Meghna Group launches two oceangoing vessels

The Meghna Group of Industries, one of the country’s leading businesses houses, yesterday launched two oceangoing dry bulk carriers in a bid to strengthen its capacity to carry both local and international cargo. 

MV Meghna Princess and MV Meghna Adventure have a carrying capacity of 62,500 tonnes each.

With these two, the Meghna now owns eight oceangoing vessels.

The Meghna Group of Industries, one of the biggest commodity importers and processors in Bangladesh, operates 145 vessels, including 110 vessels of its own to carry cargo.

“We want to carry import cargoes of Bangladesh and also of other countries,” said Chairman and Managing Director Mostafa Kamal after launching the vessels at the Chattogram sea port.

State Minister for Shipping Khalid Mahmud Chowdhury inaugurated the occasion.

The two ships, built in Japan by Oshima Ship Building Co in 2018 and 2019, were sold to the Meghna Group of Industries for a total of $48 million.

“We have already placed orders to buy four more new ships,” Kamal said, adding that the contract was of $104 million.

Excluding the contract for the four other vessels, the group’s investment in shipping stands around $150 million.

The purchase is yet another enhancement of Bangladesh’s capacity to carry cargoes over the sea. Bangladesh had 85 oceangoing ships several years ago.

The number declined to 35 as owners sold off most owing to declining freight rates, high operating costs and removal of a value added tax (VAT) exemption benefit for import and manufacture of ships from fiscal 2014-15.

Private investors showed renewed interest to buy ships after the National Board of Revenue exempted VAT on the import of 15-year-old ships of 5,000 deadweight tonnage (DWT) capacity in March 2018.

The revenue authority also increased the age limit to 22 years in June the same year in an effort to accelerate the shipping industry’s growth.

Since then, the number of locally owned ships started increasing as the volume of imports and exports for the growing economy has been on the rise.

Today, the country has 63 ships.

Cargo imports have been rising in Bangladesh to meet the growing demand of the expanding economy.

Some 7.09 crore tonnes of cargo was imported in 2020, up 3.5 per cent from 6.85 crore tonnes the previous year, showed data from Chattogram Port Authority.

Kamal said the number of vessels in Bangladesh was insignificant compared to that in countries such as the Philippines and Indonesia. The Philippines has 550 vessels while Indonesia 11,600.

There are regulatory problems while support for the expansion of the oceangoing shipping sector is not adequate, he said, adding that Bangladesh’s flag carriers have to pay a 3 per cent advance income tax on freight charge.

For importing ships, local investors also have to pay 2 per cent advance income tax. So, support from the government would be helpful for the sector’s growth, he said.

Oceangoing ship owners earlier said Bangladesh spends $7-8 billion as freight charges to carry goods for its imports and the country has the opportunity to retain a portion of freight.

The Meghna said 21 naval personnel from Bangladesh would work in each of these bulk carriers, creating job opportunities for the country’s people.

Moreover, in comparison to chartered vessels, the benefit of lower freight is available in these self-owned ships, which will bring a positive effect in the competitive price of goods, the group said.