CMA CGM and MSC Beat a Path to India Following in Maersk’s Footsteps
India’s efforts to become a world class shipbuilder are taking additional steps forward with media reports that executives from both MSC Mediterranean Shipping Company and CMA CGM Group are holding talks with the industry. It follows the news yesterday, February 17, that Maersk has entered into an agreement with Cochin Shipyard first for repairs of smaller vessels of the fleet and targeting shipbuilding.
Indian Prime Minister Narendra Modi last month spoke of the value of the planned investments into the sector and expected boosts to the economy. He has called for a mega cluster to focus on shipbuilding to take the country to a top 10 shipbuilding by the end of the decade and a top 5 by 2047. Modi said the business could be worth $62 billion by 2047.
The new budget for the country includes a Maritime Development Fund to provide financial assistance and level the costs for India’s shipbuilders to make the industry more competitive. They also provided a concept to leverage India’s well-established ship recycling operations primarily at Alang to attract newbuild business. The budget calls for a credit for shipowners that recycle vessels in India that would be applied to the cost of newbuilds at the Indian shipyards. A 10-year extension till 2025 was also provided on the duty charged on raw materials, components, and parts used in the manufacture of ships.
Modi and Macron received a presentation from Saadé at CMA CGM's Fleet Center (PM Modi)
During his visit to Europe, Modi met with French President Emmanuel Macron at the CMA CGM Group headquarters in Marseille. He also discussed issues with group Chairman and CEO Rodolphe Saadé. CMA CGM highlighted its 34 years of operations in India and Saadé made a presentation and provided a tour of the group’s fleet center.
India media is reporting that Saadé told Modi that CMA CGM was committed to sending a “study team” to look at the shipbuilding capabilities and repair opportunities. They also reportedly agreed to explore registering some ships in India.
The Indian media outlet ET Infra is reporting Christine Cabau Woehrel, Executive Vice-President for Assets and Operations, CMA CGM Group, will visit India this week to explore potential opportunities for shipbuilding and repairs in the country. It is also quoting sources that CMA CGM will sign a similar memorandum of understanding to the one Maersk announced yesterday. CMA CGM and Cochin will according to the report announce plans for ship repairs and newbuilding following Maersk’s lead.
Toft meeting with India's Minister of Commerce and Industry (Piyush Goyal on X)
India’s Minister of Commerce and Industry, Piyush Goyal, posted messages on X this week showing a meeting with Soren Toft, Chief Executive of MSC Mediterranean Shipping Company. He wrote that they had a productive meeting discussing the vast growth potential in India’s shipping and logistics sector, focusing on investments in inland container terminals, shipbuilding, maintenance, and container manufacturing. He said the talks centered around “deep-sea vessel partnerships and policy reforms to enhance the nation’s global maritime competitiveness while fostering growth, innovation and self-reliance in the sector.”
The state-owned Cochin Shipyard is seen as the first beneficiary of the new interest because it is the only yard with a 300-meter dry dock according to ET Infra. However, it notes that Swan Defense and Heavy Industries is also expected to meet with CMA CGM. Another yard, L&T Shipbuilding (Larsen & Toubro) also broke into the international market in the past few years, first winning maintenance contracts for U.S. Navy support ships and recently from the UK Royal Fleet Auxiliary.
Indian shipbuilders have built smaller, specialized ships for Europeans. Maersk is set to start the next level with its agreement which calls for wet dock repairs for ships up to 7,000 TEU and dry dock for ships up to 4,000 TEU. Maersk said plans were underway for the first project to start in 2025.
Maersk Plans Repairs at India’s Cochin Shipyard Supporting Government Goals
Maersk and India’s Cochin Shipyard have entered into a memorandum of understanding to explore ship repair, maintenance, and shipbuilding in India. The Danish company becomes the first major carrier to plan regular maintenance activities in India which will be in support of the government’s goals to develop shipbuilding into one of India’s leading industries.
“The first Maersk vessel repair at Cochin, planned already for 2025, will mark the beginning of what we envisage as a long-term collaborative relationship,” said Leonardo Sonzio, Head of Fleet Management & Technology for A.P. Moller – Maersk. The collaboration the companies reported will initially focus on vessels up to 7,000 TEU for afloat repairs and up to 4,000 TEU for dry-docking, with capabilities expected to expand over time.
Cochin Shipyard, which was incorporated in 1972 as a fully owned Government of India company, is India’s largest shipbuilder both for the navy and private projects. Last year, the company invested more than $100 million to open a new ship repair facility encompassing more than 42 acres in Cochin Port. Media reports indicate that the company is currently repairing four to five ships at a time in the yard while it also has orders for 65 newbuilds.
Located on the southwest coast of India, the yard is close to major shipping lanes and can offer advantages in technology and low-cost labor. The agreement with Maersk will explore ship repair, dry docking, and new building opportunities as well as sharing technical expertise. The companies plan to work together on joint training programs and skill development.
India is reported to have 32 shipyards but a report cited inadequate policy support, limited private investment, and inefficiencies in the operations which are holding back the growth of the industry. The government however in 2024 outlined an aggressive plan to expand the shipbuilding industry.
The Ministry of Ports, Shipping and Waterways (MoPSW) is developing a new shipbuilding support program that will incentivize Indian shipyards to grow. Detailing the plan the ministry said the aim is to propel India into the top ranks of global shipbuilding nations, targeting a position among the top 10 by 2030 and the top five by 2047, from its current 22nd place. The government projected that the business could be worth $62 billion by 2047. It would also drive growth in related industries which would add $37 billion to the economy and create around 12 million jobs.
Media reports in India and South Korea noted recent activities designed to support the shipbuilding industry. The Indian government organized and led a delegation to meet with Korea’s shipbuilders. In a reciprocal visit, Hanwha Ocean is reported to have toured the shipbuilders including Swan Engineering, Cochin Shipyard, Hindustan Shipyard, and L&T Shipyard. Media reports in South Korea indicate that Hanwha Ocean is exploring an agreement with India’s shipbuilders.
Korean shipbuilders are currently handicapped by a lack of capacity with all the building slots booked years in advance. The industry is also focused on rising costs and competition from Chinese shipyards.
The U.S. Navy and the UK’s Royal Navy have also sought to build relationships with the Indian shipbuilders as part of a complex series of political moves to strengthen ties with India. The U.S. Navy sent an MSC vessel for the first time in 2022 for an overhaul at an Indian shipyard and now three of India’s yards are approved to bid for projects. The Royal Navy also started in 2024 sending auxiliary ships to Indian shipyards.
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