WESTERN
Marine
Shipyards REDEFINING EXPECTATION AND SETTING NEW STANDARDS
Right after the turn of the new millennium in Bangladesh, four marine professionals and two businessmen were sitting down, having a discussion in Chittagong, Bangladesh. They’d spotted a gap in the shipbuilding sector that looked like it was ready to fill. With so much ship construction then completed overseas, occasionally with less than desirable quality and customer service, the group felt it was time to create something local; a company that took as good care of its customers as it did its construction work. Western Marine Shipyards (WMS) was born. For the next seven years, the company operated from a one hectare plot in Chittagong, home to Bangladesh’s largest marine port. Setting up a shipyard with what it takes to become internationally recognised is no joke, and the next seven years were tough. But by the time 2007 came around, and in spite of a recession looming heavily in the air, the company moved onto 16 hectare site. By this time, the 200 strong starting staff had grown to around 700. In spite of the tough times, by the end of last year, the company employed 3,500 local staff. Not only this is make a significant contribution to the local economy, but affords workers the opportunity to fly overseas and learn the latest ship construction techniques before apply them to vessels reaching up to 100 tonnes.
In
a country where government safety legislation is arguably less stringent than many Western countries, injuries were a problem. But the issue wasn’t lost on the founders. As managing director, Sakhawat Hossain, pointed out, “a 10% with investment on safety could produce over 200% return”. Shortly after, a partnership between Western Marine and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) saw strict measures implemented that reduced injuries by a massive 99%. By 2009, WMS had become the international standard. And, as we’ll discuss more later, the knock-on effects for this in a country like Bangladesh are extensive.
TODAY, BUSINESS IS BOOMING.
Of the 300-odd small to medium shipbuilding companies in Bangladesh, WMS is the largest and one of only 2 to export globally. So far, it’s received this 142 orders, 86 of which are delivered, with 13 more in the works and another 27 in the order book.
It’s no secret that the world’s macroeconomic structure has been shaken up in the past few years, and with the Eurozone crisis leaving a lot of its overseas clients struggling to secure financing from cautious banks, Western Marine Shipyards looked to its home turf for growth. There were several strategies they could take advantage of such as the Bangladesh government looking to reduce road congestion by using the waterways… ...Friendly local government legislation also offered tax breaks for shipbuilders, allowing them to import equipment and materials without paying duty. The ship building industry supply chain is largely a project based one with supply chain relationship being as per required by projects however Western Marine Shipyards has been able to build local partnership in Bangladesh where it sources in the region of about 50% of required materials and equipment. This is not only a reflection of how established the Bangladeshi Ship Building industry is and WMS’s understanding of the importance of local engagement in building a sustainable business but also the importance of a Bangladeshi identity in every ship that come out of Western Marine’s Shipyard.
Engagement with international supply partners continues to play a significant part in WMS’ operations. When TSBR spoke to some of these long standing supply partners including ZF Marine Middle East LLC, Breman Shipping Installation, MTU Asia Pte Ltd just to mention a few, we noticed something unique about this partnerships. There seemed to be a personal and professional touch to these relationships, you could tell it was beyond transactional, a synergy of companies that come together with the sole aim of quality & client satisfaction.
As the global economy improved, the company set its sights on the booming liquefied natural gas (LNG) market and securing market share from other countries including Africa and the Middle East.
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Now, 50% of its total orders come from overseas and it made a major contribution Bangladesh increasing its ship exports four times over in the 2010 fiscal year. Now, the Bangladesh economy is widely believed to hold the second largest potential in Asia after India. But what about Western Marines outlook towards CSR? Well, the company has an impressive track record of making contributions back to society including an computers to schools… And even subsidised staff meals and providing medical attention for both employees and the local community. WMS set up a clinic where the health Ministry pays for a nurse and ship your employs a part-time doctor who also attends the local community in addition to its staff. Let’s look again at the safety issue. reducing injuries by 99% in a potentially lethal construction environment is a serious demonstration to CSR. But in a country where an individual workers often provide for a large extended families, an injury that results in several weeks or months of downtime has a devastating impact country’s development. It means not only quality of living for small communities, but in many cases also school fees hindering future development. Furthermore, with injuries being so few and far between, the medical staff at the local clinic can attend more general health care staff and locals even healthier, more productive population. Good safety regulations is something that is taken for granted in many countries, but in a country like Bangladesh, it’s not just about avoiding someone having broken arm but rather has serious knock-on effects and implications for local development. With Bangladesh coming under intense international pressure to overhaul labour laws and working conditions, WMS has set a very high bar to which other companies must now aspire.
WESTERN MARINE SHIPYARD Amin Future Park (7th floor) 1440/A Strand Road Chittagong-4100 Bangladesh. http://www.wms.com.bd/
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