Tradewinds – Aliaga scrappers set to reach one-million-ldt mark

(Written by Jonathan Boonzaier)

8 March 2013 - The hub of Turkey’s shipbreaking industry has been growing at unprecedented levels since the collapse of the shipping markets in 2008

Turkish shipbreakers look set to demolish the record of one million light displacement tons (ldt) this year as dire markets continue to send an endless parade of vessels to their doom.

Turkish Ship Recyclers Association (TSA) president Adem Simsek tells Tradewinds that ship-recycling in Aliaga, the focus of the country’s shipbreaking industry, has been growing at unprecedented levels since the collapse of the shipping markets in 2008.

In that year a mere 150,000 ldt-wroth of ships were dismantled in Aliaga but since then the number has been steadily climbing.

“Last year (2012) was already a record year for us, when we handled 925,000 ldt. This year, I expect that we will top the one-million-ldt mark,” he said on the sidelines of the Tradewinds Ship Recycling Forum held in Dubai this week.

Shipowner green focus

Aliaga, which has 21 active breaking yards or, as the TSA prefers to refer to them, ship-recycling facilities, has always played second-fiddle to scrapyards in Asia. It has survived mostly on smaller and midsize vessels. But Simsek claims that the recent focus by yards on building up their green credentials has resulted in larger ships coming their way.

“We can’t compete on price with yards in India, Pakistan and Bangladesh. Our wage costs in Turkey are far higher. The 2,500 people working in the yards in Aliaga are professionally trained and certified, and the salaries they earn can range between $1,000 to $2,000 per month depending on overtime. This means that we can only offer prices that are about 40% less than what India offers,” he explained.

But, says Simsek, while there are shipowners who are only interested in getting the maximum price, more and more are looking at environmental practices. “Last year I bought the cruiseship Costa Allegra from Costa Crociere. The company had higher offers from India but they were more concerned about the way in which the dismantling work would be undertaken,” he said.

Simsek also notes that this environmental awareness is also filtering down to owners of larger commercial tonnage. This week, for example, he purchased the 28,600-dwt products tanker Selin K (built 1986) for around $310 per ldt. The Turkish owners of the vessel could easily have secured $410 oer ldt if they had sold it to India. “The ships arriving in Aliaga are definitely getting larger,” Simsek said.

Turkish shipbreakers have one of the better environmental records in the industry. The sector is highly regulated by the government and the yards must follow stringent guidelines set by the TSA, which demands that all Basel and International Maritime Organisation (IMO) rules and regulations be adhered to.

Three of TSA’s members are also members of the International Ship Recycling Association (ISRA), which was set up in The Hague in 2007 to promote environmentally sound ship-recycling practices. Simsek, who is the current president of ISRA, says another three are expected to join later this year. “It is a step-by-step process. We don’t want to add yards until they are ready,” he said.

Simsek hopes that the new European Union (EU) regulations that aim to make it mandatory for EU-flag ships to only use environmentally sound recycling yards will push more ships to Aliaga, as well as to other ISRA-member yards.