Cochin Shipyard Secures $360 Million CMA CGM Contract
MUMBAI: Cochin Shipyard Ltd has made headlines by securing India’s first container vessel order valued at $360 million from the global shipping giant CMA CGM S A. The state-run shipyard aims to deliver six LNG-powered feeder container ships within a strict timeline, a move that could significantly enhance India’s reputation in the shipbuilding industry. Chairman and Managing Director Jose V J emphasized the importance of timely delivery and quality, especially when working with such a prominent client.
Commitment to Timely Delivery and Quality
In a recent interview, Jose V J highlighted the critical nature of meeting deadlines and maintaining high standards in shipbuilding. “Delivering the ships on time and as per quality are very important things,” he stated. The first vessel is expected to be completed within 36 months of the contract signing, with subsequent deliveries scheduled at two ships per year. This ambitious timeline reflects the shipyard’s commitment to excellence, especially given the scrutiny from CMA CGM, one of the world’s leading container lines.
The order includes six ships, each capable of carrying approximately 1,700 twenty-foot equivalent units. Jose noted that successful completion of this contract could lead to further opportunities with CMA CGM for larger vessels, contingent on the shipyard’s performance. He acknowledged Prime Minister Narendra Modi’s influence in securing this deal, as CMA CGM initially preferred a South Korean shipbuilder for the project.
Cochin Shipyard has partnered with HD Korea Shipbuilding & Offshore Engineering Co Ltd (HDKSOE) for this project. The main equipment for the ships will be sourced from South Korea, with designs provided by KOMAC. The engines will be manufactured under a license agreement with Everllence, ensuring that while the ships are built in India, they benefit from advanced South Korean technology and expertise.
Financial Support and Future Prospects
The financial framework for this project is bolstered by government support. Cochin Shipyard will receive an average subsidy of 23.1% per ship under the Shipbuilding Financial Assistance Scheme. This includes 15% on the first ₹100 crore and 25% on the remaining value of each vessel. Jose explained that this financial aid is crucial for the shipyard’s competitiveness in the global market.
Construction will officially commence with steel cutting, which is scheduled to begin next year. This delay is primarily due to the lead time required for engine delivery. Jose’s recent visit to South Korea was aimed at finalizing construction details with HDKSOE, reinforcing the collaborative effort behind this significant order.
The contract signing, which took place in New Delhi, marked a notable moment in the industry. Jose recounted that CMA CGM’s Group Chairman, Rodolphe Saade, personally signed the contract, a rarity that signals strong confidence in India’s shipbuilding capabilities. This event has the potential to reshape perceptions of India as a viable alternative in the global shipping landscape.
