History

Ship Recycling is not new to India for we know of this activity ever since 1912 in Kolkata and Mumbai. The ship recycling activity in those days was a part of the larger colonial economy like plantations and mining. Steel scrap was worthwhile even then and countries that had yards to recycle ships were often considered to be economically fortunate. Indeed, ship recycling became very important at the end of the two World Wars, especially after the World War II. Further, after the oil boom in the Middle East, oil became a much transported commodity and large oil tankers added to the fleet. Refrigeration techniques that grew around the early 1950’s, too led to the emergence of the large refrigeration vessels. All of these started to age by the middle of 1970’s and the ship recycling activity reached new heights in the Western countries. When the first economic recession came around 1984 and the fleet owners thought that it was better to scrap ships than to maintain them, there was a huge backlog of ships to be demolished. With the recession on, labour appeared to be far too costly and steel scrap yielding far less prices, ships had to look for cheaper labour elsewhere. India, stepped in at this juncture.

India did not take the activities directly from the West. The first round of relocation of this industry took place in Taiwan and Korea – the countries that were fast industrializing, had a high demand path for steel and labour was cheaper. With economic growth in these countries having stabilized and wages and standards of living rising, the ship recycling activity passed on to the next level of developing countries of the Indian subcontinent, China and Vietnam, the laggard among the south east Asian Tigers. When ship recycling came to India it was a part of the industrial relocation that started around the middle of the 1980’s when the low-skilled and low-wage jobs shifted to the Third World countries. Indeed, the coming of the ship recycling activity to India was a part of globalization, as we know it today.

One of the reasons why the ship recycling activity became a boon for India was that, the middle of 1980’s was a time of the rise of electric arc furnace and a rise in demand for steel melting scrap. The re-rolling mills were already facing an expansion around the middle of 1970’s and they now grew up very fast in North and West India. The re-rolling mills were driven mainly by the boom in the construction sector in these parts that emerged as a result of rapid urbanization. Ship recycling became a source of steel scrap, whether for melting or directly re-rollable material in the re-rolling mills. In terms of price, ship-breaking scrap historically is more expensive than scrap from railways or other melting scrap, but it is cheaper than ingots from the electric arc furnaces and the billets and the semis from the integrated steel plants. Hence, ship-recycling scrap conventionally has proved to be a direct competitor of the integrated steel mills in their market for semis.

Due to increase in trend of import of ships for breaking in India, an emphasis was laid to examine various sites suitable for this activity. Considering the favorable parameters for beaching method like high tidal range, firm seabed, gentle seaward slope etc., it was decided to set-up a ship breaking yard on the western coast of Gulf of Cambay near Alang village.

Hence ship recycling in its new avatar in India found a perfect host in Gujarat’s Alang. The first vessel – MV KOTA TENJONG was beached at Alang on 13th Feb, 1983. Since then, the yard has witnessed spectacular growth and has emerged as a leading ship Breaking Yard in the world.

Geography

• Alang has a very high inter-tidal gradient. This enables the ship to beach right at the shore during high tide and when the tide recedes the ship stands almost at a dry-dock. This not only makes work easy but also makes easy in terms of collecting the valuables and the waste items from the sand. Usually heavy items are dropped into the sea-water during high tide and this minimizes damage.
• Due to high tidal gradient, larger ships can come straight into the shore. This reduces the total working time on each ship.
• Since the beach is sandy, the heavy items do not sink in the mud and similarly the hazardous waste matter such as paint and other heavy metal and other deposits do not leach into the soil.
• The rainfall is mild and work can be carried out throughout the year.
• Since Alang is sheltered from high velocity winds or excessive humid conditions, ship recycling is a perennial activity and safe.
• There is a layer of hard rock just beneath the sand and this prevents rainwater and even seawater from seeping into the subsoil. Thus the danger of subsoil contamination is ruled out.
• Sometimes there is danger of seawater pouring into the rivers when the latter run dry. The rivers that flow into the Gulf of Cambay are Pasvivali and Manar. Both are seasonal but since the land is at a substantial height from the sea, the seawater cannot seep into these rivers during the lean season. The only perennial river Shetrunji too is protected from the intrusion of seawater.
• Due to the relatively moderate rainfall and shelter from strong tides and winds and also because of the absence of rocks around the area, the Alang yard can recycle smaller ships easily. Therefore, the numbers of ships that can come to this yard are many. In contrast, Gaddani in Pakistan and Chittagong in Bangladesh have strong winds and strong tides respectively and hence they can only demolish very large vessels. Chinese seacoast has typhoons all through the monsoon season and hence ship recycling cannot go throughout the year in an uninterrupted manner.
• The local population consists of small farmers who are settled in small hamlets. Had the local population been pastoral who would need large grazing grounds or fisher folk like the kholis in Mumbai port area, Alang would not have obtained the freedom to expand the way in which it has done.

