COLOMBO (EconomyNext) – Sri Lanka’s Colombo Dockyard is overstaffed with high labour costs and insufficient productivity and faces threats from emerging shipyards in the region, its new chairman has said.
The yard, a unit of Onomichi Dockyard Co. Ltd. of Japan, has a long history that has resulted in the build-up of specialised expertise for ship repairing, establishing it as a reputed shipyard in the Asian region.
This enables it to enjoy a high rate of repeat clients, Colombo Dockyard Chairman Toru Takehara said.
But one weakness was the "comparatively higher labour costs and lower productivity due to overstaffing and narrow job specialisation," he told shareholders in the firm’s annual report.
"Currently, the company is over staffed compared to other Asian shipyards," Takehara said.
"Our competitors in China, Malaysia, Singapore, Myanmar and Vietnam operate under the multi-skilling model. In Sri Lanka, the heavy reliance on traditional job specialisation, is reducing our international competitiveness."
Takehara said employees in Sri Lanka also face difficulty in commuting to and from work, due to poor public transport systems, which again contributes to lower productivity.
Colombo Dockyard is facing rising competition from the emerging markets of Bangladesh, Myanmar and Vietnam, Takehara said.
"These countries already enjoy investments in shipyards and heavy industries, from Japan and other advanced nations. This will soon improve their technology and quality standards."
The combination of higher productivity with improved quality standards in these emerging shipyards will soon pose a "serious threat" to Colombo Dockyard by being able to match its quality at lower prices, Takehara warned.