BS reported that recession has proved a boon for the ship recycling industry at Alang in Gujarat, which is seeing one of its busiest days with companies docking vessels for disposal to avoid a downturn in freight rates. The world’s largest graveyard of ships in terms of capacity, Alang completed recycling 5,000 vessels a few weeks back since its beginning in 1982.

Ship Recycling Industries Association of India said that "Around 281 ships of 2,392,558 LDT have been recycled this financial year. Another 125 ships are being broken for recycling at different yards."

This is up from 264 ships of 1,943,771 LDT recycled in the last financial year and 136 vessels of 643,437 LDT recycled the year before. Alang had its highest ever business 11 years ago in 1998-99 with 361 ships of 3,037,882 LDT recycled. Since then, business kept dropping till 2007-08.

Mr Vishnu Kumar Gupta president of Ship Recycling Industries Association of India said that "Business suffered as Bangladesh and Pakistan gave better returns due to their lower tax regime and higher demand for scrap in those countries. We can do well if the government abolishes the effective 5% custom duty levied on ships which we buy for recycling."

An industry source said that "With rising steel prices, lower cost of vessels and the deadline on use of single hull tankers are prompting companies to sell old and inefficient ships globally. In India, Shipping Corporation of India, GE Shipping and Mercator Lines plan to scrap 14 vessels this year."

The International Maritime Organisation has issued guidelines, which prevent single hull tankers more than 25 years old to be used after December 2010. All such tankers are banned from international waters from 2015-end.

(Sourced from www.business-standard.com)