A VLOC that Germany’s Neu Seeschiffahrt had been seeking to sell in the demolition markets in August has ended up at the yard of Bangladesh’s first certified green recycler.
Chattogram-based PHP Ship Breaking & Recycling Industries has confirmed that the 258,000-dwt Janice N (built 1995) was beached at its yard in late October and is in the process of being cut up.
It will be the third VLOC to be dismantled by the yard this year.
Neu sold the Janice M to a Singapore-based cash buyer of ships for demolition in early October for $337 per ldt, which equated to $9.5m.
PHP managing director Mohammed Zahirul Islam said his yard bought the ship off the cash buyer for $350 per ldt.
“Of course we have to pay them more than what they paid for it,” he said.
It will take PHP approximately six months to recycle a ship as large as the Janice N.
In August, the vessel was widely reported by brokers to have been sold for recycling in Pakistan for $370 per ldt.
Scrap industry sources said that Neu had originally tied up a deal with an Indian cash buyer. But the company cancelled the sale after discovering that the ship would be going to a Pakistani yard that was not certified under the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships.
PHP became the first ship recycling facility in Bangladesh to be certified under the Hong Kong Convention when Italian classification society Rina gave it an endorsement in 2017. Japan’s ClassNK followed in 2020.
Hungry for VLOCs
The Janice N is the third VLOC to have been bought by the yard in 2020.
In March, it purchased Cido Shipping’s 278,000-dwt Pacific Opal (built 1995). The vessel, like the Janice N, was a VLOC that had been converted from a VLCC.
Cido reportedly received $394 per ldt for the 37,399-ldt vessel, which equated to $14.7m in total.
Islam said the sale did not specify green recycling, but the yard did the work according to Hong Kong Convention requirements.
“We have to do it that way to maintain our compliance certification,” he said. “We get audited annually by the class societies.”
Islam added that PHP bought the ship for a higher, non-green recycling price as the yard was empty and there were few green recycling candidates available in the market.
However, he claimed owners looking for green recycling began taking a more serious view of his yard as a candidate to dismantle ships under recognised international environmental standards after it got the backing of ClassNK in January.
One such owner was Eastern Pacific Shipping, which sent its 266,000-dwt ore carrier Handan Steel (built 1994) there in June for dismantling at a reduced green recycling price.
The Singapore-based shipowner is well known for conducting stringent checks on recycling facilities before concluding any deals, which Islam said gave his yard’s reputation a further boost.
PHP spent about $6m upgrading its facilities to meet the Hong Kong Convention. The beaching facility has been covered by an extensive concrete flooring while cranes are used to dismantle ships and protect the intertidal zone from pollution.
