Any industry basically aims at value addition.
Generally the value addition is done through a 'building' process. However, ship breaking is a typical activity, which adds value through a 'demolition' process. At the same those ships that happen to meet with accidents and for whom the subsequent repairs prove to be uneconomic, are also send for demolition. The contribution of the ship breaking yards is to generate value out of unusable ships by segregating it into various components that have their own economic value by subjecting it to a systematic demolishing process. Obviously, the net value addition out of ship breaking will depend upon the cost of doing it.