalize the industry and increase its capacity.
Key Points of the Expansion Plan:
- Doubling Capacity: The Gujarat Maritime Board (GMB) plans to add 50 new plots to the existing 153, effectively doubling Alang’s ship recycling capacity from 4.5 million Light Displacement Tonnage (LDT) to 9 million LDT.
- Two-Phase Approach:Â The expansion will occur in two phases. The first phase will focus on regulatory changes to attract more ships and utilize existing vacant plots. The second phase will involve creating new plots based on a master plan for the Alang region.
- Land Acquisition:Â The expansion will require acquiring land in the nearby Mathavada village to accommodate the additional 50 plots.
Current State of Alang:
- Limited Utilization:Â Currently, only 131 of the existing 153 plots are operational, leaving many vacant.
- Declining Activity:Â Despite the expansion plans, workers have observed a significant decline in business since 2011-12. The number of ships processed annually has dropped from 415 to 137, and the total LDT handled has decreased from 3.8 million to an unknown figure in the same period.
Challenges and Competition:
- Increased Competition:Â Ship-breaking yards in Bangladesh and Pakistan have emerged as strong competitors, impacting Alang’s market share.
- Higher Charges:Â Members of the Ship Recycling Industries Association (SRIA) believe the higher charges imposed by GMB have also contributed to the decline in business.
Other Developments in the Maritime Sector:
- Dahej Port:Â Adani Ports is planning a significant expansion of its logistics capacity at Dahej Port.
- Cochin Shipyard:Â Cochin Shipyard Ltd aims to establish a repair cluster on the western coast.
- Pipavav Shipyard:Â Once the largest shipbuilder in India, Pipavav Shipyard in Gujarat is currently inactive due to bankruptcy.
Overall, the expansion plan represents an effort to revitalize Alang’s ship-breaking industry. However, addressing the challenges of competition and high charges remains crucial for the long-term success of this initiative.
After about forty years since the Alang ship-breaking yard was established on the coast of the Gulf of Khambhat in Gujarat, the state government is working on a plan to enhance the capabilities of India’s largest ship-recycling yard to handle more work.
According to an official from the Gujarat Maritime Board (GMB), currently, there are 153 areas at Alang where old ships are brought to be dismantled. With the new master plan, an additional 50 areas will be added to increase the capacity. This expansion can potentially double Alang’s ship recycling capacity from 4.5 million light displacement tonnage (LDT) to 9 million LDT.
Alang currently processes 400-450 ships annually, yielding around 3.5 million tons of steel from about 200 ships. The expansion will occur in two phases. Initially, changes in regulations will be made to attract more ships to Alang and to utilize the vacant areas. Subsequently, new ship-breaking areas will be added based on the master plan for the Alang region.
The existing 153 areas at Alang stretch across a 10-kilometer beachfront, nearly reaching Sosiya village. While 131 areas are operational, the rest remain vacant. The government intends to acquire more land in the nearby Mathavada village to create 50 additional areas for shipbreaking.
Regarding other developments in the maritime sector, Adani Ports plans to significantly increase its logistics capacity at Dahej Port, while Cochin Shipyard Ltd aims to establish a repair cluster on the western coast. Gujarat’s Pipavav Shipyard, once the largest shipbuilder in India, is currently inactive due to bankruptcy.
Despite these expansion plans, workers note a decline in business at Alang since 2011-12. Ship-breaking activity reduced from 415 ships with 3.8 million LDT in 2011-12 to 137 ships in 2022-23. Increased competition from ship-breaking yards in Bangladesh and Pakistan, along with higher charges imposed by GMB, have adversely affected Alang’s ship-breaking industry, according to members of the Ship Recycling Industries Association (SRIA).