Importance

• Ship-recycling industry serves the shipping industry by helping them to gain financial value of their zero-value vessels.
• Ship-recycling industry reduces maritime burden of handling such incapable vessels.
• Ship-recycling industry produces huge quantum of re-rollable steel without exploiting natural resources. Thus it saves non-replenishable natural resources and energy.
• Ship-recycling industry recovers valuable machineries n equipments which are sold to various industries at cheap rates. Thus encourages the small scale industry by reducing their capital investment in machineries.
• Ship-recycling industry recovers various household accessories and products like kitchen appliances, kitchen machinery, office and home furniture, photos, lamp shades, plastic buckets, toilet sets, bathroom fittings, mirrors of all dimensions, cupboards and sideboards, crockery and cutlery, flower pots and pot holders, used cables, steel pipes, nuts and bolts, screws, electric motors, bulbs and light fittings, wood, partition sheets. These recovered goods are used by local people as well as hotels n restaurants. The products are sold at very cheap price. Thus people with less income can avail better standard of life.
• Ship-recycling industry serves the society by providing employment opportunity to thousands to workers hailing from various states of the country.
• Ship-recycling industry provides raw material to many re-rolling mills located in various parts of the nation.
• Ship-recycling industry provides business opportunity to shipping agents, cash buyers, ship brokers, marine traders and brokers, transporters, gas plants, etc.
• Ship Recycling Industry provides balance to the steel sector of the nation. Western India does not have any source of steel generation except Alang Ship Recycling yard. Thus the industry saves a lot of transportation cost for the steel sector industries.

Infrastructure

• In order to improve transportation and to avoid accidents, approachments at the recycling yards have been dealt with and a four lane service road parallel to the yards has been constructed. Parking provisions for trucks have also been made. Footpaths have been constructed to provide walking space for workers.
• Two major RCC bridges having two-lane width are constructed across the river “Manari” and “Pashvivali”, to facilitate movement along the service road.
• Construction of permanent water supply pipelines for the work place is almost complete. Ferrous scrap committee has sanctioned 50 per cent cost of this project which will be disbursed to GMB on completion of the project.
• Lighting arrangements at the work sites have been improved as a measure to enhancing safety.
• The training Institute at Alang has been conducting awareness training for the workers.
• For emergency treatment, a Red Cross Hospital is operational at Alang. Ship-recyclers have contributed about Rs. 80 lacs for the welfare of the workers. A specialized hospital building with 25 beds is also constructed out of the above fund collected from ship-recyclers. Ferrous Scrap Committee may contribute the entire balance capital expenditure including equipments. GMB or the Health Ministry of Gujarat has been requested to take the responsibility for running the hospital as the patients would not only include the workmen of the ship-recycling industry but also a large number of people from the local population.
• Satisfactory fire-fighting facilities are provided. It is heartening to note that fire incidents are now rare. This is in addition to the fire fighting facilities available at individual plots.
• A landfill site next to the yard has been constructed and is already in working. It is being operated by GEPIL. FSC has contributed Rs. 2.95 crore being 75 per cent of cost of the project. All the hazardous and non-hazardous waste generated by the industry is collected and sent to the TSDF site and is handled efficiently.
• Other Services

• Police Station
• Post Office
• Bank
• Telephone Exchange
• Custom Office
• A movie hall for workers entertainment.

