Cochin Shipyard Secures $360 Million Vessel Order

Cochin Shipyard Ltd has made headlines by securing a significant $360 million contract from CMA CGM S A, marking India’s first order for container vessels. The state-run shipbuilder aims to deliver six LNG-powered feeder ships within a strict timeline, showcasing India’s growing capabilities in the shipbuilding sector. Chairman and Managing Director Jose V J emphasized the importance of timely delivery and quality as the company embarks on this ambitious project.

Strategic Partnership and Project Timeline

Cochin Shipyard’s recent contract with CMA CGM involves the construction of six LNG-powered feeder container ships, each capable of carrying approximately 1,700 twenty-foot equivalent units (TEUs). The first vessel is expected to be delivered within 36 months of the contract signing, with subsequent ships following at a rate of two per year. Jose V J, who recently took on the role of CMD, highlighted the critical nature of adhering to this timeline, especially when working with a major client like CMA CGM, one of the world’s leading container shipping companies.

To enhance the project’s success, Cochin Shipyard has partnered with South Korea’s HD Korea Shipbuilding & Offshore Engineering Co Ltd (HDKSOE). This collaboration will ensure that the ships are built using South Korean designs and equipment, with key components supplied by Hyundai. Jose noted that the engines will be manufactured in South Korea under a licensing agreement with Everllence, further solidifying the international cooperation involved in this project. The initial order was for four firm ships and two optional ones, but Cochin Shipyard successfully negotiated a firm order for all six vessels, each priced at $60 million.

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Government Support and Future Prospects

Cochin Shipyard will benefit from substantial government support under the Shipbuilding Financial Assistance Scheme, receiving an average subsidy of 23.1% for each ship. This financial backing is crucial as the company prepares to cut steel for the vessels, a process that will commence in about a year due to the lead time required for engine delivery. Jose expressed optimism about the future, stating that successful execution of this contract could lead to further orders from CMA CGM for larger vessels.

The significance of this contract extends beyond the immediate financial implications. It signals a shift in the global shipping industry, with CMA CGM’s Group Chairman personally signing the contract in India—a rare occurrence that underscores the potential of Indian shipyards in the international market. Jose emphasized the need for local shipyards to capitalize on the ₹69,725 crore package approved by the Union Cabinet to revitalize the shipbuilding sector. He urged the industry to leverage this support to enhance its global standing and competitiveness.