The number of ageing ships that make a final port of call at the country’s biggest shipbreaking yard in Alang, on the Gujarat coast, has hit an 18-year low. Over 80 per cent of the plots — individual lots where ships are broken and recycled — are currently idling.
“Eighty per cent of Alang is dead,” declares Mukesh Patel, chairman of Shree Ram Group, one of the largest shipbreakers in Alang, which had bought and dismantled India’s ageing aircraft carrier ‘Viraat’ in 2020. “I have six plots and only two have ships for recycling. Within a month, even these two plots will run out of business. My business is down by 70 per cent,” he says.
He and other shipbreakers in Alang (Bhavnagar district) are wracked with worry over the steady decline in business. In the last financial year, only 125 ships, cumulatively weighing 9.4 lakh LDT (light displacement tonnage), sailed into Alang’s yard, which is equipped to recycle over 400 ships a year. The only other time the arrivals plunged this low was during 2006-07 and 2007-08, when the global financial crisis hit, as merely 136 ships (weighing 6.4 lakh LDT) beached in Alang in each of those years.
There have been no signs of recovery so far this year. Until August, Alang handled ships cumulatively weighing 2.99 lakh LDT, which is 16 per cent lower than the 3.5 lakh LDT handled in 2023-24. Of the yard’s 153 shipbreaking plots, only 20 currently have work. According to industry insiders, the number of workers, mostly migrants, has plummeted to 3,500 from 40,000-60,000.
Call for policy change
Patel blames Gujarat Maritime Board’s (GMB) “flawed policy” for the decline in Alang’s business. “They have imposed limitations on plot sizes. The political leaders are just interested in giving speeches and portraying Alang as a green shipyard. But what about attracting business? Nobody is focusing on that,” he says. Bigger plots and policy changes can help attract defence ships from the US and Europe, he says.
The shipbreaking business in Alang dates back to 1983, when five ships with cumulative 24,000 LDT arrived to be broken. Business peaked in 2011-12, with the arrival of a record 415 ships of 38.5 LDT, before hitting a slow patch till date.
Even the efforts by shipbreakers to adopt green practices and upgrade facilities failed to attract more business. During the 2024 Vibrant Gujarat summit, Alang was promised over ₹1,600 crore worth of investments, mostly by shipbreaking companies. But these mostly remain on paper so far.
‘Temporary blip’
GMB, the State government nodal agency managing the operations of Alang shipbreaking yard, remains optimistic about future prospects. “The current situation at Alang is due to the overall global sluggishness. Since the Covid pandemic, arrival of ships has been on a decline as ship owners prefer to rehabilitate old ships and extend their usage. However, in the coming 3-4 years, we are expecting ship arrivals to increase drastically at Alang,” says Rajkumar Beniwal, Vice-Chairman and CEO of GMB. The board is looking to tie up with the European Union (EU) to attract ships to Alang.
“We are in the process of registering ourselves with the EU, which currently does not send ships to Alang. Now they have agreed to come for a survey,” Beniwal says. He adds that the board is also undertaking initiatives such as doubling the size of the Alang yard. “We will be increasing the size of plots as per international standards. We are also cooperating with plot owners to train their workforce,” he says. The infrastructure at Alang is being spruced up, including upgradation of waste treatment facilities, health facilities and accommodation for workers, the official says.
The proposed plan is to double Alang’s ship-recycling capacity to 9 million LDT from 4.5 million LDT, and create 50 additional plots.
Steel business
Dubai-based Global Marketing Systems (GMS) Inc — the world’s largest buyer of ships and offshore assets for recycling — believes that the decline in demand for local steel in India has adversely impacted Alang’s ship-recycling industry. “The ship recycling business is dependent on the demand for the scrap steel from recycled ships. However, with the increased availability of imported scrap and cheaper steel alternatives, the demand for ship-recycled steel has diminished considerably,” says Nayeem Noor, Business Development Head, GMS.
“The current situation in India’s steel and ship-recycling industries is unprecedented. Historically, when the supply of ships for recycling declined, the demand for steel often remained robust, balancing the market. However, this is the first time that both supply of ships and demand for steel have declined simultaneously. The confluence of these factors has created a perfect storm, severely impacting the ship recycling industry in Alang and other hubs.”