Employment

The ship recycling industry is labour intensive. The survival of the industry depends on the availability of labour. The work at the ship-recycling yard is laborious and so until and unless wages are high, labour is not induced to work

The ship recycling industry employs about 40000 workers each year in alang alone. The labourer employed is mostly illiterate and hail from India’s poorest States like Orissa, Uttar Pradesh and Bihar. The employment potential of this industry must be taken into account while deciding about its future. The wages at the yards vary between Rs 100 to Rs 200 per shift of eight hours. This is at par with industrial wages of workers.

Assuming the best scenario in the homestead of the workers, they would have earned a wage of Rs 35 per day of eight hours. Say they had work for 24 days a month for twelve months a year. This would give them a wage of Rs 10080 anually. [ Rs 35 x 24 days x 12 months = 10080 annually ]

Let us compare the worst scenario of the labourer at the ship recycling yard. He gets Rs 100 for eight hours at least. He works only ten months in a year, the months he can go back home. Each month he works for 24 days. His annual income would be Rs 24000 a year. [ Rs 100 x 24 days x 10 months = Rs 24000 annually ]

The difference in income per worker would be Rs 24000 – Rs 10080 = Rs 13920.

For 40000 workers this would be Rs 55.68 crores. Ship recycling creates a net wage income of Rs 56 crores annually.

“Apart from this, the ship recycling industry provides indirect employment to other half a million people employed in down stream industries”

Role in Steel Economy

Steel scrap from the demolished ships is a major source of raw material for the re-rolling mills in our country. Normally at least 70 % of the total light displacement tonnage of a ship broken constitutes of re-rollable scrap. These are converted into bars and rods that are used in the construction sector. The other raw materials to produce bars and rods are re-rollable scrap from railways, pencil ingots from induction furnaces, semis from the integrated plants and imported re-rollable scrap

Scrap from ship breaking fetches a very good price in the market. If prices express consumer preference, then there is a strong preference for the ship-recycling scrap. This is because of the high quality of steel that comes in the form of re-rollable scrap from ships. Ships are manufactured with acute specifications. The manufacture of ships is done usually in the developed countries and the specifications are monitored closely in order to avoid accidents. The general features of steels that are used to manufacture ships are ability to withstand pressure, high impact and strain on account of severe cold. These features if translated into manufacture of bars and rods may give us similar qualities of steel with equal strength.

The material processed from ship breaking scrap is better in terms of yield strength, notch impact strength and through thickness ductility. In terms of chemical composition it is consistent and has low sulphur and phosphorus content. In terms of metallurgical properties, steel from ships are normalized, fully killed and has finer and more compact grain structure, free from inclusions, pores and cracks and austenitic properties. Hence for all kinds of applications those require impact resistance, corrosion resistance, machinability, bendability, and formability, steel from ship breaking scrap has been found to be more suitable than steel from ingots and billets. Incidentally, everywhere else in the world the scrap from the demolished ships are usually sent into melting furnaces, India is probably only country that has the technique of re-rolling scrap into producing construction steel without having to first cast scrap as billets and ingots.

In order to produce a tonne of steel through the integrated steel plants one tends to consume more power and fuel and non-replenishable resources like coal, iron ore and limestone and other minerals. The sunk costs in terms of capital employed are higher in the integrated steel plants and the integrated plants create far less employment. Indeed, we can obtain our required input material from the ship recycling industry at a fraction of the costs of the integrated plants.

Steel Produced via Ship breaking route vis-à-vis other route

Capital investment required for producing 2 million tones of steel through ship-recycling route will not be more than Rs. 300 crore as compared to over Rs. 6000 crore required via alternative route. Solid waste generation in ship recycling is negligible as compared to major steel plants. During its peak on 1999-2000, it was producing more than 2 million tones of re-rolling steel per annum. The following resources are required for production of 2MT of steel through steel plants based on BF technology in India

Statistics